ECONOMICS MAG (1)_merged

ECONOMICS, SOCIETY AND US 48

BEHAVIORAL ECONOMICS Behavioral economics is a relatively new field of economics that combines insights from psychology, judgment, decision making, and economics to generate a more accurate understanding of human behavior. Back in the 1990s, Richard Thaler, considered to be the father of behavioral economics, challenged the view that human behaviour can be easily explained by relying on an assumption alone - our preferences are well-defined, rational and stable throughout. He did so by jotting down and pointing out the anomalies and uniqueness in people’s behaviour which cannot be simply explained and justified by predominant economic theories. The inability of the standard economic theory to explain the psychology behind human economic behaviour and decisions led to the establishment and significant propagation of behavioral economics. In 2017, economist Richard Thaler was awarded the Nobel Memorial Prize in Economics Sciences for his contributions to behavioral economics and his promising work in establishing that people are predictably irrational in ways that defy economic theory. The rising significance of behavioral economics is completely justified, given the wide range of applications it has. Human decision-making is a true gift of behavioral economics. 49

Alternative behavioral models of individual choice have helped us to understand the functioning of economic institutions. On the normative side, behavioral modeling can help us to design better institutions keeping in mind individual needs and the concept of welfare. Practicing behavioral economics requires one to modify, not abandon, the key methodological principles of modern economics. Behavioral economics also has its applications in the indispensable field of law. Using the vehicle of “debiasing through law,” behavioral law and economics may open up a new space for legal interventions that recognize human limitations and attempt to steer individuals away from mistakes without taking the steering wheel from the individual’s own hands. The health sector is also full of institutions and decision-making circumstances that involve friction in markets and cognitive errors by decision makers. Stress of decision-making, anxiety, professionalism, insurance coverage, and lack of information make decision- making in health-related questions particularly relevant for behavioral analysis. Behavioral economics shall soon be changing the approach which people have always had towards economic development and the application of economics as typically limited sometimes. It is indeed an exciting endeavour and will establish itself as truly significant in the near future. -Suhani Vats 11U 50

NEUROECONOMICS We are constantly making financial decisions ranging from small and mundane to life-changing. These everyday decisions multiplied by billions of people form the basis of the worldwide economy. Neuroecomics is the study of how organisms make value-based decisions and how these decisions are expressed neurally. The main goal of neuroeconomics is to understand the brain mechanisms that are responsible for making these evaluative processes. Paul W.Glimcher is an American neuroeconomist, neuroscientist, psychologist, economist, scholar, and entrepreneur. He is known for his central role in founding and developing the field of neuroeconomics which takes an interdisciplinary approach to understanding how humans make decisions. Scott Huettel, a professor of psychology and neuroscience at Duke University says Neuroeconomics studies t​hose situations where choices are clear-cut or rational, and involve unacknowledged factors and risk - something economics has had a hard time explaining. So then the question arises, how does the brain actually work in decision-making ? To learn more about these decisions scientists measure brain activity as people complete economic tasks. 51

For example, running brain scans as people play a simple double-or-nothing game. When a player decides to risk it all to double their winnings, activity increases in a part of the brain called the insular cortex. Scientists hypothesize that the networks of the insular cortex interact with other brain areas, including parts of the limbic system that functions in learning, memory and emotion, to help the player picture the negative and positive aspects of taking such a risk. On days when male traders had higher testosterone levels than average, they took larger risks. Isn’t it fascinating? With millions of dollars on the line, hormones could be making the difference between a good day at the market and a very bad one. For advertisers, it’s advantageous to use measurable brain reactions to craft effective messaging - a discipline known as \"neuromarketing”. Some firms are now using brain imaging technologies like MRI and EEG to measure how the brains of prospective buyers respond to advertisements in real-time. These advertisers monitor our physiological reactions like - pupil dilation, eye movements, skin conduction, and other involuntary bodily reactions to their advertisements. Even though Neuroeconomics is a new invention, it still has undiscovered sides which may help us understand how the brain works while making an economic decision and who knows the research may help us discover something new about the brain which we probably never noticed before. -Saanvi Pandey 10G 52

