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BASIC INDICATORS OFECONOMIC DEVELOPMENT

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National Income;

National income is the total money value of all

final goods and services in a country during a

given period of time.

It is estimated at;

Current price(quantity produced *currentmarket price)

Constant price(quantity produced*base year

price)

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Gross domestic product

GDP can be estimated at

Market price

Factor Cost.

GDP at market price is the total money value offinal goods and services produced in thedomestic territory of a country in a year.

GDP at factor cost is the sum of all factor

payments( wages, Interest, rent,profit anddepreciation)

Net Domestic Product(NDP)

=GDP-Depreciation

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Per Capita Income

Per Capita Income is per Head Income

It is obtained by dividing the national income bytotal population.

Per Capita Income of developed countries is 12

times more than that of India.

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Savings and Investments

Savings and investments are required for the

development of any economy.

Savings originate from income and the financial

intermediaries transfer them to investors. Investors use them for capital formation in turn

generates a stream of income apart of which is

saved.

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Infrastructure

It is the basic physical and organizational

structures needed for the operation of a society

or enterprise or the services and facilities

necessary for an economy to function The term typically refers to the technical

structures that support a society such as roads,water supply, power grids, telecommunication,

and so forth.

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Foreign Trade and Balance ofPayments

Trade between two or more nations is called foreigntrade or international trade.

BOP Meaning: A record of all transactions madebetween one particular country and all other

countries during a specified period of time

Balance of payments may be used as an indicator ofeconomic and political stability.

For example, if a country has a consistently positiveBOP, this could mean that there is significantforeign investment within that country

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ECONOMIC ENVIRONMENT

MEANING:

It refers to all those economic factors which

have a bearing on the functioning of abusiness unit.

Business depends on economic environmentfor inputs and for selling its finished goods.

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ECONOMIC FACTORS INFLUENCING

BUS

INESS

SE

CTOR Capital

Labor price

Price Levels

Productivity

Entrepreneurs and Managers

Government Policies

Status of consumers Agriculture

Economic Trend