8ASlC LCCnCMlC CCALS

1 Lconomlc arowLh produces more and beLLer aoods and servlces or slmplv develop a hlaher sLandard of llvlna ls an
lncrease ln Lhe ablllLv of Lhe economv Lo produce aoods and servlces
Lconomv LquaLe sLrlcLlv wlLh Lhe raLe of arowLh of Cross uomesLlc roducL (Cu) noL all lncrease ln Cu ls real Cu
because Lhe lncrease ln Cu mlahL be a resulL of lncrease of prlces and noL a resulL of an lncrease ln producLlon lL mavbe
an lncrease ln populaLlon

2 lull LmplovmenL provlde sulLable [obs for all clLlzens who are wllllna Lo work !obs avallable equals labor force
3 Lconomlc Lfflclencv when socleLv achleves Lhe maxlmum fulflllmenL of wanLs uslna avallable resources lL ls how Lo
use resources Lo produce aoods and servlces aL lLs leasL cosLlv wav
4 roducLlve efflclencv vs lull LmplovmenL 1he economv ls emplovlna all lL's avallable resources (lull LmplovmenL)
and lLs producLlon of aoods and servlces aL lLs lowesL (roducLlve Lfflclencv)
noLe ln as much as sLrucLural unemplovmenL where laborers who lack Lralnlna and skllls cannoL be avolded lull
emplovmenL cannoL be 100 or frlcLlonal unemplovmenL where laborers are seeklna hlaher pavlna [obs because Lhev
posses lnferlor skllls and Lralnlna hence full emplovmenL wlll noL be 100 SLlll Lhe slLuaLlon wlll also fall under full
emplovmenL
3 Lconomlc lreedom free enLerprlse economv auaranLee buslness consumers and workers have a hlah dearee of
freedom ln Lhelr economlc acLlvlLv
6 LqulLable dlsLrlbuLlon of lncome ensures LhaL no aroup of clLlzens would face poverLv whlle oLhers en[ov abundance
Lo narrow Lhe aap beLween Lhe rlch and Lhe poor bv provldlna work and lncome
7 Lconomlc SecurlLv rovldes for Lhose who are chronlcallv lll Lhe dlsabled lald off workers Lhe aaed and Lhose unable
Lo earn mlnlmal levels of lncome
a enslon plans unemplovmenL and separaLlon pav lnsurance plans and healLh beneflLs eLc
8 8alance of Lrade lmporLs and exporLs musL malnLaln an equlllbrlum level of lncome
9 lorelan exchanae raLes moneLarv sLablllLv of raLes beLween Lhe peso wlLh oLher forelan currencles
10 ConLrol and manaaemenL of moneLarv supplv and malnLalnlna purchaslna power of domesLlc currencv Avoldlna
lnflaLlonarv and deflaLlonarv condlLlons
WP? 1PL S1uu? Cl LCCnCMlCS lMC81An1

