Ukraine 11 клас Economics (profile level)
Chapters: 3
1. Enterprise and entrepreneurship
Entrepreneurship and the firm (8 h) · Organisation and performance indicators (8 h) · Financial activity of the enterprise (8 h) · Management of the enterprise (8 h)
- Entrepreneurship Development – Entrepreneurship is starting a new business by spotting a need, putting resources together and taking the risk. India needs entrepreneurs for jobs, new ideas and balanced growth. The process runs from knowing yourself to launching and growing. Start-up India (2016) supports new firms, funding comes from savings, angels, venture capital, banks and crowdfunding, and intellectual property rights protect new ideas, brands and creative work.
- Cost and Revenue: TC, AC, MC and TR, AR, MR – Cost is what a firm spends on inputs. Total cost (TC) = total fixed cost (TFC) + total variable cost (TVC). Dividing by output gives AFC, AVC and AC; marginal cost (MC) is the extra cost of one more unit. AFC keeps falling; AVC, AC and MC are U-shaped, and MC cuts AVC and AC at their minimum. Revenue is money from sales: TR = P × q, AR = TR/q = price, MR = extra TR from one more unit. With a fixed price AR = MR; with a falling price MR lies below AR and TR is highest where MR = 0.
- Financial Management: Raising and Using Money Wisely – Financial management is about getting money at the lowest cost and using it in the best way. Its main objective is to maximise shareholders' wealth, seen in a rising share price. It makes three decisions: investment (where to use money), financing (from where to raise it) and dividend (how much profit to share). Financial planning prepares a money budget in advance. Capital structure is the mix of debt and equity; trading on equity uses cheap debt to raise EPS. Fixed capital buys long-life assets; working capital runs daily work.
- Nature and Significance of Management – Management means getting work done with and through people so that goals are reached on time (effectiveness) and at low cost (efficiency). It has organisational, social and personal objectives. It is partly a science, fully an art and not yet a full profession. It works at three levels (top, middle, lower) through five functions (planning, organising, staffing, directing, controlling), and coordination joins them all.
2. National economy and the role of government
Integrity of the national economy (8 h) · Unemployment (4 h) · Inflation (4 h) · Role of government (6 h) · Public finance and state budget (9 h) · Monetary regulation (9 h)
- Basic Macroeconomic Concepts: Goods, Stocks, Flows and Investment – Macroeconomics looks at the whole economy. Before we measure national income we need a few words. Final goods are bought for final use; intermediate goods are used up by firms in making other goods in the same year. Final goods are consumption goods (used up by families) or capital goods (used again and again to produce). A stock is measured at a point of time; a flow over a period. Gross investment is all new capital; depreciation is normal wear and tear; net investment = gross investment − depreciation.
- Unemployment: Meaning, Rate, Types, Costs and Cures – A person is unemployed when they have no job, are able to work, and are actively looking for work. The labour force is everyone who is employed plus everyone who is unemployed. The unemployment rate is the unemployed divided by the labour force, times 100. Economists sort unemployment by its cause: frictional (moving between jobs), structural (skills or places no longer match the jobs), cyclical (a slump in total demand) and seasonal (work only in some months). Unemployment costs the person income, costs the country lost output and tax, and can harm health and society. Governments fight it with spending and interest-rate policy for cyclical unemployment and with training, information and mobility for the other types. Some unemployment always remains; the lowest sustainable level is called the natural rate.
- Inflation: Why Prices Keep Rising – Inflation is a general, continuing rise in the price level, which lowers the purchasing power of money. It is measured with a price index such as the CPI: inflation rate = (new index − old index) ÷ old index × 100. Causes: demand-pull (demand grows faster than output), cost-push (costs rise) and expectations. Effects hit savers, fixed incomes and competitiveness. Deflation is a falling price level. Central banks aim for low, stable inflation, often about 2%, using interest rates; governments also use fiscal and supply-side policies.
- Government Intervention in Markets – Markets often work well, but they can fail: harmful goods are over-used, useful ones under-used, public goods are not provided, firms gain monopoly power, and incomes become very unequal. Governments step in with indirect taxes (which raise price and cut quantity), subsidies (which lower price and raise quantity), maximum and minimum prices, regulation, state provision of public goods and services, public ownership or privatisation, competition policy, and redistribution through taxes and benefits. They also use fiscal and monetary policy to smooth the economic cycle. Intervention can itself go wrong – this is government failure.
- Government Budget and the Economy – A government budget is a yearly plan of expected receipts and planned expenditure. Receipts are revenue (taxes, non-tax income) or capital (borrowing, loan recovery, disinvestment). Spending is revenue (builds no asset) or capital (builds an asset or cuts debt). A budget can be balanced, surplus or deficit, and the deficit is measured as revenue, fiscal and primary deficit.
- Money Creation by Banks and the Central Bank (RBI) – Banks keep only a part of deposits as reserves (the legal reserve ratio, LRR) and lend the rest. Each loan is spent and comes back to banks as a new deposit, so total deposits become a multiple of the first deposit: total deposits = initial deposit × 1/LRR. The RBI is India's central bank: it issues currency, is banker to the government and to banks, is lender of last resort, controls credit and keeps foreign exchange reserves. It controls credit with repo rate, reverse repo rate, bank rate, CRR, SLR, open market operations and margin requirements.
3. World economy and integration
World economy and national economy (5 h) · World trade and monetary system (5 h) · International labour migration (4 h) · International capital flows (4 h)
- Globalisation and the Indian Economy – Globalisation is the fast joining of countries' economies through trade, investment, technology and movement of people. MNCs spread production across countries. New technology and liberalisation (removing trade barriers, in India from 1991) made it possible. The WTO sets trade rules. Globalisation helped some groups and hurt others, so we need fair globalisation.
- International Trade – International trade is buying and selling goods and services across the boundaries of countries. Selling abroad is export; buying from abroad is import. It helps nations (foreign exchange, growth, jobs) and firms (profit, new markets). Exports and imports follow fixed steps and need many documents, such as the letter of credit and bill of lading. The WTO (1995) makes trade rules and works to cut trade barriers.
- International Trade: Basis, Balance, WTO and Ports – International trade is the exchange of goods and services between countries. It began with barter, grew along routes like the Silk Route, passed through the cruel slave trade and colonial trade, and expanded with industry. Countries trade because they differ in resources, population, development, foreign investment and transport. Balance of trade compares exports and imports. Trade can be bilateral or multilateral; free trade lowers barriers, while dumping sells goods abroad below cost. The WTO sets global rules, regional blocs group neighbours, and ports of many types act as gateways.
- Migration – Migration is the movement of people from one place to another to live there, for some time or for good. The place left is the origin; the place reached is the destination. People move because of push factors (problems at home) and pull factors (attractions elsewhere), but obstacles like cost, distance and laws stop some. Migration can be internal or international, temporary or permanent, voluntary or forced, and it changes both the origin and the destination.