ECONOMICS MEETS PYSCHOLOGY “Rational agents”, “utility maximization”, “profit-seeking behavior” - these are terms that all of us, as students of economics, probably hear on a daily basis. Classical economics is premised upon the basic assumption that all agents in an economy are perfectly rational, i.e. their primary motive is to maximize their utility (the total satisfaction derived from the consumption of a commodity) and expand their profits. The individual, in classical economic terms, has “perfect” information about the market and acts independently to make a choice that is most rewarding for him/her. That might seem as easy as the alphabet. But, here’s a secret: it’s not. Realistically speaking, individuals - like you and myself - are not always perfectly rational. We may, sometimes, act intuitively and impulsively instead of planning our steps using reason and logic. Humans are likely to be short-sighted, selfish, and unreasonable while making decisions. This forms the foundation of a rather recent field of mainstream economics, that takes a more realistic view of human decision-making by studying the various biases and tendencies that influence people’s cognition, known as behavioral economics. 53

Contrary to classical economics, behavioral economics deals with the deviations from the model of homo economicus or the rational man and “explains human behavior through the lens of social preferences, heuristics, and norms”. The assumptions and findings of behavioral economics do not, in any way, negate those of classical economics but only add a layer of complexity to them. The central concept of behavioral economics is bounded rationality. This term, coined by Nobel Memorial Prize recipient Herbert Spencer who proposed the idea that humans have limited information-processing capabilities, is simply a reiteration of the idea that humans are not rational and there may be certain biases at play when they make decisions. Traditional economics makes three key unrealistic assumptions about human behavior: they have unbounded rationality, unbounded willpower, and unbounded selfishness. However, behavioral economics debunks all three of them. The findings from a study conducted by Colin Camerer and other researchers on taxi drivers in New York City, in the mid-1990s, provide an accurate example of suboptimal/irrational behavior in economic decision making. These drivers paid a fixed amount to rent their cabs for twelve hours and kept all revenue to themselves. The ideal (profit-maximizing) strategy would be to work overtime on ‘good’ days (rainy days or days with a festival in town) and quit early on ‘bad’ days. However, the researchers assumed that if they set earning targets for each day and considered any shortfalls relative to that target as a loss, they 54

would likely quit early on good days and work longer on bad days. Unsurprisingly, that is exactly what happened. Willpower relates to self-control which is our ability to delay gratification and resist impulses to avail immediate rewards. We surely do not have unbounded willpower, as we often find ourselves in a situation where we have spent, eaten, drunk, smoked, or exercised too much. It is a natural human tendency to lack self-control. Lastly, people are not selfish as classical economic theory assumes. Even though we may sometimes act to serve our own interests, we do tend to act selflessly. Each one of us is concerned, to differing degrees, about the well-being of others. According to the India Giving report 2019, released by Charities Aid Foundation, nearly three-quarters of India’s adult population donated money to a good cause (donating to a charity, religious organization, or sponsoring someone). Another key concept of behavioral economics is the ‘nudge’ or Nudge Theory. Nudge literally means a light push or touch. In economic terms, it refers to indirect suggestions or clues given to people who influence their decision-making without them even realizing. The best example of this would be that of a school canteen. To discourage the consumption of unhealthy snacks such as chips, candy bars, or canned beverages, the authorities could place healthy alternatives such as dried fruits and yogurts on shelves at eye level. 55

The students would naturally reach out for the healthy snacks, without them even realizing the gradual shift in their decision- making behavior. Various other principles influence our decision-making such as framing, availability heuristic, loss aversion, present bias, etc. It can also be applied to many fields such as finance, marketing, political science (the best example being the Brexit referendum), international relations, etc. Thus, behavioral economics can help us better understand the nature of human decision-making and its implications on economics as it focuses on its psychological, social, and emotional aspects. - Ishaan Singh Sarna 12K 56

