...Study of Economics - Micro & Macro Economics The study of economics is divided by the modern economists into two parts viz. Micro economics and Macro economics. This division is shown in the figure / chart above. Micro economics and Macro economics, both the terms were used in 1933 by Prof. Ragnar Frisch from Oslo University of Norway. The word micro has been derived from the Greek word `Mikros' i.e. small and the word macro has been derived from Greek word `Makros' i.e. large. What is Microeconomics ? Meaning & Definition Micro means small. Thus, micro economics analyses individualistic behaviour. It studies an individual consumer, producer, price of a particular commodity, household, etc. According to Prof. K. E. Boulding, "Micro Economics is the study of particular firm, particular household, individual prices, wages, incomes, individual industries and particular commodities." Subject Matter or Scope of Microeconomics Micro Economics is concerned with the following topics :- 1. Commodity Pricing: Prices of individual commodities are determined by market forces of demand and supply. So micro economics makes demand analysis (individual consumer behaviour) and supply analysis (individual producer behaviour). 2. Factor Pricing: Land, labour, capital and entrepreneur, all factors contribute in production process. So they get rewards in the form of rent, wages, interest and profit respectively. Micro economics deals with determination of such rewards i.e. factor...
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...December, 2009 Appraisal of Capital Market Efficiency on Economic Growth in Nigeria Sunday O. E. Ewah, Atim E. Esang & Jude U. Bassey Faculty of Management Sciences, Cross River University of Technology Ogoja Campus, Nigeria Tel: 80-5901-4300 Abstract E-mail: soniewah@yahoo.com The paper is an appraisal of the impact of capital market efficiency on economic growth in Nigeria, using time series data on market capitalization, money supply, interest rate, total market transaction and government development stock that ranges between 1961 to 2004. The model specification for the analysis of data is multiple regression and ordinary lest squares estimation techniques. The result of the study shows that the capital market in Nigeria has the potentials of growth inducing, but it has not contributed meaningfully to the economic growth of Nigeria. This is as a result of low market capitalization, low absorptive capitalization, illiquidity, misappropriation of funds among others. The empirical test indicates that, these variables satisfied the economic apriori and are statistically significant except total transactions and money. Thus it was concluded and recommended that, the capital market remain one of the mainstream in every economy that has the power to influence economic growth, hence the organize private sector is encourage to invest in it. This will enable the capital market improve its illiquidity status for economic growth and development. Therefore the government must contribute...
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...these nations are often experiencing an expansion role in both the world’s economy and the political frontier. According to various authors, the concept of cash inflows refers to the money that an organization receives as a result of the operating activities, the financial activities, and the investment activities (Hoque, 2005). On the other hand, cash outflows refer to the total outgoing funds from a company in a particular period. It also includes expenses such as salaries, maintenance, supplies, servicing debts, and the payments of dividends. Regarding the aspects of the topic, there is a need to create an analysis of the interpretations of the markets with regards to the inflow and outflow of income. The developments of a capital market in a nation will offer a significant influence on the amount of money that is received in the market as compared to the expenses that the relevant institutions are to incur. It is, however, important to write about this topic since it offers an interpretation on how a nation can improve on their economies as compared to other countries. The paper will, however, provide information on the factors that suggest a significant increase in the income received from various businesses and the reasons that lead to the continuous increment of money leaving a particular market. It will, however, offer suggestions that an institution can apply so as...
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...Monetary Policy in Nigeria The Impact of Monetary policy on Nigeria’s Economic Growth. Monetary Policy in Nigeria - Developing countries growth policies are better delivered as full packages since fiscal and monetary policies are inextricable, except in terms of the instruments and implementing authorities. However, monetary policy appears more potent in correcting short term macroeconomic maladjustments because of the frequency in applying and altering the policy tools, relative ease of its decision process and the sheer nature of the sector which propagates its effect to the real economy – the financial system. The main objective of monetary policy in Nigeria is to ensure price and monetary stability. This is mainly achieved by causing savers to avail investors of surplus funds for investment through appropriate interest rate structures; stemming wide fluctuations in the exchange rate of the naira: proper supervision of banks and related institutions to ensure financial sector soundness; maintenance efficient payments system; applying deliberate polices to expand the scope of the financial system so that interior economics, which a re largely informal, are financially included. Financial inclusion is Particularly important in the sense that the larger it is, the larger the interest rate sensitivity of production and aggregate demand and so the more effective monetary policy is. The economy of Nigeria is faced with unemployment low investment and high inflation rate...
