Definition – A Commercial banking company means any company which transacts the business of banking. Banking means accepting for the purpose of lending of investment … Read more
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There are three methods of computing national income or Measuring National income 1. Value-Added or Inventory or Census or the Product Method, which is the … Read more
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The impact of tax refers to the initial stage of the tax burden. The person on whom the tax is first imposed bears the initial … Read more
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Fiscal Policy is the process of shaping taxation and public expenditure to help dampen the swings of the business cycle and contribute to the maintenance … Read more
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Definition – Supply of Money is the total stock of domestic means of payment owned by the public (private individuals and business firms) in a … Read more
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The Goods Market and the IS-LM Model The goods market is in equilibrium when the output or income is equal to the aggregate demand in … Read more
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What is the Theory of Multiplier? The theory of multiplier explains the cumulative impact of changes in investment on income through changes in consumption expenditure. … Read more
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Keynesian Theory of Employment The Keynesian theory of Employment provides a systematic, realistic and feasible theory to determine all levels of employment. Principles of Effective … Read more
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What is Liquidity Preference? Liquidity preference is ‘the desire of people to hold money owing to various motives’. As discussed in the earlier video, money … Read more
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What is Acceleration Principle? In the acceleration principle, the accelerator model states that if technology (and thus, the capital-output ratio) is held constant, an increase … Read more
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What is Circular Flow of Income? The circular flow of income and expenditure simultaneously explains how national income and output are determined. The overall economic … Read more
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Monetary policy involves the manipulation of the money supply with the objective of affecting macroeconomic variables such as GDP, inflation, unemployment and exchange rates. Monetary policy … Read more
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What are Trade Cycles? A trade cycles is composed of periods of good trade, characterized by rising prices and low unemployment percentages, alternating with periods … Read more
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What is Inflation? Inflation is a scenario characterised by a continuous and rapid rise in prices. This decreases the value of money or its purchasing … Read more
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Aggregate demand (AD) is the total amount of goods and services demanded in an economy. Aggregate demand spending determines output and income, which in turn, … Read more
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The demand for money is the desired holding of financial assets in the form of money, that is, cash or bank deposits.” There are three approaches to the … Read more
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The economic analysis relies on marginal cost and marginal revenue analysis for determining the equilibrium output. Equilibrium output is the point at which MC =MR. … Read more
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What is Oligopoly? An oligopoly is similar to a monopoly, with the difference that instead of one firm, two or more firms dominate the market. … Read more
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What is Monopoly? A monopolistic market is a market comprising a single seller selling a unique product. In a monopoly market, the seller, by definition, has … Read more
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What is Break Even Analysis? Break even analysis, also called cost-volume-profit analysis, is employed to analyze the relationship among total cost, total revenue and total … Read more
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Types of Costs There are different types of Costs which include Fixed costs, Variable Costs, Total Cost, Marginal Cost and other cost types. Let us … Read more
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Theory of Production Introduction A production function is an equation, table or graph that shows the maximum volume of output available from a given set … Read more
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Demand forecasting is a reliable prediction, estimate, or forecast of the behavior or course of market demand for a particular product. Demand Forecasting may be … Read more
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The elasticity of demand is the measurement of change in the demand for a commodity in response to a certain change in its price. Symbolically, … Read more
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Nature of Demand Curve under Different Markets The demand curves of different markets differs based on the market type which is contingent on multiple factors … Read more
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In economics, the term demand is used in the following three forms – When Demand is an effective desire or when Demand is the quantity … Read more
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What is Business Economics? Business economics refers to the application of economic theory and methods to business administrative decision-making. It helps managers identify the impact … Read more
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Sound Finance and Functional Finance The fiscal policy primarily involves decisions related to tax rates, raising government revenue, and the level and pattern of public … Read more
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What is the principle of Maximum Social Advantage? Dalton stated that the main objective of public finance is to maximize social advantage. The achievement of … Read more
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What is World Trade organization? The World Trade Organization or WTO was established on 1 January 1995 during the Uruguay Round of GATT (General Agreement … Read more
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The International Monetary Fund (IMF) and International Bank for Reconstruction and Development (IBRD) (later, World Bank) were established at the United Nations Monetary and Financial … Read more
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What is Trade Policy? Trade Policy is a government policy that has a direct effect on the number of goods and services in terms of … Read more
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What is the Exchange rate? The exchange rate is the rate of exchange that indicates the price, i.e. the external value of a country’s currency. … Read more
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The trade between the two countries is called international trade, foreign trade, or external trade. International trade is different from Domestic trade which is discussed … Read more
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Definition – The budget shows the planned expenditure programmes and expected revenues from taxes and other sources during a given year. There are 14 types … Read more
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What is Balance of Payments (BOP)? Balance of payments (or BOP) is the record of all economic transactions between the people of a country and … Read more
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What is Public Debt? Public debt refers to loans raised by governments. Such debt may be internal or external. Internal debt refers to public loans … Read more
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What is Public Expenditure? Definition – Public Expenditure refers to expenses incurred by public authorities such as central, state and local governments for their own … Read more
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Factors Influencing the Incidence of Taxation The main factors influencing price changes and hence the incidence of taxation are as follows The elasticity of demand … Read more
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What is Public revenue? Public revenue refers to the income received from all sources for the purpose of public expenditure. Public revenue is used by … Read more
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What is Economic Environment? The economic environment consists of multiple facets. The economy as a whole and business markets external factors together make up the … Read more
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Definition – Economies of scale occurs when a company can reduce the cost per unit of production by increasing the volume of production. Economies of … Read more
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