Revision Notes
Class 12 - Economics
Chapter 1 - Macroeconomics
Macro Economics:
● The term macro is derived from the Greek word ‘makro’, which means
“large”. It is a branch of economics concerned with the description and
explanation of economic processes involving aggregates.
● An aggregate is a collection of economic subjects that have some
characteristics in common.
● Macroeconomics emerged after the publication of John Maynard Keynes'
book, ‘The Theory of Employment, Interest, and Money’ in 1936. This
branch investigates the economic relationships or issues that affect an
economy as a whole, such as saving and total consumption.
● It investigates the principles, problems, and policies associated with
attaining full employment and expanding production capacity.
Economic Agents:
● Individuals or institutions making economic decisions are referred to as
economic units or economic agents.
● They could be manufacturers or service providers who decide what and
how much to produce.
● They could be entities such as the government, corporations, or banks that
make economic decisions such as how much to spend, what interest rate to
charge on credit, how much to tax, and so on.
Great Depression:
● The Great Depression is widely regarded as the worst and longest
economic downturn or recession in modern history. It all started in the
United States. It then had a cascading effect on the world's economies.
● The Great Depression is said to have begun with the October 1929 stock
market crash in the United States. To be more specific, the stock market
crashed on October 24, 1929, which became known as Black Thursday in
American history.
● The stock market crash caused panic among Wall Street investors, causing
the stock market to lose nearly billions of dollars. This resulted in the
failure of major financial institutions, such as banks.
● The depression was caused by an overabundance of food grains in the
market, which resulted in a drop in agricultural prices.
Class XII Economics 1
Class 12 - Economics
Chapter 1 - Macroeconomics
Macro Economics:
● The term macro is derived from the Greek word ‘makro’, which means
“large”. It is a branch of economics concerned with the description and
explanation of economic processes involving aggregates.
● An aggregate is a collection of economic subjects that have some
characteristics in common.
● Macroeconomics emerged after the publication of John Maynard Keynes'
book, ‘The Theory of Employment, Interest, and Money’ in 1936. This
branch investigates the economic relationships or issues that affect an
economy as a whole, such as saving and total consumption.
● It investigates the principles, problems, and policies associated with
attaining full employment and expanding production capacity.
Economic Agents:
● Individuals or institutions making economic decisions are referred to as
economic units or economic agents.
● They could be manufacturers or service providers who decide what and
how much to produce.
● They could be entities such as the government, corporations, or banks that
make economic decisions such as how much to spend, what interest rate to
charge on credit, how much to tax, and so on.
Great Depression:
● The Great Depression is widely regarded as the worst and longest
economic downturn or recession in modern history. It all started in the
United States. It then had a cascading effect on the world's economies.
● The Great Depression is said to have begun with the October 1929 stock
market crash in the United States. To be more specific, the stock market
crashed on October 24, 1929, which became known as Black Thursday in
American history.
● The stock market crash caused panic among Wall Street investors, causing
the stock market to lose nearly billions of dollars. This resulted in the
failure of major financial institutions, such as banks.
● The depression was caused by an overabundance of food grains in the
market, which resulted in a drop in agricultural prices.
Class XII Economics 1