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...literature review discusses objectives of financial development and economic growth as well as existing relationship of this concept. Financial development is strongly connected with economic situation, but we do not know for sure if this always implies economic growth. There are many factors which influence relationship between financial development and economic growth and its effects such as financial liberalization, government ownership of the banks, monetary policy and rate of inflation, institutional and regulatory framework of financial markets in particular countries. Many researchers are trying to give the right questions and explanations on this field but still there are unresolved issues and implications which give open space for future investigations. Table of Contents 1. Introduction………………………………………………………….2 2. Literature Review……………………………………………………2 2.1. Relationship between Financial Development and Economic Growth………2 2.2. Empirical methodologies……………………………………………………..5 2.3. Effects of Merger and Acquisitions in Bank Industry on relationship between financial development and economic growth…………………………………7 3. Conclusion…………………………………………………………....8 4. Reference List………………………………………………………..9 1. Introduction Financial system is a basis of current economic trends and there is no possibility of doing businesses...
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...Thomas Gentry Thomas Money Service Inc. and FGI Finance Business Proposal Economics/561 Instructor William Kutza May 27, 2013 Business Proposal for Thomas Money Service Inc. The proposal recommendations to analyze the situation at Thomas Money Services Inc. and FGI Finance attributes and introduction a plan to improve existing goods and services. The recommendation suggests applications for increasing revenue, maximizing profits, achieving ideal production levels, determining fixed and variable costs, and identifying methods to reduce the costs. The business proposal will establish that it is in the best interest for both clients and consumers. The current economy has been declining which has driven Thomas Money Service Inc. to find other methods to stabilize their profits, reduce loss, and help to gain or maintain market share. Thomas Money Service Inc. has been hit by the slow economy and the decease in the homebuilding market. The business proposal model will help Thomas Money Services Inc. to put in place applications to increase revenue, profit maximization quantities and to establish a mix of pricing and non-price strategies with low marginal cost and revenue theories. These applications will offset the negative impact of the decease in the homebuilding market. The business proposal presents methods to overcoming barriers to entry in to the market, how to increase product differentiation, how to input applications that will show potential cost savings...
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...Introduction: Globalisation can be considered as one of the most essential phenomenon of our times. Ardalan (2009) described globalisation as a compression of time and space with huge intensification of economic, cultural, social and political interconnections on the global scale. A New Geo-economy by Peter Dicken (2003) Dicken (2003) believes that ‘something’ is happening out there. More industries are orientated towards global markets nowadays in which the increasing of internationalisation and globalisation can be considered as one of the most important development in the world economy. As a result, global division of labor has evolved to a specialisation of labors in different parts of the production processes without being limited by geographical constraints anymore. It leads firms in the industrial countries focus to produce manufactured goods, meanwhile the non-industrialised countries are specialised to supply raw materials or agricultural products to them. This process is not as simple as the theory because the fragmentation of production processes and geographical relocation has been involved in the present trade flow, however. In addition, the emergence of a new international financial is inevitable as well since the development of technologies of transport and communications has accelerated the global transactions (Dicken, 2003). But, there is no consensus whether that ‘something’ is a new thing or not. Some believe that a new globalised world economy has risen...
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...financial development and economic growth nexus 1 1.3 Review of the empirical literature 4 1.3.1 Time series 5 1.3.2 Cross-country studies 6 1.3.3 Panel data studies 7 3 Conclusions 8 4 References 9 1 Introduction “Finance is powerful. The financial system can be an engine of economic prosperity – or a destructive cause of economic decline and misery.” Levine, R. (2011) p.85 Obviously, financial system and economy are related. But what is the nature of this relationship? The objective of this paper is to critically evaluate the existing theoretical and empirical literature on the finance-growth nexus. What is the role of the financial sector in economic growth? Does finance cause growth or simply follows it? There is no wide agreement about this task among recognised economists. Even Nobel Prize winners disagree in regard to the role of finance in economic development. Levine (2003) states that the role of finance as a major determinant of economic growth is over-stressed. Moreover Levine (2003) argued that where enterprise leads finance follows. Quite the opposite, important acknowledgment should be taken into account and it follows as “[the idea] that financial markets contribute to economic growth is a proposition too obvious for serious discussion.” Levine (2003) p.1 Similar to that, he also declared that the finance growth nexus cannot be safely ignored without substantially impeding our understanding of economic growth. ...