1 ls essenLlal for clLlzens Lo know Lhe currenL socloeconomlc problems such as unemplovmenL lnflaLlon economlc
arowLh LaxaLlon poverLv Lrade polluLlon heaLhcare educaLlon eLc
2 Pelp sLudenLs lmprove analvLlcal skllls whlch are lmporLanL ln Lhe work place
3 Pelp buslness ln maklna declslons and be famlllar ln Lhe operaLlon of buslness and economlc svsLem Lo enable Lhem Lo
make proflLs bv wav of effecLlvelv uLlllzlna Lhe scarce resourses
4 Pelp Lhe farmers allocaLe Lhe producLlve scarce resources Lo opLlmlze producLlon
3 Pelp consumers and workers make beLLer buvlna and emplovmenL of resources declslons Lo maxlmlze saLlsfacLlon
LCCnCMlC 1L8MS
1 MlcroLco branch of economlcs LhaL deals wlLh parLs of Lhe economv such as buslness and lndusLrv and behavlor of
small economlc unlLs such as consumer's lncome consumpLlon and savlnas
2 MacroLco 1he branch of economlcs LhaL deals wlLh Lhe sLudv of whole economv Concerns wlLh larae economlc
unlLs such as LoLal producLlon monev supplv lnflaLlon and balance of Lrade
3 Lconomlc pollcv courses of acLlon Laken bv Lhe aovernmenL or prlvaLe lnsLlLuLlons Lo manlpulaLe economlc acLlvlLv Lo
achleve economlc welfare economlc pollcv mavbe moneLarv flscal or Lrade
4 Lconomlc Analvsls Lhe process of dlrecLlna economlc relaLlonshlp bv examlnlna economlc behavlor and evenLs
relaLlonshlp of economlc varlables and draw concluslon from Lhe parLlcular Lo Lhe aeneral or vlce versa uslna loalc as a
Lool uslna sLaLlsLlcs quanLlLaLlvelv descrlbe economlc behavlor and serve as basls of hvpoLhesls Lheorv Lo serve as a basls
of pollcv formulaLlon
3 oslLlve Lconomv Lxplaln and predlcL economlc evenLs bv observaLlon Lo measure economlc behavlor uslna
hvpoLhesls
Lxample Lhe unemplovmenL ln Aslan counLrles ls hlaher Lhan ln uS lL deals whaL economv ls llke
6 normaLlve Lconomv lncorporaLe value [udamenL abouL whaL Lhe economv should be done Lo achleve a deslrable
aoal
Lxample Aslan counLrles ouahL Lo underLake pollcles Lo reduce unemplovmenL (course of acLlon Laken)

5CAkCI1 AND CnCICL
1 kesource are scarce numan wants are Un||m|ted
2 We can noL produce all LhaL we wanL Lherefore we are confronLed wlLh a problem of cholce We are compelled
Lo choose amona Lhe aoods and servlces of our prlorlLv llsL
3 CpporLunlLv cosL works ln scarclLv and cholce because our resources are versaLlle (can be used for dlfferenL Lvpes
of aoods and servlces)
4 We have Lo allocaLe Lhese resources Lo derlve Lhe besL beneflLs ouL of lL
3 CpporLunlLv cosL ls deflned as voloe of tbe best oltetootlve tbot ls fotoooe lo otJet to oet ot ptoJoce mote of tbe
commoJltv#
6 ln economlcs Lhere ls no such Lhlna as free LvervLhlna has a value and cosL

CLher Lco 1erms
1 uLSC8l1lvL LCC deals wlLh Lhe sLudv of Lhe behavlor of eco unlLs from Lhe pasL Lo Lhe presenL lL ls more of a
hlsLorlcal presenLaLlon of economlc acLlvlLv
2 lnuuC1lvL or LML8lAL a sLaLemenL of Lendencv based on Lhe number of obsetvoble Joto



CC81unl1? CCS1 ln ln1L8nA1lCnAL 18AuL
low of compototlve AJvootooe
A counLrv Lends Lo exporL Lhose producLs Lhe producLlon of whlch lL has Lhe areaLesL advanLaae or Lhe leasL
dlsadvanLaae and Lo lmporL Lhose producLs Lhe producLlon of whlch lL has Lhe areaLesL dlsadvanLaae or Lhe leasL
advanLaae


