EconomicTerminology

Economics
Economics can be defined as the science that studies human behavior as a relationship between ends and scarce means, which have alternative uses.
Lionel Robbins

An Economy is usually analyzed by the use of Microeconomics or Macroeconomics

Microeconomics - where the unit of analysis is the individual agent, such as a household, firm or government department.

Macroeconomics examines an economy as a whole with a view to understanding the interaction between economic aggregates such as national income, employment and inflation. It also studies effects of Monetary Policy and Fiscal Policy.

Market
The existence of markets is one of the key components of capitalism.
A market is a social arrangement that allows buyers and sellers to discover information and carry out a voluntary exchange.
The information function of a market requires that the buyer and seller are both aware of what is being sold. It is assumed that such knowledge is perfect, including knowledge of alternatives and other factors affecting the proposed sale/purchase.

GDP
GDP is the total measure of the flow of goods and services at market value resulting from current production during a year in a country, excluding net income from abroad.
It is a measure of economic activity in a country
GDP = private consumption + investment + public spending + the change in inventories + (exports - imports).

GNP
Gross National Product (GNP) = GDP + income earned by domestic residents from their investments abroad - income paid from the country to investors abroad.

NNP
Net National Product (NNP) = GNP – Depreciation

Money
Money can be defined as a legal tender that gives the possessor liquidity in hand. It fulfills three functions – each of them providing a criterion of moneyness –
* a unit of account
* a medium of exchange, and
* a store of value.