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...Block IV MACROECONOMICS – II UNIT 17 Inflation 1-14 UNIT 18 Banking and Money Supply 15-31 UNIT 19 International Trade and Balance of Payments 32-50 UNIT 20 Economic Indicators 51-62 UNIT 21 Business Cycles 63-71 UNIT 22 Economic Growth, Development and Planning 72-84 Economics for Managers Expert Committee Dr. J. Mahender Reddy Vice Chancellor IFHE (Deemed to be University) Hyderabad Prof. Y. K. Bhushan Vice Chancellor IU, Meghalaya Prof. Loveraj Takru Director, IBS Dehradun IU, Dehradun Course Preparation Team Prof. Ramalingam Meenakshisundaram IFHE (Deemed to be University) Hyderabad Ms. Pushpanjali Mikkilineni IFHE (Deemed to be University) Hyderabad Mr. Pijus Kanti Bhuin IU, Sikkim Ms. Preetaq Dutta Rai IU, Jharkhand Ranchi Prof. S S George Director, ICMR IFHE (Deemed to be University) Hyderabad Dr. O. P. Gupta Vice Chancellor IU, Nagaland Prof. D. S. Rao Director, IBS, Hyderabad IFHE (Deemed to be University) Hyderabad Ms. Hadiya Faheem IFHE (Deemed to be University) Hyderabad Mr. Mrinmoy Bhattacharjee IU, Mizoram Aizawal Prof. Tarak Nath Shah IU, Dehradun Mr. Manoj Kumar De IU, Tripura Agartala © The ICFAI University Press, All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying or otherwise – without prior permission in writing from The ICFAI University Press, Hyderabad. Ref. No. Eco Mgrs SLM – 09...
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...Conference on Islamic Economics and Finance Measurement of Financial Development: A Fresh Approach Noureen Adnan 1 Financial development can be defined as the policies, factors, and the institutions that lead to the efficient intermediation and effective financial markets. A strong financial system offers risk diversification and effective capital allocation. The greater the financial development, the higher would be the mobilization of savings and its allocation to high return projects. Financial development can be measured by a number of factors including the depth, size, access, and soundness of financial system. It can be measured by examining the performance and activities of the financial markets, banks, bond markets and financial institutions. It is observed that higher the degree of financial development in a country, the wider will be the availability of financial services. A developed financial system offers higher returns with less risk. In this paper it is attempted to collect main components of financial development including Banks, Stock markets, insurance companies and bond markets for 41 economies during the period of 1988 to 2009. The method of principal component is utilized to extract a single financial development index out of them. Principal component analysis is a modern tool of data analysis. The main aim to apply principal component to achieve a meaningful index out of complex and multidimensional elements of financial development and to re-express the...
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...A Term Paper On “The Role of Capital Market on The Economic Development of Bangladesh” GOVT. SUHRAWARDY COLLEGE, PIROJPUR Department of Accounting Term Paper On “The Role of Capital Market on The Economic Development of Bangladesh” Submitted To: Md. Faruk Hosain Assistant Professor Department of Accounting Govt. Suhrawardy College, Pirojpur Submitted By: Alamgir Hossain Roll No- 9792874 Reg. No-1727384 Session-2010-2011 BBA (Hons) 4th Year Department of Accounting Govt. Suhrawardy College, Pirojpur Date of Submission: February 12, 2014 Letter of Transmittal Date : Md. Faruk Hosain Assistant Professor Govt. Suhrawardy College, Pirojpur Subject: Submission of Term Paper on “The role of capital market on the economic development of Bangladesh”. Sir, As a part of BBA program a term paper is enclosed herewith. The report was prepared on “The role of capital market on the economic development of Bangladesh.” In the course of preparation the report, I tried with the best of my capacity to accommodate as much information and relevant issues as possible and tried to follow the instructions as you have suggested. In the time of preparation the report, relevant documents, data, information were studied and practical knowledge had been gathered. I tried my best to make this report as much informative as possible. I sincerely believe that it will satisfy your requirements. I however sincerely believe that this report will serve the purpose of my term paper...
