Meaning of Economy {Indian Economy} Part2nd

PART 1st Meaning of Economy {Indian Economy}  

Retail sales

Reported by the department of commerce during the middle of each month the retail sale report is very closely watched and measure the total receipts or dollar value of all merchandise sold in store. the report estimates the total merchandise sold by taking simple data from retailers across the country- a figure that serves as a proxy of consumer spending levels because consumers spending represents more then two thirds of GDP this report is very useful to gauge the economy's general direction also because the report's data in based on the previous month sales it is a timely indicator . The content in the retail sale report can cause above normal volatility in the market of information in the report can also be used to gauge inflationary pressures that affect Fed rates

Industrial Production 

The industrial production report released monthly by the federal reserve report on the changes in the production of factory mines, and utilities in the U.S one of the closely watched measures included in this report is the capacity utilization at high level typically capacity utilization in the range of 82-85% in considered tight and can increase the likelihood of price increase or supply shortage in the near term levels below 80% are usually interpreted as showing "slack" in the economy which might increase the likelihood of a recession. 

Employment Data

The bureau of labor statistics (BLS) releases employment data in a report called the non-farm payrolls on the first Friday of each month. generally sharp increases in employment indicate prosperous economy growth likewise potential contractions may be imminent if significant decreases occur. While these are general trends it is important to consider the current position of the economy. For example strong employment data could cause a currency to appreciate if the country has recently been thought economic troubles because the growth could be a sing of economy health an recovery conversely in a overheated economy high employment can also lead to inflation which in this situation could move the currency downward.

Costumer Price Index (CPI)

The costumer price index (CPI) also issued by the BLS measure the level of retail price change (the costs that consumer pay) and is the benchmark for measuring inflation using a basket that is representative of the goods and services in the economy in the CPI compare the price change month after month and year after year. this report is one of the more important economic indicators available its release can increase volatility in equity fixed income and forex markets. greater then expected price increases are considered a sing of inflation which will likely case the underlying currency to depreciate.

Type of Economic Systems 

Economics system are defined either by the way that stuff is produced or by how that stuff is allocated to people for example is primitive agrarian societies people tend to self produce all of the household or tribe. Family member would build their own dwelling grow their own crops hunt their own game fashion their own clothes, bake their own bread etc. This self  sufficient economic system is defined by very little division of labor and is also based on reciprocal exchange with other family or tribe member. In such a primitive society, the concept of  private property didn't typically exist as the need of the community were produced by all for the sake of all.

Later, as civilization developed, economies based on production by social class emerged such as feudalism and slavery. Slavery involved production by enslaved individuals who locked personal freedom or right and existed as the property of their  owner. Feudalism was a system were a class of nobility, known as lords, owned all of the lands and leased out small parcels to peasants to farm with peasants handing over much of their production to the lord offered the peasants relative safety and security including a place to live the food to eat.

Capitalism

capitalism emerged with the advent of industrialization capitalism is defined as a system of production whereby business owners (capitalist) produce goods for sale in order to make a profit and not for personal consumption in capitalism, capitalist own the business including the tools using for production as will as finished product. Worker are hired in return for wages, and the worker owns neither the tools in use in the production process for the finished product when its complete if you work at shoe factory 🏭and you take home a pair of shoes at the and of the day that's stealing even thought you made them with you own hands. This is because capitalist rely on the concept of private property to distinguish who legally owns what.

capitalist Production relies on the market for the allocation and distribution of the goods that are produce for sale. A market is venue that brings together buyers and seller and where price are established that determine who gets what and how much of if the united states and much of the development world today can be described as capitalist market economies. 

  

Meaning of Economy {Indian Economy}

 

The economies involve all production and consumption-related activities as will as the trade of goods and services in a country. an economy is often synonym of the economy system therefore its includes the distribution of resources to the factor of production as will the labor and capital required for the production factor to produce an output.

also based on the openness of an economy it is classified as an open economy or a planned economy were the government has a entire control of the factors of production and how they will be allocated like for example in the ex -communist countries.

Economics is a social science concerned with the production distribution  and consumption of goods and services it studies how individual business government and nations make choice on allocating resources to satisfy their wants and need trying to determine how these groups should organize and coordinate efforts to achieve maximum output.

Economics can generally be broken down into macroeconomics which concentrates on the aggregate economy and microeconomics which focuses on individual consumers and business .

There are also schools or economics thought two the most common are monetarists have generally favorable views on free markets as the best way to allocate  resources and argue that stable monetary policy is best course for managing the economy in contrast the Keynesian approach believes that markets  often don't work well at allocating resources on their own favors fiscal policy by an activity government in order to manage irrational market swings at recessions.

economic analysis often progress through deductive process including mathematical logic where the   implementation of specific human activity are considered in a means ends framework some branches of economic thought emphasize empiricism rather then formal  logic where the implications of specific human activity are considered in a means ends framework some branches of economic thought emphasize empiricism rather than formal logic specifically for macroeconomics which attempt to use the procedural observations and falsifiable tests associated with the natural science

science true experiment cannot created in economics empirical .economists rely on simplifying assumptions and retroactive `data analysis however some economists argue economics is not well suited to empirical testing and such methods often generate incorrect or inconsistent answers. 

TYPE OF ECONOMICS

Microeconomics     focuses on how individual costumer and firm make decisions these individuals can be single person a house hold a business organization or a government agency analyzing certain aspect of human behavior microeconomics tries to explain they respond to change in price and why they demand what they do at particular price levels microeconomics tries to explain how and why difference goods are valued differently how individual make financial decisions and how how individual best trade individual coordinate and cooperate with one another microeconomics topics ranges from the dynamic of supply and demand to the efficiency and costs associated with producing goods and services they also include how labor is divided and allocated uncertainty risk and strategic game theory.

Macroeconomics studies an overall economy on both a national and international level its focus can include a distinct geographical region a country a continent or even the whole world topics studied includes foreign trade government fiscal and monetary policy unemployment rats the level of inflation of interest rates a growths a total production output as reflected by changes in the growth domestic product (G.D.P) and business cycles that result in extension booms recession and depression. 

Economic Indicators 

Economic indicators are report that detail a country economics performance in a specific area. these reports are usually published periodically by government agencies or private organization and they often have a consideration effect on stock fixed-income and forex markets when they are released. they can also be very useful for investors to judge how economic conditions will move markets and the guide investment decision.

Gross Domestic Product (GDP)

The gross domestic product (GDP) considered by many to be the broadest measure of a country's economic performance it represents the total market value of all finished goods and services produced in a country in a given year or another period (the bureau of economic analysis issues a regular report during the later part of each month). Many Investors  analyst and traders don't actually focus on he final annual GDP report but rather two report issued a few month before the advance GDP report and the preliminary report. This is because GDP figure is frequently considered a lagging indicator meaning it can confirm a trend but it can't predict a trend. In comparison to the stock market the GDP report is somewhat similar to be income statement public company report at year -end.