Fundamentals of Economics, Microeconomics and Macroeconomics and Types of Economies: Caiib Paper 1 (Module A), Unit 1

Fundamentals of Economics, Microeconomics and Macroeconomics and Types of Economies: Caiib Paper 1 (Module A), Unit 1

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We all know that CAIIB exams are conducted by the Indian Institute of Banking and Finance (IIBF).  CAIIB is said to be one of the difficult courses to be cleared for the bankers. But we assure you that with the help of our “CAIIB study material”, you will definitely clear the CAIIB exam.
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So, here we are providing “Unit 1: Fundamentals of Economics, Microeconomics and Macroeconomics and Types of Economies” of “Module A: Economic Analysis” from “Paper 1: Advanced Bank Management (ABM)”.

The Article is Caiib Economic Analysi Unit 1: Fundamentals of Economics, Microeconomics and Macroeconomics and Types of Economies

Economics

Economics deal with thee production, allocation and use of goods and services.

Adam Smith’s (Father of Modern Economics)

  • An Enquiry into the Nature and causes of the wealth of Nations (in 1776).
  • Define Economics as “study of wealth” also known as Wealth Definition.

Marshall’s Definition: (Known as Welfare Definition)

  • By Prof. Alfred Marshall.
  • “Economics is study of mankind in the ordinary business life.”
  • More important given to Study of Man.

Robbins Definition: (Known as Scarcity Definition)

  •  “Economics is the science which studies human behaviour as a relationship between end and scarce means which have alternative uses.”
  • By Lionel Robbins.
  • Economics= Study of means and ends.

Analysis of Definition :

  1. Man has unlimited wants.
  2. The means to satisfy human wants are limited.
  3. Resources are not only limited but have alternative use.
  4. Man has to make choice.

Microeconomics Vs Macroeconomics

Microeconomics Macroeconomics
Concerned with the behaviours of Individual entities such as Markets, Firm and Households. Concerned with the overall Performance of the Economy.
It studies “how households and firms make decision to allocate limited resources, typically in markets where goods or services are being bought and sold. It study aggregated indication such as GDP, Unemployment rates and price indices  to understand  “how the whole economy function.”
Microeconomics analyses the market behaviour of individual consumers and firms in an attempt to understand the decision making process of firms and household. It deals with performance, Structure and behaviour of national or regional economy as whole.

 

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