Painting by Yashvi Kumar 12M 57

FRESH PERSPECTIVE 58

TRUST AND THE ECONOMY What is trust really? Is it the reliability of a person, if so then how do we determine if a person is reliable? Is it because we’ve seen their reliability first hand or does some form of identity like race, ethnicity, gender or religion come into play. Trust is a concept most people overlook yet it is the glue that holds the fabrics of our society together. Without trust between the people of a country, civil unrest develops quicker than a speeding bullet. Without trust investors won't support entrepreneurial projects nor would we really have any sort of peace in our lives. The modern society we live in is more conflict-free and people are a lot more trustworthy. Now some of you might think otherwise, but research conducted by David B. Huffman between city- dwelling people and hunter-gatherer communities confirmed that city dwellers are more trustful of each other. Shocking right? Well, the main reason why this phenomenon occurs is that city dwellers had to evolve their sense of trust from small communities like tribes to live in huge populations and soon went through a virtuous cycle of increasing trust. This evolution of trust explains a lot about how our identities developed. For example- It's quite likely that when you travel outside, you feel a lot more comfortable with people from your country or much better if they were from your state. 59

But why is that so? What's the difference? They are strangers after all. This is where identity comes into play. The identity of belonging to a country, of having certain beliefs, studying in the same school, supporting a football team or listening to a certain musical artist. Trust and self identity also play a huge role in our economic system. Currency is one such example. The reason why you can pay the Indian rupee to a grocer to buy your favourite snack is not because that paper has va lue, but because we trust our central bank in maintaining the certain value of our currency in comparison to the world. It's easy to be pessimistic about trust in our society nowadays. After all, there are so many civil wars going on, governments are fudging statistics related to the economy, not many seem to care about the impact of environmental damage we have caused and people are becoming more disconnected due to social networking sites. But the truth is that this pessimism has been pertinent in our civilized society for thousands of years. Can you believe that most economists in the eighteenth century stated that the world’s population was growing out of control and civilizations would soon fall to famine. Yet, here we are, living on earth with a population of 8 billion people, you reading this article and hopefully sitting somewhere comfortable. Negativity has always been given more importance in our society, for once let's look at the bright side and increase the trust between us. - Amal Tharikh 12M 60

SHRINKFLATION Major crimes such as Murders, Rapes, Kidnapping, etc have the world caught in its grips and are at the center of attention for years. Amidst these major blunders lies a petty lie that affects the economy drastically. This lie, or crime if I may, is called “Shirnkflation”. There have been reports that the manufacturers of household items such as biscuits, jam, chips, chocolate and confectionery have been reducing the size of their products without making corresponding cuts in their prices. Downsizing( shrinkflation) is really a sneaky price increase. If consumers were the rational creatures depicted in classic economic theory, they would notice shrinkflation. However, Consumers tend to be price-sensitive and not net-weight conscious. They can tell instantly if they're used to paying 30 bucks for a pack of orange juice and that goes up to 35 bucks. But if the orange juice container goes from 200 ml to 180ml, they're probably not going to notice.\" Habits make us believe we are purchasing the same thing as we zoom in on the one constant that motivates our behavior when shopping and that is Price. This is how food companies have found a way to defend margins, largely without upsetting anyone. They claim that they are not misleading the public as weight and volume information can easily be found on any labeled package. 61

Increasing costs of production leave manufacturers with 3 choices: Raise the price, reduce the quantities, or change the ingredients. Hiking prices can be challenging due to the increase in competition in the food industry. Changing ingredients can be risky. Some food manufacturers have paid the ultimate price for changing the taste of certain products just to save a few pennies. “Maggi” is a classic example of a misfire. And today, with social media ruling our lives, companies are one poor decision away from seeing an entire product line vanish. The only viable option is to downsize. With the arrival of many non-food investment firms, modifying ingredients and changing a package is almost second nature. Whether or not we want to admit it, as food consumers, we value quantities for the lowest price. It’s challenging to get out of this way of thinking. But there could be an opportunity for manufacturers looking at increased costs. Instead of downsizing products and hoping no one notices, emphasizing its superior taste and original package size could become a selling point. 62

