pak eco lecture
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Introduction to Pakistan Economy.TRANSCRIPT
04/10/23 RAZA LILANI . [email protected]
• Economics is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices.
04/10/23 RAZA LILANI . [email protected]
The subject has two parts: ■ Microeconomics ■ Macroeconomics
04/10/23 RAZA LILANI . [email protected]
• Microeconomics is the study of the choices that individuals and businesses make, the way these choices interact in markets, and the influence of governments.
Examples of microeconomic questions are: Why are people downloading more movies? How would a tax on e-commerce affect eBay?
• Macroeconomics is the study of the performance of the national economy and the global economy.
Examples of macroeconomic questions are: Why is the Pakistan unemployment rate so high? Can the State Bank of Pakistan can make our economy expand by cutting interest rates?
04/10/23 RAZA LILANI . [email protected]
Microeconomics:1. Theory of Individual/Market
Demand2. Theory of Production and Cost3. Theory of Markets and Price4. Theory of Profit.
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Macroeconomics:1.Theory of total output and employment.2.General Price level.3.Theory of Inflation4.Theory of trade cycles5.Economic Growth
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Measures of Economic Development
1. Increase in real GNP2. Increase in real per capita income3. Rise in overall wellbeing of the people.4. Basic Needs approach5. Human Development Index
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Economic Growth• An increase in the capacity of an economy to produce
goods and services, compared from one period of time to another.
• Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adjusted for inflation.
• For comparing one country's economic growth to another, GDP or GNP per capita should be used as these take into account population differences between countries.
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Economic Growth
• By Economic Growth we simply mean increase in per capita income or increase in GNP. In recent literature, the term economic growth refers to sustained increase in a country's output of goods and services, or more precisely product per capita. Output is generally measured in terms of GNP.
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Economic Development
It implies progressive changes in the socio-economic structure of a country. Viewed in this way economic development Involves a steady decline in agricultural shares in GNP and continuous increase in shares of industries, trade banking construction and services.
•Further whereas economic growth merely refers to rise in output; development implies change in technological and institutional organization of production as well as in distributive pattern of income.
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Economic Development
• In the words of Amartya Sen "Development requires the removal of major sources of unfreedom poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation neglect of public facilities as well as intolerance or over activity of repressive states."
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Production Possibility Curve
• Production possibilities is an analysis of the alternative combinations of two goods that an economy can produce with existing resources and technology in a given time period. This analysis is often represented by a convex curve.
04/10/23 RAZA LILANI . [email protected]
PPC and Economic Growth
• As a introductory model of the economy, the production possibilities curve is commonly used to illustrate basic economic concepts, including full employment, unemployment, opportunity cost, economic growth, and investment.
04/10/23 RAZA LILANI . [email protected]
PPC and Economic Growth
1. Opportunity Cost2. Full Employment3. Unemployment4. Investment5. Growth