ARTICLES

A Producer Produces products and consumers need products when they meet and exchange products against need (money) it forms a process which is called economy. It includes the Process of Production of Products and Services to distribution, trade, and consumption of resources by consumers. 

An Economy defines how goods and services are made and exchanged. 

Goods and Services form importance in the economy. Goods are physical objects that are bought and sold. Services are which one person pays to others in exchange for their service like Teaching, Banking, Postal, Medical care, Law, etc.

Everyone from individuals to entities such as corporations, governments, etc. participates in this process. And an economy is governed by Law.

For Example:  When a Woman buys a Mobile Phone from a Shop, This activity of buying a mobile phone follows a process from producer to the shopkeeper and then finally to Woman. First buying required raw materials by the producer, manufacturing of mobile phones, distribution of mobile phones and then finally comes to the shopkeeper for selling which is sold to the end customer. This process forms the Economy. 

Key Indicators to measure Indian Economy:

Gross Domestic Product (GDP)

GDP is an indicator of the overall progress of the economy as well as the standard of living of the country. Countries track levels of economic activity through Gross Domestic Product (GDP) calculations.

Employment & Unemployment Rate

Employment rate shows persons employed, paid, and expressed as a % of the total workforce. A higher employment rate means higher growth of the economy. The unemployment rate measures the number of unemployed persons as a proportion of the total labor force. This rate reflects the inability of an economy to generate employment for those who are actively seeking work.

Inflation

Inflation shows an increase in the prices of daily goods and services. Because of Inflation Purchasing Power of Currency falls so Goods and Services become costlier, the Cost of living goes high, and ultimately it hurts economic growth.

Interest Rate 

The interest rate indicates the economy’s current position and also shows where the economy is headed. Interest rates are a lagging indicator of economic growth. 

Consumer Spending

It means how much people are spending in the country’s economy. Spending depends on a lot of factors like level of income, the tax structure of the country, employment rate, etc. More spending shows growth in the economy.