Shrinkflation is ultimately all about manipulation. Not just in the food industry, manufacturers across all walks of life are manipulating the needs and desires of consumers. The fact that prices and money can be so easily and legally manipulated suggests that savers need to not be totally reliant on the government to protect their savings and lifestyle. If Shrinkflation keeps up, maybe someday we'll all be living in a Lilliputian dystopia where we're forced to eat miniature candy bars and drink from tiny juice packs. Or maybe consumers will start to notice and voice concern and the power of consumer demand will force companies to listen and right-size their products. Until then, my advice to the consumer is to read the fine print. Spend a minute extra in the supermarket but be informed of what you consume. - Kairav Khurana 12S 63

ECONOMICS AND CRICKET Economics is one of the most versatile subjects having a great applicability in the modern world. It determines how things happen around us. From wars to cricket to how we divide our limited time between studies and leisure, economics is the driving force behind all. Even the polity and society revolve around the economy of a country. Cricket is one of the most popular sports in the world having a number of economic benefits. A cricket match generates revenue through the sale of parking and match tickets, tourism, sale of various products during the match, sports equipment bought for the players etc. It also creates a number of employment opportunities for the players, stadium staff, umpires, commentators etc. In India, Cricket accounts for 85% of the sports economy. The BCCI earns a large sum as revenue( Rs. 4000 Cr) from IPL. The IPL, itself, has a whopping brand value of $4.4 Billion. This article presents an insight into the three major economic applications in the field of cricket. Law of diminishing marginal utility states that as a consumer goes on consuming more and more units of a commodity, the utility that he derives from each unit goes on decreasing and when the number of units of a good decreases, the utility derived from it increases. 64

In cricket, as the batting team proceeds in the match, the marginal utility of balls increases as the number of remaining balls decreases. Each ball becomes more valuable to the team as they have a lesser number of balls to score runs. Similarly, for wickets, as the wickets fall, the utility of the remaining wickets increases. It becomes even more crucial for the batting team to save their wickets as otherwise they will eventually run out of players and lose the match. On the other hand, the number of runs scored present an exception to this law, as more runs imply more utility for the batting team. Monopsony, as defined by Oxford Dictionary, is a market situation when there is only one buyer. In case of Indian Cricket, the buyer is BCCI. A cricketer can’t get to the highest level unless he is selected by the BCCI in the National team. So, the situation is such that if you get selected by the BCCI , you get a once in a lifetime opportunity but if you don’t, you just languish in the shadows. Indian Premier league is there and one might make a mark in it but it definitely isn’t the highest level. On the other hand, Tennis is an individual sport and a tennis player is not selected by anyone. His success or failure solely depends on his ability and not on the whims of a board. Opportunity cost, according to Investopedia, is the cost of an alternative that must be foregone in order to pursue a certain action. Cricket also follows the law of opportunity cost. In cricket, the trade off is between time and resources i.e. players. 65

For example, if in a test match, a team has 2 days to score a total of 300 runs and on the first day itself, the team scores 150 runs for 7 wickets. In this case, the team should be more worried about running out of players than of time. In contrast, in T20 if a team needs 20 runs in 3 overs with 7 wickets left , then the priority should be time over players. Hence, every point in a cricket match requires careful consolidation wherein the team captain and coach weigh the opportunity cost of time and players with respect to each other. Thus, we find that economics and cricket are interrelated. On one hand, economic logic is there in the game of bat and ball and on the other hand, cricket has contributed significantly towards the development of the sports industry and hence, in the economic growth of the country. - Shagun Shrivastava 12N 66

THE ECONOMICS OF CHARLIE AND THE CHOCOLATE FACTORY Charlie and the Chocolate Factory is a visual representation of every chocolate lover's dream. It brings back a nostalgic feeling from the back of our brains. As much as we enjoy watching it, much to our surprise, there’s a lot that we can learn from it. Here are a few concepts taken out from the depth of the chocolate river: SCARCITY The first concept is limited resources and unlimited human wants or needs. This is depicted in the book as the golden ticket. There were only 5 lucky children who could get a golden ticket. But how many children wanted it? Millions of them, therefore proving the scarcity of golden tickets. SUPPLY AND DEMANDS Willy Wonka’s chocolate bars were available in almost every shop. This gives us the idea that the supply of the chocolate bars was quite effective. When we talk about Demand, we are not disappointed. 67

