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Presented By:

Sujaya Thapa

KVC, IV Sem

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Concept The totality of economic factors, such as employment,

income, inflation, interest rates, productivity, andwealth, that influence the buying behavior ofconsumers and institutions.

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Types of Economic System Market Allocation

Market system is economic democracy where consumerdecides 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 systemwith both public & private sector co-exist.

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Dimension of the Economy The Economic dimension

Indicates purchasing power & pattern of consumption ofpeople. Eg: GNP, Per Capita Income, Income Distribution

The Socio-economic dimension

Provides data on quantity of people, indicate demographiccomposition of a country. Eg: Population, Regionaldistribution & density

The Industrial & Agricultural dimension Potential to supply goods, services, raw materials.

The Economic Development dimension

Reflected in economic development plans, policies, strategies.

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Economic Dimensions Gross National Product (GNP)

It is the total sum of all goods & services produced in ayear 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 peoplein a nation.

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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 interestfor 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 governmenttaxation and expenditure.

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Socio-economic Dimensions Population

Higher the number of inhabitants in a country, greaterthe market potential.

Population size provide basis for estimating consumptionfor durable, luxurious, low priced products.

Regional Distribution & Density

Regionally distributed in Mountain & Hilly regioncontain 78.8% of land with 51.5% people & 21.2% land inTerai region covered with 48.5 % people.

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Contd

Age & Sex structure

15 years & above is 59.7% of total population, below 15 yearsare 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 withdifferent age, gender & ethnicity

Employment Trends Quitting traditional family occupations like farming,

cottage.

Moving towards cities for good jobs.

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Contd

Migration & foreign Employment

Increasing migration in urban areas due to familypressure, better living standards etc.

Migration also results due to better employmentopportunities.

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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

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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

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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.

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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

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Thank You!!!