National Income can be calculated from three different Aspects:

• As the sum total of value added by all producing units in the economy.
• As the sum total of factor incomes generated in the economy during the period of a financial year.
• As the sum total of expenditure on the final goods and services produced in an economy in a financial year.

Read More

MONEY

Money is something i.e., commonly accepted as medium of exchange.

BARTER SYSTEM

Before the evolution of money, goods were exchange for goods. This system of exchange was known as barter system. Barter economy is termed as C-C economy, i.e. commodities were exchanged for commodities. Economic exchanges without the mediation of money are referred to as barter exchanges.

Read More

BANK AND BANKING

Bank is an institution which receives funds from the public and gives loans and advances to those who need them. The supply of money in a country depends on the banking system as a whole and the monetary policy of the Central Bank in general.

Read More

Aggregate Demand (AD)

Aggregate Demand is the value of total expenditure on all goods and service in an economy during a fiscal year. Aggregate demand of the economy depends upon the level of employment. There is direct or positive relationship between the level of employment or output in the economy and the aggregate demand. It signifies that aggregate expenditure will increase with rise in the level of employment and fall with the decline in the level of employment. Aggregate demand is the summation of consumption and investment. Read More