Almost every kid in the town wanted a willy Wonka chocolate bar in hopes of getting the golden ticket. The golden tickets were a great form of advertising the factory. So if the demand for the product is so high, it's quite obvious that the supply will have to meet it. LIVING STANDARDS Charlie Bucket lived in the outskirts of his town in Munich. Charlie’s family was not very well to do one. Mr. and Mrs. Bucket struggled to take upon the bare necessities of their son and their old parents. Alongside, there were a lot of rich people, like Veruca Salt and her parents who exploited others. This differing comparison brings us to a conclusion that there was an unhealthy distribution of wealth which caused the rich to get richer and the poor to deteriorate even more. -Aashna Suman 10E 68

GENDER AND INCOME INEQUALITY “It is time that we all see gender as a spectrum instead of two sets of opposing ideals.” Gender equality has come to be viewed as a Utopia now, and rightly so; considering the fact it is still a pipe dream. Women have been facing wide disparities when it comes to the wages they are paid in their workplaces. India ranked 108 in World Economic Forum's (WEF) gender gap index in 2018, which is the same rank it held in 2017. Apart from the gender pay gap, India is also facing a huge pay disparity among the categories of organized and unorganized sectors, rural and urban areas, and regular and casual workers. The Constitution of India clearly discourages this ever- widening gender wage gap through its various provisions. As per Article 16, all citizens have a right to equality of opportunity in matters of public employment or appointment to any office under the state. Article 38(2) strives to reduce inequalities in income among individuals and Article 39 promises equal pay for equal work for both men and women. However, this is what the Constitution guarantees and strives to achieve. 69

The Supreme Court of India has upheld the constitutional validity of the principle of equal pay for equal work. In another landmark case, the Supreme Court held that men and women employees should be paid equally for the same work. Recently, the Code on Wages, 2019 of India (Code on Wages) has been notified and it received the Presidential assent on August 8, 2019. The Code of Wages consolidates four national-level labor laws on wages, being the ERA, Minimum Wages Act, 1948, Payment of Wages Act, 1936, and Payment of Bonus Act, 1965. The first set of provisions of the Code of Wages relates to anti- discrimination, prohibiting discrimination against employees on the ground of gender in matters relating to the payment of wages, covering the LGBTQ+ community as well. The Code of Wages also prohibits discrimination while recruiting any employee and in the conditions of employment, except in cases where employment of women in such work is prohibited or restricted under any law. Although India has come a long way to establish itself as a developing country, while also addressing the issues of gender equity and gender wage gap; thinking that enough has been done is jeopardizing its dream of being a Superpower someday. The measure of a country’s development and growth is not only its GDP but also its wages and its equitable distribution. 70

The government needs to promote and assert the significance of the principle of equal wages, starting with itself! India will soon be celebrating 75 glorious years of its independence. The government should focus on formulating and implementing more policies to reduce the wide gender gap prevailing in India. This will help not only in ensuring equal opportunities for all but also set up India as a liberal country, ready to address the global challenges and triumph over them. - Suhaani Vats 11U 71

No country can ever truly flourish if it stifles the potential of its women and deprives itself of the contribution of half its citizens. -Michelle Obama 72

BALDING ECONOMICS Economics is a subject Looking on aspects It talks with numbers Grounds on which few encumber Going down with statistics You don’t need to be aesthetic When numbers lie Economists often justify Politics often hails economics Which ruins the life of students studying psychometrics Sen, Talib, Kahenman go along with the truth I give no blame, It feels lame Keeping in mind real ruth Maybe I think too much This world stands on a crutch Going beyond its miles A white paper among piles. Trials are head With fat styles Balding indeed came after the turnstiles. - Ananya Deep Singh 10L 73

