MODULE B: ECONOMIC CONCEPTS RELATED TO BANKING | Fundamentals of Economics, Microeconomics, Macroeconomics, Types of Economies, and Supply & Demand
MODULE B: ECONOMIC CONCEPTS RELATED TO BANKING Fundamentals of Economics – An Introduction Economics is the study of how individuals, businesses, and governments allocate scarce resources to satisfy unlimited wants. The two major branches of economics are Microeconomics and Macroeconomics . Microeconomics This branch studies individual units such as consumers, firms, and markets. It examines how decisions are made regarding the allocation of limited resources. Example: How the price of apples affects the quantity demanded by consumers. Macroeconomics It focuses on the economy as a whole and studies aggregate indicators like GDP, inflation, unemployment, etc. Example: Analyzing how a decrease in interest rates impacts national income and employment. Types of Economies Market Economy: Economic decisions are made by individuals and businesses based on supply and demand. Command Economy: The government makes all economic decisions and ...