17.Aggregate Demand

What does microeconomics deal with?

Microeconomics is the branch of economics that deals with decision-making and other behaviour by these individual units. Another branch of economics, known as macroeconomics, deals with large groups or aggregates.

Why is GNP considered as macroeconomic concept?

Because GNP deals with the output of the country as a whole.

What is the business or investment sector made up of?

The business, or investment sector made up of proprietorships, partnerships, and orporations. It is the productive sector responsible for bringing the factors of production together to produce output.

What do the sectors of the macroeconomics represent?

Sectors of the macroeconomics represent individuals, business, government and foreign markets.

What does the United State export?

The United States export computers, airplanes, and farm products to foreign buyers. It also imports a large number of different items from foreign countries.

18."Money in our society"

What is money? Basically, money is what money does.

Has money always been the coins and paper bills?

Metallic coins last a long time under normal use and generally do not go out of circulation unless they are lost. Paper currency also is reasonably durable. Modern money also rates high in divisibility. The penny which is the smallest denomination of coin, is more than small enough, for almost any purchase.

What is the definition of money? Money is a specific commodity which is the universal equivalent of cost of other commodities or services.

What kinds of modem money do you know?... are coin and currency.

What are the most important characteristic of modern money? Modern money is very portable⁵ when people carry checkbooks. Modern money is very durable. Modern money also rates high in divisibility⁹. Modern money, however, is not as stable in value.

19."Functions of money

•What are the three functions of money? This means that money can be any substance¹ that functions as a Medium of Exchange, a Measure of Value, and a Store of Value.

What is money as a medium of exchange? As a medium of exchange, money is something generally accepted as² payment³ for goods and services

What does money express as a measure of value? As a measure of value, money expresses worth in terms that most individuals understand.

How does money function as a store of value? Money also serves as a store of value. This means goods or services can be converted into⁴ money that is easily stored until some future time.

What is the money supply? quantity of money in circulation in an economy at any given time

20."Taxation"

What are taxes? Tax is to impose a financial charge or other levy upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law. There are three types of taxes in the United States: proportional, progressive and regressive.

What functions do the taxes have? 1.Fiscal function-formation and mobilization of the state financial resources , accumulation of the budgetary funds for the implementation of national and targeted national programs.2. Distributive (or social) function - redistribution of the public revenues between different social categories of population. Taxation allows altering of the correlation between revenues of separate social groups.3.Control function - government carries out control over the economical activities of organizations and citizens, their sources of revenue and expenditures.4. Regulatory function (includes stimulating and discouraging functions) - shows the government's attitude towards different achievements of specific categories of citizens; government can stimulate the development

What are the purposes of direct and indirect taxation? The main purpose of taxation is to accumulate funds for the functioning of the government machineries. Further, the other important purposes of taxation are as follows -

• Increase in effectiveness and productivity of the nation

• Increase in the quantum of revenue collection

• Improvement in services of the government

• Improve employment at all industry verticals

• Induction of modern technology in to the system

• Rationalization of terms and condition of the economic system

• Rationalization of employment terms and conditions

Are businesses taxed equally? No, they are not, each form of businesses have some unique forms and types of taxation.

What bodies collect taxes? The tax, customs and other services provided by law, collect taxes