1PL LCCnCMlC S?S1LM
A aroup lf economlc and soclal lnsLlLuLlons reaarded as unlL 1hese lnsLlLuLlons are oraanlzaLlons whlch
deLermlnes on how and whlch resources are uLlllzed Lo saLlsfv human wanLs 1hev are lnLerrelaLed and lnLerdependenL
Some of Lhese lnsLlLuLlons lnclude banklna svsLem aarlculLure and naLural resources communlcaLlon svsLems elecLrlc
power plan LransporL svsLem consLrucLlon mlnlna educaLlonal svsLem
under free enLerprlse economv Lhev make declslons as Lo
1 WhaL Lo produce
2 Pow Lo produce
3 lor whom are Lhe produced
Can be descrlbed as Lhe collecLlon of lnsLlLuLlon laws acLlvlLles conLrolllna values and human moLlvaLlons LhaL
collecLlvelv provlde a framework for economlc declslonmaklna
cooomlc svstem closslfleJ as Lo Lheorv
1 I Cap|ta||sm based on the theory that on the who|e everyone w||| get better |f the |nd|v|dua| or
that the peop|e and not the government dec|de what to produce and are |eft free to produce |t
cbotoctetlstlcs
1 Absence of cenLral economlc plannlna board 1he aovernmenL does noL plan Lhe whole economlc acLlvlLv rlvaLe
persons and flrms lav down economlc plans 1he aovernmenL wlll enaaae ln economlc acLlvlLv when Lhe prlvaLe
can no lonaer underLake such acLlvlLv or lf pro[ecL lnvolves huae amounL lf monev caplLal
2 rlvaLe ownershlp of caplLal facLors of producLlon are prlvaLelv owned and Lhe conducL of producLlon ls carrled
ouL bv prlvaLe enLerprlses rlvaLe persons are free Lo acqulre purchase and dlsposed properLv
3 1here ls prlclna svsLem prlces of aoods and servlces are deLermlned bv Lhe lnLerplav of Lhe law of supplv and
demand
4 1here ls compeLlLlon one seller can ouLsell anoLher seller Cood effecL of compeLlLlon ls LhaL beLLer quallLv
producLs are sold ln Lhe markeL Lverv flrm wlll sLrlve Lo make Lhe producL of beLLer quallLv Lo remaln ln Lhe
markeL
3 roflL moLlve as an lncenLlve Lo produce aoods and servlces new meLhods wlll be used Lo lower cosL of
producLlon Lo aLLaln hlaher proflL
6 resence of essenLlal freedom cholce of buslness acLlvlLv eLc
1 CCMMunlSM Lheorv LhaL advocaLes ownershlp of all caplLal and consumer aoods
cnAkAc1kl51lc5
1 Cwnershlp of all facLors of producLlon
2 ulcLaLorshlp LhaL profess Lo rule ln Lhe lnLeresL of Lhe people
3 Cpposed Lo all klnds of rellalon because lL Lends Lo prevenL people from uslna vlolenL means Lo reslsL ln[usLlces
4 resence of economlc plannlna board LhaL decldes whaL Lo produce how Lo produce and Lo whom are Lhe
produce
3 CovernmenL decldes where Lo asslan a worker Lo do where hls skllls are flLLed
6 Lco plannlna board lav prlorlLv plans ln producLlon such as mlllLarv bullLuo caplLal formaLlon and consumer
aoods and nonessenLlal lLems and servlces

1 SCClALlSM advocaLes aovernmenL ownershlp of ma[or lnsLrumenLs of producLlons and Lhe abandonmenL of
proflL moLlve bv persons as an lncenLlve Lo produce aoods
cnAkAc1kl51lc5
1 CompeLlLlon amona lndusLrles and buslness shall be abollshed and subsLlLuLed bv producLlon for use
2 roducLlon for proflL subsLlLuLed for use as moLlve for producLlon
3 Ma[or lndusLrles shall be owned bv Lhe sLaLe such as 1ransporL svsLem communlcaLlon faclllLles
4 Ma[or buslness and lndusLrles mavbe owned bv prlvaLe persons

LCC S?S1LM CCMA8Lu
As Lo prlclna
CaplLallsm lL allows prlce flucLuaLlons ln response Lo markeL condlLlons bv wav of supplv and demand
Communlsm aovernmenL flxes Lhe prlces on Lhe basls of naLlonal lncome LaraeL
Soclallsm aovernmenL conLrols Lhe prlces of ma[or producLs and servlce lL allows markeL flucLuaLlons ln Lhe prlvaLe
buslness secLor As Lo Lhe role of aovernmenL
CaplLallsm lndlvldual earn renL waae lnLeresL and proflL buL aovernmenL collecL Laxes
Communlsm lndlvldual earn waaes buL all oLher lncome aeLs Lo Lhe aovernmenL
Soclallsm comblnaLlon of caplLallsm and communlsm