THE LARGEST PONZI SCHEME Ponzi schemes are devious and can remain hidden from the general public. This strategy is used to illegally extract money from the people and was first performed by a man named Charles Ponzi. The definition of a Ponzi scheme is: It is a type of pyramid scheme in which the operator, at the pyramid’s top, acquires a small group of investors that is initially provided with tremendous investment returns via funds secured from the second group of investors. In simple words, it means to take money from one party and distribute it as profits to the other. This illegal act can continue until money keeps on coming from new investors and goes to the existing investors. One such Ponzi scheme was made by Mr. Bernie Madoff. It is the largest Ponzi scheme to ever get exposed. The amount of the fraud was a whopping $64.8 billion. Madoff was a very renowned person on wall street and the whole world. He was once the chairman of NASDAQ (It is a stock exchange in New York city which trades giant tech companies like Amazon, Apple, etc.). In 1960 Madoff founded a penny stock brokerage firm which eventually grew into Bernard L. Madoff Investment securities. His firm was one of the greatest and managed about $ 65 billion at its peak. 74

The scam was uncovered on December 10, 2008, when his two sons Mark and Andrew Madoff told the authorities that their father had confessed to them that he was running a Ponzi scheme under the hood of his AMC (Asset management company). The following day the FBI (Federal Bureau of Investigation) and SEC (Securities Exchange Commission) started investigating the case and later found Bernie Madoff guilty of securities fraud and sentenced him to jail for 150 years. He intelligently planned the whole scam and ran it for over 20 years. His bad days arrived in 2008 due to the global recession caused by the crash of the housing market in the USA. The house of cards made by Madoff started falling down when the investors started asking for money after the recession. The amount asked for by the investors was about $ 7 billion. Madoff said that he did not have that kind of money and had only a couple of hundred million dollars left with him. Many famous people also invested in this scam and have lost a lot of money. The scam started because Madoff could not offer the returns he promised to his investors and started to transfer money from new investors to his own bank account and then give some part of it as returns to his old investors. In the end, Madoff was sent to jail for 150 years and the state government paid out more than $ 700 million to the defrauded investors; but the fact remains that billions were lost and those billions have still not been recovered. - Ajitansh Kar 09G 75

It is easier to fool people than to convince them that they have been fooled - Mark Twain 76

ECONOMIC VALUE OF A HOUSEWIFE'S WORK ​All around the world, women spend excessive time on unpaid homework - ranging from a maximum of 400 minutes per day in Iraq to 200 minutes per day in Taiwan, according to the International Labour Organisation. On average, men spent 83 minutes in unpaid care and homework while women spent three times more at 265 minutes. Keeping the above in mind, a very fundamental and a very basic question originates “should housewives be paid wages for doing largely thankless household work? “ India's 160 million homemakers clean, tidy, cook, wash up and manage the family budget. They fetch food, water, and firewood, and give care to children and their in-laws without complaining a mite. Therefore, the answer is a clear and obvious YES. One way to eliminate gender equality is to calculate The economic value of the work being done by a housewife. This can be done by first of all by listing all the tasks being done and then calculating the value that one would have to pay if the same work done by her is given to somebody hired. 77

For example, when she teaches her children she should be paid the same amount that is to be given to a tutor or a teacher with the same knowledge and has the same amount of patience when teaching her kids. Let's start a significant change. TIME TO THINK Doing the dishes, vacuum cleaning, washing the clothes, All day she is engaged in scrubbing the floors. She likes her house neat and tidy, works all day long even when she has no inclination, She makes her home well-ordered even if it is the messiest in the nation, There is neither smiles nor money for her, It's time to empower and start a big change together! - Sheen Madan 10G 78

ROLE OF STATISTICS Statistics is relatively a very important subject and the proper knowledge of statistics is very helpful to understand the difficulties of every aspect of life and it provides us with solutions to deal with them. Statistics is defined as the collection, organization, presentation, analysis, and interpretation of numerical data. It provides us with the map for tackling the problems related to understanding complex data. The first step towards this is the collection of data, the technique depends on the objective of the study. The second step is the organization of the data in a proper form which involves editing and classification. After classification, the third step is the presentation of data in a suitable manner in the form of a diagram, table, text, or graph. The fourth step is the analysis, with the help of simple mathematical techniques. These include majors of central tendency, measures of dispersion, correlation, regression, etc. The fifth step involves the interpretation of data, it is the last step of statistical methodology; it involves statistical thinking, skills, and experience in order to derive meaning from the analyzed data. The interpretation provides the final conclusion drawn from the data. 79