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...company’s operating situation. In other words business environment is the sum of living person, location and natural resources. In business environment internal factors include five M’s such as, man, material, money, machine and management. These internal factors change the function of business. External factor are those factors which are beyond the control of business enterprise. These external factors are government factors, legal factors, physical factors and demographical factors. External environment or factors are also two types, micro environment and macro environment. Micro environment consist of suppliers, customers, market intermediaries, competitors and public. Micro environment is also known as operating environment. Another external environment or factors macro environment consists of non-economic environment, political environment, technological environment and socio-cultural environment etc. Business environment has some typical characteristics. It is a constantly changing system. Both short term and long term impact works on business environment. One of the most important characteristics of business environment is uncertainty. Task1 1(a) Identify the purposes of different types of organization There are many different types of organization in our socio-economic life. One organization is different from another organization. They are mission, goal, objective all are different. Some organization purpose is to earn profit, some are non-profit, some are built for mankind...
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...Comparison of GDP per capita3 steps | 1. Calculate the GDP per capita ( GDP/population) 2. Convert to a common currency 3. Adjust for the differences in the purchasing power of the currency per country | Economic growth | Growth in production | Welfare/well-being | The sense of contentment or satisfaction people in a society have | Human Development Index (HDI) | A metric to determine the welfare of a population | 3 ways to measure production | 1. Production approach: Adding up the total added value of the goods and services of a country 2. Income approach: Adding up all the remuneration for the resource owners in that country 3. Expenditure approach: Adding up all the expenditure of the country | Gross National Income (GNI) | Total production + Total Income | Production factors of capital | 1. Durable capital goods (>1 year) 2. Floating capital goods (<1 year) 3. Consumables (Added during the processes) | Production factors of labor | 1. The size of population 2. Participation rate | Causes of rises in wage costs | 1. Scarcity of labor market 2. Increased labor productivity 3. Increased consumer price index 4. Increase in social security and contribution policy 5. Increase in average age structure of the labor market | 6 sectors in an economy’s structure | 1. Agriculture 2. Manufacturing 3. Construction 4. Trade, transport and communication 5. Financial services,...
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...Economics task: Globalisation STUDENT NUMBER=20257806 WORD COUNT (including footnotes) =1,705 Globalisation is the process integrating economies into an international economy through an increase in trade, investment, technology, finance and labour. Globalisation has impacted greatly on the economy of India which is the 7th largest economy in the world and the 2nd most populus. India recently opened it’s economy in the last decade from a closed market in 1991.Globalisation has certain impacts on the economy which include economic convergence, economic growth & development, quality of life, distribution of income and wealth. There have been strategies put in place to promote economic growth and development which include. International Convergence International convergence is the tendency of economies becoming more similar in the ways they operate, their consumption patterns, structure of output, economic performance and government systems. The impact of this is an increase in trade dependency with economies formed open and deregulated markets as well as an increase in trade. A positive impact from increased trade is greater efficiency in resource allocation for NIE such as India. Indian exports have grown more than 25% per year to over $100 billion in 2006. (1)It has also led to an increase in level of output as GDP growth for India in 2007 was 9%. (2). As Indian companies began trading on the world market they were forced to become more efficient...
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...financial development and economic development Financial intermediaries perform an important role in the development process, particularly through their role in allocating resources to their most productive uses. More efficient financial markets help economic agents hedge, trade, pool risk, raising investment and economic growth. Financial institutions provide consumers and commercial clients with a wide range of services and different types of banking products. The importance of financial institutions to the wider economy is apparent during market booms and recessions. During economic upturns, financial institutions provide the financing that drives economic growth, and during recessions, banks curtail lending. This can exacerbate a country's financial problems and draw attention to the fact that economies are heavily reliant upon the financial sector. The importance of financial institutions and passed legislation made it easier for more people to obtain products and services from these entities. In many countries, banks are encouraged or even compelled to lend money to home buyers and small businesses. Readily available loans encourage consumer spending, and this spending leads to economic growth. There is now a clear realization that sustainable development will not and cannot be achieved by governments acting alone. In this context, the expertise of the private sector plays an important role. Role of Financial Institutions in the financial development and economic development...
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