NCERT Solutions for Class 12 Macro Chapter 1 - Introduction To Macro Economics

1. What is the difference between microeconomics and macroeconomics?

Ans: The difference between microeconomics and macroeconomics are:

2. What are the important features of the capitalist economy?

Ans: These are the major characteristics of capitalist economics.

1. Competitiveness exists between producers and free enterprise is guaranteed.

2. The market determines the price of the commodity in accordance with demand and supply.

3. The productive resources are private.

4. The main reason for producers is to maximise profit.

3. Describe the four major sectors in an economy according to the macroeconomic point of view.

Ans: They are the four most important sectors of the economy from a macroeconomic point of view.

External sector: The sector is committed to the export and import (external trade) of goods and services. If goods and services produced in this country are sold to the rest of the world, then that's an export. If goods and services are purchased from the rest of the world, then we are talking about imports.

Government: A state or government shall keep law and order, maintain growth and stability, and provide administrative services. The primary reason for a government is to undertake development projects like dams, roads, heavy industries that usually have long gestation periods. The government invests in education and the health sector and delivers these amenities at a insignificant cost. The purpose of any government is to serve, not to make a profit.

Firms: Enterprises are economic units that perform the output. They employ and organize production factors and undertake production processes to motivate the realization of profits.

Households: Households purchase goods and services for consumption and also provide factors of production such as land, labour, capital and entrepreneurship. Households supply the business's production market.                                         

4. Describe the Great Depression of 1929.

Ans: The Great Depression became a serious economic crisis that began in 1929. It began in the United States of America with the stock market crash and gradually spread into other countries of the world. The main cause of the crisis has been the decrease in aggregate demand due to underconsumption and over-investment. As a result of under-consumption and excessive investment, the stock of finished goods began to accumulate, resulting in a low price level and therefore a low level of profit. Money in the economy had been converted into unsold stock of finished products that lead to an acute decrease in employment and thus the level of income has fallen drastically.

The demand for commodities in the economy was so low that output was reduced leading to unemployment. In the United States, the unemployment rate had increased from 3% to 25%. The Great Depression has its own implications and importance in the economy, as it leads to the failure of the conventional approach to the economy. Those who believed in the market forces of demand and supply, opened the door to the emergence of the Keynesian approach. It was this incident that provided economists with sufficient evidence to recognize macroeconomics as a distinct sector of the economy.

Macroeconomics Chapter 1 Class 12 PDF

Skilled teachers with years of experience have prepared these Class 12 Chapter 1 Macroeconomics Solutions following the latest NCERT guidelines to cater to the need of students. Class 12 students who find it challenging to cope up with this relatively new and vast concept can easily take professional and friendly help, provided by Vedantu.

Macroeconomics Chapter 1 Class 12 PDF consists of questions that are specially prepared by proficient teachers to enlighten students on the concepts covered in Chapter 1 of Class 12 Macroeconomics. Also, students get to acknowledge the vital role this topic has on our present-day economy. After going through the study materials provided by Vedantu, students will be able to answer every question from this chapter. Students who want to ace in Macroeconomics in the Class 12 Board examinations can download chapter 1 of Macroeconomics Class 12 PDF from the official website and mobile application of Vedantu.

Economics Class 12 Chapter 1 Macroeconomics

The very first chapter of Class 12 Economics, “Introduction to Macro Economics” encompasses a thorough discussion of the concept of macroeconomics covering the introduction, emergence, and some other related theories of Macroeconomics.

The PDF of Ch 1 Macroeconomics Class 12 on Vedantu, revolves around four questions which are broad in nature. The answers to these questions are prepared by the veteran Vedantu tutors and reflect their years of experience, solely dedicated to building the next generation Economists.

Question 1:

The first question of the first chapter “Introduction to Macroeconomics” starts with differentiating Microeconomics from Macroeconomics. On the basis of 12 points, the answer to this question is well elaborated. Students learn almost every aspect of the concerned topic and get an overview of both Microeconomics and Macroeconomics in a nutshell.

Question 2:

The answer to the second question of Chapter 1 Macroeconomics Class 12 deals with the features of a capitalist economy. The answer is framed with different points, where students will learn the definition of a capitalist economy in the first part. Following this comes some examples of capitalist economy and famous quotes about the same. The next part comprises five points that discuss the essential features of a capitalist economy.

Question 3:

Question 3 introduces students to the four majors of an economy from the macroeconomic point of view. The question focuses on four key sectors, namely - Household sector, Government sector, Business sector, and Foreign sector that are responsible for expenditures on Gross Domestic Product (GDP).

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Question 4:

The answer to the last question provides a detailed discussion of the Great Depression of 1929. This answer discusses the causes that led to this economic downturn in the 20th century. Students also learn about the massive impact of the Great Depression on employment and thus led to the breakdown of the economy. Last but not least, the flowchart provided at the end of this answer summarizes the causes and effects of the Great Depression.

Chapter 1 Of Macroeconomics Class 12: Marks Weightage

This chapter has a weightage of 4 marks. Students can grasp the concepts covered in this chapter well by referring to the Solutions on Vedantu.

Advantages of NCERT Solutions for Class 12 Macroeconomics Chapter 1

Students who took the assistance of NCERT solutions for Class 12 Macroeconomics Chapter 1 find it helpful for various reasons.

• These NCERT Solutions are prepared by following the latest NCERT guidelines.

• Each and every question are handled by teachers who have years of experience in their respective subjects and thus know the tricks to approach a specific question.

• Simple language and elaborate discussion of answers strengthen the basic concepts of students.

If you are preparing for the Class 12 Board examinations and got stuck in the very first chapter of Economics, you can always trust Vedantu as your exam help. NCERT Solutions for Class 12 Macroeconomics Chapter 1 has been the preferred study guide of students for several years.

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