| Macroeconomics | Microeconomics |
|---|---|
| Focused on the actions of individuals/businesses. | Focused with the action of individuals/business. |
| GDP, National Income, Inflation | Individual firm |
| Father: JM Keynes(England), Wrote “General Theory of Employment” | Father: Adam Smith (Founding father of Modern Economics), Wrote “The Wealth of Nations” |
Organization of Economic Activities
- Centrally Planned
- Done by Government
- Market
- Free interaction of individuals
Classification
3 types of Economic System
| # | 1. Capitalist | 2. Socialist | 3. Mixed |
|---|---|---|---|
| Ownership | Private Ownership | Public Ownership | Public + Private |
| Economic Motive | Profit | Social Welfare | Both |
| Government Role | No Role | Complete Involvement | Limited Role |
| Income Distribution | Unequal | Equal | Less unequal |
| Economic Freedom | Complete | Lack if freedom | Limite Freedom |
| Example | USA | USSR, North Korea | Lack of freedom |
1991: Licence Raj
- Balance of payment
- LPG: Liberalization, Privatization, and Globalization
Difference between Public Goods and Private Goods
| Private Goods | Public Goods |
|---|---|
| Rivalrous – Provide Satisfaction to only one person | Non-Rivalrous – Provide satisfaction to all |
| Excludable – A person can exclude someone from sitting in the car | Non-Excludable – Any person can use the public bridge |
| Generally provided by the Private Sector – Made by a private company | Generally provided by government – Public provisions made by government |
| It has positive marginal costs | It has zero marginal costs |
Difference between Organized & Unorganized Sector
| Feature | Organized | Unorganized |
|---|---|---|
| Registration | Registered with the government | Largely unregistered |
| Regulation | Subject to government laws and regulations | Limited or no government regulation |
| Employment | Formal employment contracts | Informal employment, often without contracts |
| Job Security | High job security | Low or no job security |
| Wages | Regular and fixed wages/salaries | Irregular and variable wages, often low |
| Working Hours | Fixed working hours | Irregular and often long working hours |
| Employee Benefits | Includes benefits like provident fund, medical insurance, paid leave | Limited or no employee benefits |
| Work Environment | Relatively safe and regulated work environment | Often unsafe and unregulated work environment |
| Examples | Government jobs, large corporations, banks, registered factories | Street vendors, agricultural laborers, construction workers, domestic workers, small artisans |
| Legal protections | workers have legal protections | workers lack legal protections Export to Sheets |
Sector of Economy
Primary Sector
- Directly dependent on the Environment
- In India, the Primary Sector is seen mostly in agriculture activities.
- Eg: Agriculture, Fishing, Hunting, Forestry, Mining
- It is known as a Red Color Job.
- This sector employs the no. of people, with the least contribution to GDP (14.39%)
Secondary Sector
- They also called the manufacturing sector.
- These add value to natural resources by transforming raw materials into valuable products.
- Eg: Manufacturing, Processing, Building/Construction Work, Electricity
- It is called “Backbone of a country”, helps in the industrialization of a country, e.g., China
- It is known as a Blue Collar Job, and it was not developed in India properly. We have leaped to the tertiary sector directly.
- Highest Contribution in our economy and contribute 31.46% in GDP.
Tertiary Sector
- Also known as service sector
- It is that part of the economy where businesses produce services.
- E.g., teaching, Transport, Advertising, Retail
- It is always intangible.
- Also known as a White Collar Job
- Least no. of people employed in this sector and contribute 54.15% in GDP.
Quaternary Sector
- This is often seen as a subset of the tertiary sector, focusing on knowledge-based services.
- E.g., Information Sector, R&D.
Quinary Sector
- This represents the highest level of service activities, involving top-level decision-making. It’s where you find those who formulate policy and make strategic decisions.
- E.g., Government/Corporate/Scientific/University Leadership.
- Also known as Gold Collar Job
Some related terms
Pink Collar Job
- Pink-collar jobs are typically service-oriented and often involve caregiving, clerical work, or other roles historically considered “women’s work.”
- E.g., Nursing, Childcare, Beauty industry jobs, Teaching (especially early childhood and primary education).
Real Sector
- The real sector of an economy encompasses activities related to the production of tangible goods and services
- It centers on the actual output of an economy, meaning the creation of physical products and the delivery of services.
- Production: This includes industries like agriculture, manufacturing, and construction.
- Services: This refers to the provision of services such as healthcare, education, and transportation.
- Consumption: Household consumption of goods and services is also considered part of the real sector.
Financial Sector
- The financial sector of an economy is the network of institutions and markets that facilitate the flow of funds between savers and borrowers.
- It channels money from those who have it (savers) to those who need it (borrowers) for investment and consumption.
- It manages the creation, exchange, and management of financial assets.
- Financial Institutions: Banks (commercial, investment, and central), Insurance companies, Pension funds, Mutual funds, Credit unions
- Financial Markets: Stock markets, Bond markets, Money markets, Foreign exchange markets
- Financial Instruments: Stocks, Bonds, Loans, Derivatives
Sunrise Industry
- Sunrise industries are characterized by high growth rates and significant potential for future expansion. They often involve new technologies, products, or services. These industries typically attract substantial investment, including venture capital. They are expected to play a significant role in the future economy.
- Eg:
- Renewable Energy: Solar, wind, and other clean energy technologies.
- Electric Vehicles (EVs): The rapidly expanding EV market and related infrastructure.
- Artificial Intelligence (AI): AI and machine learning applications across various sectors.
- Biotechnology: Advancements in genetic engineering, pharmaceuticals, and healthcare.
- Semiconductor Industry: The production of microchips that are essential to most modern electronics.
2011 Census Report
| # | Primary | Secondary | Tertiary |
|---|---|---|---|
| LFPR | 54.6% | 24.3% | 21.1% |
| Contribution | 14.39% | 31.46% | 54.15% |
EXTRA INFORMATION
- What is the percentage of women working in the primary sector of India as of 2011-2012? ~ 62.8%