TN State Board 12th Economics Question Paper 2026

J.M. Keynes is regarded as the ‘Father of Modern Macro Economics’ because he developed the modern theory of income, output, employment, and aggregate demand. Ragnar Frisch was a pioneer in econometrics, Adam Smith is the Father of Economics, and Karl Marx is associated with socialist economic thought.

Income is a flow variable because it is measured over a period of time, such as per month or per year. Money supply, foreign exchange reserves, and assets are stock variables because they are measured at a point of time.

NNP stands for Net National Product. It is obtained by deducting depreciation from Gross National Product.

The sum of Marginal Propensity to Consume (MPC) and Marginal Propensity to Save (MPS) is always 1, because every additional unit of income is either consumed or saved.

Keynes’ theory emphasized short-run equilibrium. He analyzed how national income, output, and employment are determined in the short period, especially during unemployment and underemployment.