RBI GRADE

B Basics of Economy
 Meaning of Economics
• Study of how humans work together to convert
resources (limited) into goods and services to satisfy
their wants (unlimited) and how they distribute the
same among themselves.

• Major assumption : Resources are limited but

demands or needs are unlimited.

• The challenge lies in distributing limited resources in

a way that maximizes satisfaction and needs of
everyone.
 Branch of Economics
Basis Micro Economics Macro Economics

• Studies the • Studies the

behaviour of an behaviour of the
Meaning individual whole economy
consumer, firm, (both national and
family international)

• Covers various • Covers various

issues like demand, issues like
supply, Pricing, national income,
Scope factor pricing, general price level,
production, distribution,
consumption, employment,
economic welfare. money etc.
How many of the following is/are correct about macroeconomic
issues?
(i) The price of tomato.
(ii) The unemployment rate in the country.
(iii) The profit of a company A.
(iv) The inflation rate in the country.
(v) Increasing Demand of Onions

Choose the correct code

A. Only one statement is correct
B. Only two statements are correct
C. Only three statements are correct
D. Only Four statements are correct
E. All are correct statement
How many of the following is/are correct about macroeconomic
issues?
(i) The price of tomato.
(ii) The unemployment rate in the country.
(iii) The profit of a company A.
(iv) The inflation rate in the country.
(v) Increasing Demand of Onions

Choose the correct code

A. Only one statement is correct
B. Only two statements are correct
C. Only three statements are correct
D. Only Four statements are correct
E. All are correct statement
Answer : B
 Types of Economies

Market-Based Command-Based
Mixed Economies
Economies Economies

• “Free market" • Government controls • Allows a level of

economies. the production levels, economic freedom,
• Freely exchange of pricing, and but governments
goods and services. distribution of goods. interfere in economic
• Follow supply and • Competition is activities and achieve
demand. discouraged or social aims.
banned.
 Sectors of Economy
On the basis of Economic Activity

Primary Secondary Tertiary

Sector Sector Sector

• Mining and • Automobile • Transportation

quarrying production and distribution
• Fishing • Textile • Tourism
• Agriculture • Chemical • Insurance and
engineering banking
• Forestry
• Aerospace space • Healthcare
• Hunting
• Shipbuilding • Legal services
 Sectors of Economy
On the basis of Organisation

Formal Sector Informal Sector

• Worker has a formal contract

• Work conditions are not defined
with the employer
• Irregularly remuneration and
• Established platforms to
uneven payment
express grievances
• No fixed hours of work and mostly
• Stakeholders are aware of
meagre salaries
their rights
• Stakeholders have poor knowledge
• Social security net for health
about their rights
and life risks
 Informal Economy
• According to the International Labour Organization,
about 60 % of the world’s employed population
participates in the informal sector.

Why Informality in the economy arises?

• To avoid taxes and social contributions
• To avoid compliance with standard and licencing
requirements
• They might be too poor to access public or financial
services
• They may lack education and skill for formal
employment
 Informal Economy

Issues with Informal firms

Obstacle to achieving sustainable development

They do not contribute to the tax pool

Limited access to finances : Remain Small

They are associated with low productivity

Characteristics of Informal Economy

 Informal Economy

For every worker there should be 3 kinds of security

1. Wage Security: Wages (Amendment) Act 2017.
2. Job Security
3. Social Security: e.g-medical emergencies etc.
 Informal Economy

Initiatives Taken by Government

• Labour Reform: Labour codes on industrial relations;
occupational safety, health and working conditions;
and social security — proposing to simplify the
country’s archaic labour laws.
• E-Shram Portal: It is the first-ever national database
of unorganised workers including migrant workers,
construction workers, gig and platform workers, etc.
• Udyam Portal: Facilitate the registration of MSMEs.
• Pradhan Mantri Shram Yogi Maan-dhan: A Central
Sector Scheme of Ministry of Labour and Employment
• PM SVANidhi: MoHUA has launched Pradhan Mantri
Street Vendor's Atma Nirbhar Nidhi.
 Sectors of Economy
On the basis of Ownership
 PYQ
How would a free-market economy be described? (NABARD
Grade A – 2018)

A. The international exchange of goods and services

B. An economy based on supply and demand with little or no
government control
C. An economy that combines characteristics of capitalism and
socialism
D. An economy in which decisions are made by the government
rather than by the interaction between consumers and
businesses
E. None of the above
 PYQ
How would a free-market economy be described? (NABARD
Grade A – 2018)

A. The international exchange of goods and services

B. An economy based on supply and demand with little or no
government control
C. An economy that combines characteristics of capitalism and
socialism
D. An economy in which decisions are made by the government
rather than by the interaction between consumers and
businesses
E. None of the above
 PYQ (Pre 2022)
Which of the following sector is not related to the Service
sector?

1. Retail
2. Mining
3. Banking
4. Real Estate
5. All of the above
 PYQ (Pre 2022)
Which of the following sector is not related to the Service
sector?

1. Retail
2. Mining
3. Banking
4. Real Estate
5. All of the above
How does India's mixed economy system contribute to its economic
growth and development compared to countries with different economic
models? (10 Marks)
Introduction : Explain about India’s Mixed Economy

Body :
1. Features of Mixed Economy
2. Advantages
3. Challenges

Conclusion