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Basic Concepts -Economic activity, Final goods and it's characteristics
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This lesson discusses about basic concepts of Macroeconomics and mainly final goods and it's characteristics features.

Arpita Prakash
YouTuber NCERTs series initiator at Unacademy 'Educator of the Month' for Feb'19 CBSE 0.1% Merit Certificate holder in Mathematics

Unacademy user
  1. Some Basic Concepts of Macroeconomics Country's economic wealth/ well being-> depends on how the resources are used in generating a flow of production and how are wealth and income generated from that process (as a consequence) Modern Economy- Flow of production arises out of production of commodities (goods and services) by millions of enterprises- large and small o Giant corporations employ a large number of people & single entrepreneur enterprises o Each producer of commodity intends to sell her output o Consumer- individual/enterprise o Commodities purchased by that entity might be for final use or for use in further production o Further production- loss of characteristics as specific good & transformation into another good through productive process o Final good- item meant for final use; and will not pass through any more stages of production or transformations Passes out of active economic flow, once sold . No further transformation by any producer . Possible transformation by ultimate purchaser (Eg tea leaves) . A good becomes a final good by the economic nature of it's use & not by the nature of the good " Eg: Tea leaves used in home kitchen( not an economic activity) v/s used in Restaurant ( economic value addition- tea leaves not a final good but an input)

  2. NATIONAL INCOME ACCOUNTING - Consumption/ Consumer goods- consumed when purchased by ultimate consumers ( including services) - Eg-food, clothing, recreation " Capital goods- durable character, used in production process - Eg- tools, implements and machines Crucial backbone of any production processes- aid and enable production Gradually undergo wear and tear ; hence repaired or gradually replaced over time Consumer durables not extinguished by immediate or even short period consumption Relatively long life as compared to articles like food/ clothing Undergo wear and tear with gradual use and often need repairs and replacement of parts (Eg machines) Need to be preserved, maintained and renewed Eg Television sets, automobiles or home computers - All final goods & services produced in economy in given period of time- either consumption goods (durable & non durable) or capital goods