How do statistics work? It converts the complex data into simplified representations such as graphs, tables, diagrams, etc. and the data becomes easier for the average civilian to interpret, making a comparison of facts easier and facilitating planning and policy formulation. It helps in forecasting and enlarging individual knowledge and experience. There are a lot of mathematical calculations which make it easier for us to understand the raw data, such as mean, median, mode, standard deviation, coefficient of variation, etc. Statistics is important in various fields, such as government planning and businesses. The government collects taxes to run various operations such as defense, healthcare, civil well being, education, and transport to make sure that the government is not overspending, Statistics plays a huge role in helping determine the actual cost of these operations, labor required, and estimated time consumption, while statistical data and methods play a vital role in understanding and solving economic problems such as poverty, unemployment, disparities in the distribution of income, wealth and other resources. It gives us a good comparison of various markets as well. In businesses, statistics help the businessman to discover the minimal running cost of various operations such as manufacturing, labor wages, adequate profits, market competitors, and gives an overall progress report to the businessman. It gives us a good comparison of various markets as well. 80

However there are limitations to this practice as well it does not study the qualitative phenomenon, it does not deal with individuals, the results are true only on average and can be misused. Statistic laws are not precise and only experts can make the best possible use of statistics. The distrust of statistics means a lack of confidence in Statistical Methods and Statements, and in spite of the services provided by statistics, considerable distrust exists in the minds of the people with regard to its reliability and usefulness. I would like to conclude by saying that Statistics is a very helpful and essential practice. - Krishnna Nayyarr 12S 81

THE ECONOMICS OF HAPPINESS Is happiness a state of mind or that of economic status? Renowned Economist Alfred Marshall defined economics as the study of mankind in the ordinary business of life. It is the science that studies human behavior as a relationship between ends and scarce means which have alternative uses. However, recent human developments have established economic status in proportion to the happiness of an individual. We, as human beings have often found ourselves in a state of predicament, often confronted with the question, \"Does money buy happiness?\". However, the question which we should be asking ourselves is remarkably different, if happiness is a state of mind or that of economic status. Measuring happiness is very subjective as well as very personal. Each individual has his own definition of happiness and its determinant factors. However, some common determinants might include “being successful”, “being rich”, “being well-settled” and “ability to afford luxuries”. In order to understand this very complex economics of happiness, it’s important to explore these determinants and their broader perspective. 82

First and foremost, being successful and well-settled are some things that everyone in the world is after. They are also very subjective issues. However, most people have come to relate success with money, having a job, and economic stability. They might not be wrong in doing so, but their opinion is somewhat flawed. This definition of success and being well-settled is not very substantial. This only clenches the materialistic view of happiness. Being rich and the ability to afford luxuries are closely intertwined together. When we refer to the word rich, we need to ask ourselves if money can buy happiness. Money can only buy goods and services. What needs to be understood is that the purchased goods and services or luxuries are no measure or means of happiness. Economics is undoubtedly concerned with the monetary aspects of life and the economy of a country. But this does not stand true for human happiness and contentment to be dependent and concerned only with monetary aspects. Money or wealth is an integral part of a human being’s life, but not the sole one. Human happiness is dependent upon various factors, and money happens to be one of them. Money, indeed, has several uses in many domains of life. It could be used to satiate all human wants, however, it can only ensure the availability of goods and services and not guarantee human satisfaction, which is an indelible determinant of happiness. 83

Happiness prevails not only in economically flourishing households or countries but also in those who are able to live full- heartedly, facing the trials and tribulations of life and overcoming them. One must accept and acknowledge the uncertainty of life. A human being and his prominence are truly immense. The value of a human being stands much superior to that of money because only a human being can be a source of money, but not vice-versa. - Suhani Vats 11U 84

Painting by Yashvi Kumar 12M 85

FUN SEGMENT 86

QUIZ BRANCHES OF ECONOMICS Economics is a dynamic social science with various branches. These branches spur and foster distinguished economical frameworks and focus on different aspects of economics. Take this exciting quiz to test your knowledge about the several branches of Economics! Q1. Branch of economics concerned with individual markets and small aspects of the economy. A. Microeconomics B. Normative economics C. Neo-classical economics Q2. Branch of economics developed in the 1930s against the backdrop of the Great Economic Depression. A. Classical economics B. Marxist economics C. Keynesian economics Q3. Branch of economics based on the operation of free markets. A. Macroeconomics B. Classical economics C. Econometrics 87

