Latest posts
-
Explain the impact, incidence and shifting of tax.
Impact of taxation: Taxation on goods, income or wealth influencing economic behavior and the distribution of resources. For example higher taxes on carbon emissions will increase cost for producers, reduce demand and shift demand towards alternatives. Higher income tax can enable redistributors of income within society but may have an impact on reducing the incentive…
-
Explain the merits and demerits of indirect tax.
Meaning: Indirect tax is a type of tax that is imposed on goods and services than on income or profits. The key characteristic of an indirect tax is that it is collected by an intermediary (such as a retailer or manufacturer) from the person who ultimately bears the cost, usually the consumer. The tax is…
-
ECONOMICS-6 MACRO ECONOMICS
IMPORTANT QUESTIONS; TEN MARKS QUESTIONS SIX MARKS QUESTIONS
-
Explain the merits and demerits of Direct tax.
Introduction: Taxes are compulsory payment to the government without expectation of definite return or benefits to the tax payer. According to Dalton, a tax is a compulsory contribution imposed by public authority irrespective of the exact amount of service rendered to the tax payer in return and not imposed as a penalty for any legal…
-
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…