BASIC MACRO CONCEPT

Ø  BASIC MACRO CONCEPTS

Ø  MACRO ECONOMICS

Ø  MEANING OF CONSUMER GOODS

·         CONSUMPTION GOODS

• CONSUMPTION GOODS CONSUMPTION GOODS ARE THE GOODS,THOSE SATISFY CONSUMER’S WANTS DIRECTLY
• LIKE BREAD,SURF ,SOAPS.TV,FRIDGE,FURNITURE ,CAR ETC
• TOTAL EXPENDITURE ON CONSUMPTION GOODS IS KNOWN AS FINAL CONSUMPTION EXPENDITURE.
• FINAL GOODS ALSO INCLUDES SERVICES.
• HOUSEHOLD SECTOR GETS VARIOUS SERVICES SUCH AS BANKING,MEDICAL AND EDUCATION ETC
• HOUSEHOLD CONSUMER SECTOR FORMS THE BIGGEST PART OF THIS EXPENDITURE.

• CONSUMPTION GOODS ARE ALSO CONSUMED BY

1. THE GOVT
2. NON GOVT ORGANIZATION

   

u CONSUMPTION GOODS

1.DURABLE GOODS

2.SEMI DURABLE GOODS

3.NON DURABLE GOODS

4.SERVICES

Ø  DURABLE GOODS: LONG LIFE AND CAN BE USED FOR MANY YEARS.

·         LIKE TV.CARS,FRIDGE ETC

Ø  SEMI-DURABLE GOODS: RELATIVELY LIFE  SHORTER THAN DURABLE GOODS AND MORE THAN NON DURABLE GOODS. CLOTHES,SHOES ETC

Ø  NON DURABLE GOOD: ARE OF MUCH SHORTER LIFE IN DAYS. GET DESTROYED AFTER USE. PERISHABLE GOODS.MILK,VEGETABLES,FRUITS ETC

Ø  SERVICES:-SOLD AND PURCHASED LIKE OTHER GOODS. NON MATERIAL GOODS. SERVICES OF FINANCIAL ADVISOR,TEACHERS,DOCTORS

u   CONSUMPTION GOODS ARE USED BY HOUSEHOLD SECTOR AND IT IS THE MAJOR PART OF NATIONAL INCOME

u   CAPITAL GOODS

·         CAPITAL GOODS ARE RELATIVELY OF HIGHER VALUE. THEY ARE THE FIXED ASSETS OF THE FIRM. THEY ARE CALLED PRODUCER GOODS. BECAUSE THEY ARE USED TO PRODUCE OTHER THINGS. PRODUCTIVITY IS DETERMINED FROM IT AND HELP IN RAISING THE NATIONAL INCOME.

·         SMALL VALUE THINGS LIKE FILES AND SCREWDRIVERS ARE EXCLUDED

·         THEIR VALUE SHOULD BE OF HIGHER VALUE BUT VALUE GOES ON DECREASING WITH THE USE,WEAR AND TEAR AND OUTDATED

·         LOSS OF THEIR VALUE IS DEPRECIATION. ITS DEMAND IS DERIVED

Ø  DIFFERENCE  BETWEEN CONSUMER GOODS AND CAPITAL GOODS

u   CONSUMPTION GOODS

1.     SATISFY HUMAN WANTS DIRECTLY

2.     OFTEN FINAL GOODS

3.     MOSTLY CONSUMPTION GOODS ARE USED ONCE ONLY

4.     DO NOT HELP TO PROMOTE PRODUCTIVITY

Ø  CAPITAL GOODS

1.     SATISFY HUMAN WANTS INDIRECTLY

2.     OFTEN INTERMEDIATE NATURE

3.     ARE USED REPETITIVELY

4.     RAISING PRODUCTIVITY

5.     USED TO PRODUCE CONSUMER GOODS

u   PRODUCER AND CAPITAL GOODS

1.     WE ALSO REQUIRE RAW MATERIAL ALONG WITH CAPITAL GOODS. SO MACHINES ALONG WITH RAW MATERIAL ARE KNOWN AS PRODUCER GOODS.

2.     RAW MATERIAL CAN BE CONSUMED ONCE ONLY.

3.     ALL CAPITAL GOODS ARE PRODUCER GOODS. BECAUSE THEY ARE USED IN THE PROCESS OF PRODUCTION.

4.     ALL PRODUCERS GOODS ARE NOT CAPITAL GOODS

Ø  FINAL GOODS

1.     FINAL GOODS ARE READY FOR CONSUMPTION AFTER CROSSING BOUNDARY LINE OF PRODUCTION. THESE ARE NOT USED AS INTERMEDIATE GOODS NOR SOLD.

2.     CONSUMER GOODS:- WHICH ARE BOUGHT BY CONSUMER FOR SATISFACTION OF HUMAN WANTS

3.     PRODUCER GOODS :- THESE ARE THOSE FINAL GOODS WHICH ARE USED FOR FURTHER PRODUCTION BY THE FIRMS.

4.     EXPENDITURE ON FINAL GOODS:_ CONSUMPTION EXPENDITURE PLUS INVESTMENT EXPENDITURE

u   INTERMEDIATE GOODS

·         WHICH ARE USED EITHER FOR RESALE OR FOR FURTHER PRODUCTION IN SAME YEAR. THESE GOODS ARE PURCHASED FROM ONE PRODUCTION UNIT BY OTHER PRODUCTION UNIT.

·         BUT SAME ITEM IS NOT ALWAYS AN INTERMEDIATE BECAUSE IT DEPENDS UPON ITS USE

Ø  DIFFERENCE BETWEEN FINAL GOODS AND INTERMEDIATE GOODS

·         INTERMEDIATE GOODS

1.     ARE NOT PART OF NATIONAL INCOME.

2.     REMAIN WITH IN THE PRODUCTION PROCESS

3.     ARE USED IN PRODUCTION PROCESS AS RAW MATERIAL

Ø  FINAL GOODS

1.     FORM A PART OF NATIONAL INCOME

2.     REMAIN OUT OF PRODUCTION PROCESS TO BE CONSUMED

3.     READY FOR CONSUMPTION.