Q4. Branch of economics emphasizing the unequal and unstable nature of capitalism. A. Normative economics B. Marxist economics C. Neo-classical economics Q5. Branch of economics using statistical methods, regression models and data to predict the outcome of economic policies. A. Econometrics B. Neo-classical economics C. Positive economics Q6. Branch of economics placing greater emphasis on the environment. A. Monetarist economics B. Neo-liberalism economics C. Welfare economics Q7. Branch of economics concerned with both micro and macro aspects of economic development. A. Behavioral economics B. Development economics C. Environmental economics Q8. Branch of economics, concentrating on wages, labor employment and labor markets. A. Labor economics B. Distributism C. Mercantilism 88

Q9. Branch of economics emphasizing on the psychology behind economic decision making and economic activity. A. Macroeconomics B. Behavioral economics C. Monetarism Q10. Branch of economics concerned with the whole aggregate economy. A. Macroeconomics B. Labor economics C. Classical economics ANSWERS 1- A 2- C 3- B 4- B 5- A 6- C 7- B 8- A 9- B 10- A - Suhani Vats 11U 89

THE LOST ECONOMIST Mifflin corporate (a fictional office) gave the wrong address to a very important client- a Nobel laureate in economics. Help the Mifflin search team find the economist using the following clues: leading U.S. advocate of monetarism oversaw the economic transition in Chile Co-author of Monetary Trends of the United States and the United Kingdom (1981) Received the Nobel Prize in 1976. 90

91

92

ANSWER 93

EXPORT HUB Export Hub focuses on exports to develop markets via retail networks and distributors. It is all about finding and connecting exporters with potential buyers in order to form profitable and long-term business relationships between them. The aim to make India an export hub is now gaining utmost attention with the changing global trade scenario and the Covid-19 pandemic. The District Export Hubs initiative is a key component of the country's current Foreign Trade Policy, which targets to mobilize the potential of each district of the country to help them emerge as export hubs. This logo has been designed to capture the above aspects of the export hub, the detailed description for each component is given below. 94

This symbol represents one of the modes of shipping/exporting goods i.e., air. This has been designed to represent “Garuda” which is a bird creature from Hindu mythology and is the vehicle (vahana) of Vishnu. The rupee symbol has been used as the face of Garuda representing the evolvement of investment, and economic growth through export hubs. This symbol shows Golden (Sone ki Chidya) India on the world map, with a network of export hubs prevalent in India and the various districts expanding as stronger hubs of export. Through this symbol it is seen that India is actively exporting its good to the other countries of the world, resulting in export promotion, manufacturing, and employment generation through export growth from the Districts. This symbol represents the second mode of shipping/exporting goods i.e., land/road. This is through roadways, which open up areas and makes a crucial contribution to economic development and growth, and brings important social benefits. This symbol represents the third mode of shipping/exporting goods i.e., Varuna, the god of oceans.This symbol shows water playing a significant and critical role in carrying out the procedure of exports. - Mannat Kaur 09A 95

96

TEST YOURSELF Update your fact treasury 1. Which state contributes the most to the GDP of India a. Haryana. b. Bangalore c. Uttar Pradesh d. Maharashtra 2. India ranked 63rd in the World Bank’s Ease of Doing Business ranking released on October 24, 2019. Which of the following criteria scored the lowest a. Starting a business, dealing with construction permits b. Registering property, enforcing contracts, resolving insolvency c. Paying taxes, protecting minority investors, getting credit d. Getting electricity, trading across the border 3. Which of the following statements is/are correct about the Wholesale Price Index? a. Wholesale Price Index (WPI) represents the price of goods at a wholesale stage. b. India uses the Wholesale Price Index (WPI) whereas the United States uses the Producer Price Index (PPI) to measure inflation. c. Indian WPI is published by the Economic Advisor, Ministry of Commerce and Industry. d. All of the above 97