Economics Notes

➡️ Geographical mobility of labour refers to the movement of workers from one geographical area to another in search of better job opportunities. This type of mobility is often seen in developing countries, where workers migrate to urban areas in search of better wages and working conditions.
➡️ Occupational mobility of labour refers to the movement of workers from one occupation to another. This type of mobility is often seen in developed countries, where workers switch jobs in order to gain higher wages and better working conditions.
➡️ Both forms of labour mobility can have positive and negative effects on the economy. On the one hand, it can lead to increased productivity and economic growth, as workers are able to move to areas where their skills are in demand. On the other hand, it can lead to increased competition for jobs, which can lead to lower wages and poorer working conditions.

➡️ Economic Factors: Economic factors such as wages, job opportunities, and cost of living can influence labour mobility. Higher wages in one area may attract workers from other areas, while a lack of job opportunities in one area may cause workers to move elsewhere.
➡️ Social Factors: Social factors such as family ties, cultural norms, and language barriers can also affect labour mobility. Workers may be more likely to move to an area where they have family or friends, or where their culture is more accepted.
➡️ Political Factors: Political factors such as government policies, regulations, and taxes can also influence labour mobility. For example, certain government policies may make it easier or more difficult for workers to move to a different area.

➡️ Implementing policies that focus on job creation, such as providing incentives for businesses to hire more workers, can be effective in reducing unemployment. These policies can also help to increase wages and improve job security.

➡️ Investing in education and training can help to increase the skills of the workforce, making them more attractive to employers and reducing unemployment.

➡️ Policies that focus on reducing inequality, such as increasing the minimum wage, can also help to reduce unemployment by increasing the purchasing power of low-income households, which can stimulate demand and create more jobs.

➡️ Money is a medium of exchange that is used to facilitate transactions between buyers and sellers. It is also a store of value, allowing people to save and invest for the future. Banks are financial institutions that provide services such as accepting deposits, making loans, and providing payment services.

➡️ Banks create money through the process of fractional reserve banking. This involves taking deposits from customers and then lending out a portion of those deposits to borrowers. The money created through this process is known as ➡️fractional reserve money➡️ and is an important source of money in the economy.

➡️ Banks also play an important role in the economy by providing liquidity to businesses and households. This allows them to access funds quickly and easily, which helps to facilitate economic activity. Banks also provide a safe place to store money and offer a variety of financial services, such as investment advice and insurance.

➡️ Money is a medium of exchange that is used to facilitate transactions between buyers and sellers. It is a store of value and a unit of account, meaning it can be used to measure the value of goods and services.
➡️ Money has three main functions: it serves as a medium of exchange, a unit of account, and a store of value. It is accepted as a medium of exchange because it is widely accepted and can be used to purchase goods and services. It is a unit of account because it is used to measure the value of goods and services. Finally, it is a store of value because it can be saved and used in the future to purchase goods and services.
➡️ Money has several characteristics, including portability, divisibility, durability, acceptability, and limited supply. It is portable because it can be easily transported and exchanged. It is divisible because it can be divided into smaller units. It is durable because it can withstand wear and tear. It is acceptable because it is widely accepted as a medium of exchange. Finally, it has a limited supply, meaning that its value is determined by the amount of money in circulation.

➡️ Money supply is the total amount of money available in an economy at a given time. It includes currency in circulation, deposits held in banks, and other liquid assets.

➡️ Money supply is an important economic indicator, as it affects the level of economic activity, inflation, and interest rates. An increase in money supply can lead to increased economic activity, while a decrease can lead to a slowdown in economic activity.

➡️ Central banks use monetary policy to control the money supply, by setting interest rates, buying and selling government bonds, and other measures. This helps to maintain economic stability and promote economic growth.

➡️ The quantity theory of money states that the money supply (M) multiplied by the velocity of money (V) is equal to the price level (P) multiplied by the total transactions (T).
➡️ This theory suggests that an increase in the money supply will lead to an increase in prices, and vice versa.
➡️ The quantity theory of money is used to explain the relationship between inflation and the money supply, and is used by central banks to set monetary policy.

➡️ Accepting deposits: Commercial banks accept deposits from customers in the form of current, savings, and fixed deposits. These deposits provide the banks with a source of funds which can be used to provide loans and other services.

➡️ Providing loans: Commercial banks provide loans to customers for various purposes such as purchasing a house, car, or other assets. They also provide short-term loans to businesses for working capital requirements.

➡️ Offering other services: Commercial banks offer a range of other services such as foreign exchange, wealth management, and insurance. They also provide services such as ATM, debit cards, and online banking.

➡️ Increased customer satisfaction due to improved access to banking services
➡️ Increased financial inclusion as more people are able to access banking services
➡️ Increased economic growth as more people are able to save and invest their money, leading to increased spending and investment in the economy.

➡️ Increased spending power of businesses and individuals
➡️ Increased investment in capital goods and services
➡️ Increased economic growth and employment opportunities

➡️ providing financial services such as payments, transfers, investments, and insurance
➡️ creating and managing financial products such as mutual funds, derivatives, and structured products
➡️ providing financial advice and services such as asset management, wealth management, and financial planning

➡️ Increased lending: A higher reserve ratio and capital ratio can lead to increased lending by banks. This is because banks have more money to lend out, which can lead to increased economic activity.
➡️ Reduced risk: A higher reserve ratio and capital ratio can also reduce the risk of banks taking on too much debt. This is because banks have more money to cover potential losses, which can help to protect the financial system from instability.
➡️ Increased confidence: A higher reserve ratio and capital ratio can also lead to increased confidence in the banking system. This is because banks have more money to cover potential losses, which can help to reassure customers that their deposits are safe.