Latest posts
-
What is production? explain its types.
Meaning: Production involves the use of various inputs or factors services to produce output. In economics production means transformation of inputs into outputs, in other words production is a process of changing the form of inputs or adding utility to the goods. There are many types of production. Production refers to the process of creating…
-
Explain the Keynes savings and investment theory.
Introduction: Saving function is the counter part of consumption function because S=Y-C. Therefore S=f(Y). Saving means economic surplus, it may be defined as the difference between current income and current consumption. Keynes defined savings as an excess of income over expenditure of consumption. The Theory of savings and investment is like this. Theory: In case…
-
Explain the liquidity preference theory of interest?
Introduction: J.M Keynes created the theory of liquidity preference theory of interest to explain the role of the interest rate by supply and demand for money in 1936. According to Keynes the rate of interest is a purely monetary aspect. It is the reward for parting with liquidity for a specific period of time ,…
-
Explain Keynesian psychological law of consumption.
Introduction: The Keynesian concept of consumption function stems from the fundamental psychological law of consumption which states that there is a common tendency for people to spend more on consumption when income increases but not to the same extent as the rise in income because a part of the income is also saved thus community…
-
Explain the classical theory of employment.
Introduction: The classical economist believed in the existence of full employment in the economy. To them full employment was a normal situation and any deviation from this regard as something abnormal. According to Pigou the propensity of the economic system is to provide full employment in the labor market when the demand and supply of…
-
Explain the importance of estimation of national income.
Introduction: The estimation of national income refers to the process of calculating the total economic output of a country over a specific period, usually a year. National income is a key indicator of a country’s economic performance and is typically measured using three main approaches: the Production (or Output) Approach, the Income Approach, and the…
-
Explain the precautions in the estimation of national income.
INTRODUCTION: The estimation of national income refers to the process of calculating the total economic output of a country over a specific period, usually a year. National income is a key indicator of a country’s economic performance and is typically measured using three main approaches: the Production (or Output) Approach, the Income Approach, and the…
-
What is Macro economics? explain the merits and demerits.
Meaning: Macro economics is that branch of economics which deals with the study of aggregate or average behavior of the entire economy. In it we study the collective functioning of the entire economy. It deals with the aggregate of the economic system rather than with the individual parts of it. Hence it is called as…
-
Explain the Subsistence theory of wages.
Introduction: The subsistence theory of wages originated by the French economist in the 18th century and was developed by Adam Smith. It received the support of British classical economics like Ricardo and Malthus. The German economist Lassalle called it the Iron law of wages, the brazen law of wages. Karl marks made it the basis…
-
Write a note on Risk bearing theory and Uncertainty theory of profit?
Risk bearing theory of profit: This Theory of risk bearing was put forwarded by American economist professor Bernard Hawley in 1907 according to him profit is the reward for risk bearing. The theory explains like this. Theory: In modern world, production is carried on in anticipation of demand the producer produces good for the future…