NCERT Solutions for Class 12 Economics II Chapter 1 Introduction

Ans : Difference between Micro and Macro Economics


 

Ans : Features of capitalist economy are 
1. It is an economic system In which no restriction is imposed by government and every individual is enjoying economic freedom.
2. Factors of production are privately owned.
3. Profit maximisation is prime consideration.
4. Large number of buyers and sellers exist in the market and there is tough competition. 

Ans : According to the macroeconomics an economy in classified Into the following four sectors. 
1. Household Sector This sector engaged In the consumption of goods and services. Household spend their income on payment for goods and services purchased. payment of lax to government. 
2. Production Sector This sector engaged in the production of goods and services. This sector makes payments tor factor services to households, taxes to the government, imports of the materials. 
3. Government Sector This sector engaged in such activities which are related to taxation and subsidies. 

Ans : The Great Depression was an economic crisis started in 1929 and continued for next several next years. It began in the United States of America after the stock market crash. The main cause behind it was the fall of aggregate demand due to under consumption and over investment. The output and employment levels in the countries of Europe and North America fall by huge amounts. It affected the whole world. The demand of the goods in the market during this period was very low so production was also lowered which lead to unemployment. In I-ISA, from 1929 to 1933, unemployment rate rose from 3 percent to 25 percent.