Presented By: Sujaya Thapa KVC, IV Sem

Concept
The totality of economic factors, such as employment,

income, inflation, interest rates, productivity, and wealth, that influence the buying behavior of consumers and institutions.

Economic Systems
It is a mechanism deals with production, distribution

and consumption of goods & services in a society comprise of people, institutions & their relationships. An Economic systems is a way in which a society is organized to decide following basic questions;
What products or services should be produced or

offered and in what quantities? How should the products or services be produced or offered? For whom should the products or services be produced or offered?

Types of Economic System

Market Allocation Market system is economic democracy where consumer decides what will be produced & by whom. Command Allocation Government ownership & control of basic means of production, distribution & exchange. State planners determine number & types of commodities to be produced, distribution & prices. Mixed Allocation Falls between market & command allocation system with both public & private sector co-exist.

Dimension of the Economy

The Economic dimension Indicates purchasing power & pattern of consumption of people. Eg: GNP, Per Capita Income, Income Distribution The Socio-economic dimension Provides data on quantity of people, indicate demographic composition of a country. Eg: Population, Regional distribution & density The Industrial & Agricultural dimension Potential to supply goods, services, raw materials. The Economic Development dimension Reflected in economic development plans, policies, strategies.

Economic Dimensions
Gross National Product (GNP) It is the total sum of all goods & services produced in a year including net property income from abroad (i.e. net profit, dividends, rent & interests). Gross Domestic Product (GDP)
Gross National Product all foreign incomes

National Income (NI)

Total value of all income in a nation during a given period

Per Capita Income Total national income divided by the number of people in a nation.

Contd
Inflation It is a rise in the general level of prices of goods and services in an economy over a period of time. Monetary Policy It is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. Fiscal Policy It is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure.

Socio-economic Dimensions
Population Higher the number of inhabitants in a country, greater the market potential. Population size provide basis for estimating consumption for durable, luxurious, low priced products. Regional Distribution & Density Regionally distributed in Mountain & Hilly region contain 78.8% of land with 51.5% people & 21.2% land in Terai region covered with 48.5 % people.

Contd
Age & Sex structure 15 years & above is 59.7% of total population, below 15 years are 40.3% & 49.8 % of total population are male & 50.2% are female that determines market of a nation. Labor Force Composition All types of skilled, semi-skilled & un-skilled labor with different age, gender & ethnicity Employment Trends Quitting traditional family occupations like farming, cottage. Moving towards cities for good jobs.

Contd
Migration & foreign Employment Increasing migration in urban areas due to family pressure, better living standards etc. Migration also results due to better employment opportunities.

Industrial & Agricultural Dimensions

Industry In year 1960s, jute processing, tea production were done. 70s & 80s, export oriented carper, garment industries which contributed 16% in GDP. Service Sector (tourism, education, healthcare etc) Agriculture Involvement of 80% of population & backbone of Nepal. It is the source of living for 90% of poor population. 33% of contribution in GDP. Fishery Floriculture, Poultry Farming

Economic Development Dimensions

Business sectors were highly influenced by National

Planning activities. Era of planned development programs were started from year 1956. First Plan (1965-1961)
Objective of economic & social development

Second Plan (1963-1965) Objective of infrastructural development Third Plan (1965-1970) Rapid economic growth through transportation & electricity

Contd
Fourth Plan (1970-1975) Emphasis on regional development Fifth Plan (1975-1980) Development in infrastructure & social sectors like, roads, power, telecommunication, family planning etc Sixth Plan (1980-1985) Priority to sectoral growth that focus on human resource development & participations. Seventh Plan (1985-1990) Prioritized minimum quality of life for the people.

Contd
Eighth Plan (1992-1997) Economic policy reforms, Foreign Direct Investment Ninth Plan(1997-2002) Poverty alleviation & Industrial development Tenth Plan(2002-2007) Poverty alleviation

Thank You!!!