Economics is the study of how businesses and countries operate and react to situations. There are numerous
basic economic concepts that is important
for a banker. This important things are given below
Supply and Demand
This is the cornerstone of studying economics and is an easy way to work out the trade-offs between production of an item and its cost. If demand for a product or service is high, then the supply of a product or service is high and vice versa.
Economies of Scale
Economies of scale are a business term used to demonstrate the cheapest way of producing
something.
Microeconomics
Microeconomics is the study of how individuals and specific industries react to economic
conditions.
Macroeconomics
Macroeconomics is the study of the economic system as a whole.
Inflation
The amount the price of a product goes up each year. Most governments try to keep inflation
at around the two percent mark. This means the price of a product will go up two percent every year.
Interest Rates
Interest rates are normally set either by the government or by a national
bank and are the amount of extra money in percentage terms people give back on loans or receive for saving money. It is one of the few economic tools that a government can use to move the economy.
Price Index
There are two main types of price index, the retail and the consumer. These both show how much the average basket of goods costs a consumer.
Economic Growth
This is the statistic most thrown around on the news, as it is
the
simplest idea to get your head around. Growth or Gross Domestic Product
(GDP) is a measure of how much money is spent in the country