SS 2 Economics (1st, 2nd & 3rd Term)

The theory of the multiplier– states that an increase in consumer or business investment spending in a country would produce a multiplier effect by raising the level of national income.  The multiplier effect can be as a result of changes in consumption expenditure, which is known as consumption multiplier or investment changes, which is known […]

CIRCULAR FLOW OF INCOME Circular flow of income shows the independence or relationship between households and business enterprise. Commodity and money flows between households and firms. It shows the flow of payments from business sector to households in exchange for labour and other productive services and the return flow of payments from households to business

As individuals and firms keep account of their economic activities such as their annual report which shows all their activities during the past year, countries too like individuals and firms do record and keep their economic activities.   National Income– is defined as the monetary value of the total volume of goods and services produced

Capital Market- is a market for medium and long-term loans. The capital market serves the needs of industries and the commercial sectors. It comprises all institutions which are concerned with either the supply of or demand for long-term loans. The capital market provides a system by which money for investment is distributed to institutions which

A budget may be defined as a financial statement of the total estimated revenue and the proposed expenditure of a government in a given period, usually a year. FUNCTION / USES / IMPORTANCE OF BUDGETS National budget is used to achieve the following objectives It is used as a means of raising revenue It is

Taxation– is defined as the act of imposing a compulsory levy by the government on the income of individuals, firms, and goods and services. That is, it is a compulsory payment made by each eligible citizen towards the expenditure of the country. It is a compulsory contribution imposed by a government authority on goods, individuals,

Public finance– is defined as an aspect of economics which deals with the financial activities as relate to Income, Expenditure and the National Debts operations, with their overall effects on the economy. That is, it is the management and control of government income and expenditure to achieve government’s policy objectives.  It involves a detailed analysis

Inflation This is a persistent rise in the general level of price of goods and services.  Inflation occurs when there is an increase in money supply without corresponding increase in volume of production.   TYPES OF INFLATION Demand – Pull Inflation Cost – Push Inflation Hyper-Inflation Creeping Inflation   Demand – Pull Inflation – This

MONEY MARKET Money market is a market where short term securities are traded in.  The market comprises of institutions or individuals who either have money to lend or wish to borrow on a short-term basis.   INSTRUMENTS USED IN THE MONEY MARKET Treasury Bills Treasury Certificate Bill of exchange Call money funds Treasury Bill –

DEMAND FOR MONEY Demand For Money: is the total amount of money which an individual, for various reasons, wish to hold. That is, it is the desire to hold money in terms of keeping one’s resources in liquid form rather than spending it. The demand for money in economics is known as Liquidity Preference. MOTIVES

Localisation of  industries refers to the concentration of many firms of an industry in a particular area. Advantages And Disadvantages Of Localisation Localisation has both merits and limits. They are enumerated below. Advantages Reputation – The place where an industry is localised gains reputation and so do the products produced there. As a consequent, articles

Location of industry refers to the siting of an industry in a particular place.                       Factors Influencing Industrial Location Generally, the location of industries is influenced by economic considerations though certain non-economic considerations also might influence the location of some industries. Maximization of profit which

Meaning Industry An industry consists of a group of firms producing broadly similar commodities. Examples are the shoe industry, the transport industry, the cement industry, etc. The production side of business activity is referred to as industry. It is a business activity, which is related to the raising, producing, processing or manufacturing of products. The

In a physical sense, a market means a fixed place where people meet to buy and sell goods; that is, a market place. In economics, a market can be defined as any arrangement, system or organization whereby buyers and sellers of goods are services are brought into contact with one another for the purpose of

Supply of labour may be defined as the total number of people of working age offered for employment at a particular time and at a given wage rate. This supply of labour also relates to the quantity of labour.                            FACTORS AFFECTING SUPPLY OF LABOUR The size of population and population growth The age structure

Labour market is defined as a market which workers and employers are brought into contact and conditions of work are decided.  It is made up of people who are looking for job, employers and government. THE CONCEPT OF LABOUR FORCE Labour force can be defined as the total number of people of working age in

Revenue refers to the income derived by a producer or firm from business activities or from the sale of his or its products.                                           TYPES OF REVENUE TOTA REVENUE (TR): This refers to the total

MEANING OF COST OF PRODUCTION Cost of production can be defined as the sum of total of all the payment to the factors of production used in production of goods and services. For goods and services to be produced, all the four factors of production, which are land, capital, labour and entrepreneur, must work together.

A production possibility curve (PPC) is a graphical or diagrammatic illustration of all possible bundles or combinations of two types of goods which a society can produce using its present level of resources and given the existing level of technology. The idea behind the production possibility curve is that in order to produce a particular