5oclollsts otoomeots ooolost copltollsm
1 rlvaLe ownershlp of caplLal resulLs ln areaL dlfference ln wealLh and lncome some verv rlch whlle oLhers are verv
poor
2 Wrona aoods and servlces are produced because of proflLmoLlve CaplLals are used Lo produce luxurles LhaL onlv
Lhe rlch can en[ov 8aLher Lhan produclna aoods for Lhe poor
3 CompeLlLlon resulLs Lo wasLaae ln Lhe use of resources 1here are so manv arocerv sLores and oLher buslnesses
LhaL are needed WasLeful producLlon prevenLs aarlculLural lands Lransformed lnLo houslna pro[ecLs Abuse ln Lhe
cuLLlna of Lrees resulLlna Lhe occurrence of flood desLrovlna foresL and crops and llves of people
4 WealLhv people deLermlne Lhe laws of Lhe land ln favor of Lhe rlch and dlscrlmlnaLe Lhe poor
3 CaplLallsm Lends Lo brlna war because of deslre for raw maLerlals
copltollst otoomeot ooolost soclollsm
1 rlvaLe ownershlp of wealLh s a worLhv lncenLlve for an efforL lL cause lndlvldual Lo work
2 WealLh ls deslred for lnherlLance Lo relaLlves
3 roducLlon of luxurv lLems Lodav mavbe a necesslLv Lomorrow
4 CompeLlLlon ls beneflclal Lo consumers causlna of lowerlna of prlces

lunC1lCnS Cl 1PL LCCnCMlC S?S1LM
1 ueLermlnlna whaL Lo produce
1 WhaL aoods and servlces ls accepLable Lo consumers bv wav of survev and lnLervlew or markeL sLudv
2 roducL promoLlon and sampllna prlor Lo producLlon
3 CulLure hablL and cusLoms pracLlces musL be conslder
4 ln command economv Lhe sLaLe or plannlna board declded
3 Pow Lo produce and how much
1 Conslder Lhe avallablllLv of resources and cosL of resources
2 AllocaLlon of resources amona dlfferenL uses
3 8aLlo of Lhe value of ouLpuL and Lhe value of lnpuL
4 rlce deLermlnaLlon bv wav of supplv and demand
3 1echnoloav avallable
6 lor whom are Lhe aoods produced
1 Conslder Lhe dlsLrlbuLlon of lncome bv Lhe poLenLlal consumers classlfled bv lncome
brackeL
2 Lowprlced aoods for lower lncome aroup hlahprlced aoods for hlaher lncome aroup
3 SusLenance of economlc efflclencv



nC1L AuAM SMl1P W8C1L PLAL1P Cl nA1lCn
ASSlCnMLn1
1 WhaL ls demand?
2 SLaLe Lhe law of demand
3 repare a demand schedule
4 WhaL ls Lhe dlfference beLween demand and quanLlLv demanded lllusLraLe
3 Whv ls Lhe demand curve sloplna downward Lo Lhe rlahL?
6 LnumeraLe Lhe facLors LhaL deLermlne demand
7 WhaL ls Supplv?
8 SLaLe Lhe law of supplv
9 repare a supplv schedule
10 WhaL ls Lhe dlfference beLween supplv and quanLlLv supplv lllusLraLe
11 WhaL facLors LhaL deLermlne supplv?
12 Pow do vou deLermlne equlllbrlum prlce?
13 Who lnlLlaLe Lhe chanae ln prlce when Lhere ls surplus? 8uver or seller?
14 Who lnlLlaLe Lhe chanae ln prlce when Lhere ls shorLaae 8uver or seller?
13 WhaL do vou mean bv floor prlce? Lxplaln bv lllusLraLlon
16 ulscuss celllna prlce CovernmenL lnLervenLlon