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Principles of Management and Economics (1)

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10 views

Principles of Management and Economics (1)

Uploaded by

tejashwinibadiger2003
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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PRINCIPLES OF MANAGEMENT AND

ECONOMICS

PRESENTED BY:
Tejaswini B 3BR22EC175
INRODUCTION TO ECONOMICS

Economics is the study of how individuals and societies allocate scarce resources to produce
and distribute goods and services. It examines decision-making processes and market
interactions at both individual (micro) and national (macro) levels.
Types of Economics:
microeconomics and macroeconomics.
Microeconomics:
Microeconomics focuses on the individual units within an economy, such as households and
businesses.
Macroeconomics :
Macroeconomics looks at the economy as a whole. It studies aggregate indicators and
phenomena that affect entire economies rather than individual markets
DIFFERENCES BETWEEN MICROECONOMICS AND
MACROECONOMICS

MICROECONOMICS MACROECONOMICS
• Individual agents (households, firms) • Aggregate economy (national level)
• decisions regarding resource allocation,
• National income, inflation rates
pricing, and consumption.
• macroeconomics employs a top-down approach,
• Microeconomics takes a bottom-up approach,
assessing overall economic performance
analyzing individual behaviors and decisions.
• macroeconomics looks at government policies
• Microeconomics is concerned with how
and their impact on the economy.
individuals and firms make choices regarding
resource allocation • :macroeconomic analysis typically involves
long-term trends and cycles in economic
• Microeconomic analysis often focuses on
performance.
short-term market fluctuations
CIRCULAR FLOW MODEL OF ECONOMICS

The circular flow model is a fundamental concept


in economics that illustrates how money flows
through an economy. It depicts the interactions
between different sectors—primarily households
and businesses—showing how resources and
money circulate in both directions
1. Households provide labor to businesses in
exchange for wages.
2. Businesses produce goods and services which
are sold to households.
IMPORTANCE OF THE CIRCULAR FLOW MODEL

• The circular flow model is crucial for several reasons:


• Visual Representation: It simplifies the understanding of economic interactions between different
sectors.
• Income Measurement: It helps economists measure national income by tracking expenditures across
different sectors.
• Policy Analysis: The model allows policymakers to analyze the effects of fiscal policies (like taxation)
on consumption and production patterns.
• Economics provides valuable insights into both individual decision-making (microeconomics) and
broader economic trends (macroeconomics), while the circular flow model serves as a foundational
tool for visualizing how these elements interact within an economy.
THANK
YOU

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