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DIFFERENTIALS AND DISEQUILIBRIUM
In a free enterprise system, workers aim at maximizing their wages. Hence, it would be expected that workers would move form low-paying industries to high-paying industries and the low-paying industries would raise wages so as to retain labour until wage rates were uniform for all workers.
In practice, however, we observe differentials in wages both between occupations and even within the same occupations. Differentials arising from the characteristics of the occupations are called compensating or equalizing differentials, because they represent pay units made to equalize the net remuneration and compensate the workers for differences in their jobs.
The Frugal Economy In the Frugal economy, households and firms look to the future, and as a result undertake both Saving and Investment. SAVING Saving is income no
APPROACHES TO MEASURING NATIONAL INCOME The compilation of national income statistics is a very laborious task. The total wealth of a nation has to be added up and there are
Principles of Managerial Economics points
Suppose you are an efficient expert hired by a manufacturing firm that uses two inputs, labor (L) and capital (K). The firm produces and sells a given output. You have the followin
1. What does a MNC have to consider that a domestic company does not, and how does this impact capital budgeting? in addition to the complications encountered in doing a capital bu
gap between economic theory and business practice
The pigou effect, also called the real balance effect, is named after the well known Cambridge school economist Arthur Cecil pigou who had first clearly formulated the relationship
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REMEDIES FOR UNEMPLOYMENT The measures appropriate as remedies for unemployment will clearly depend on the type and cause of unemployment. Broadly they can be divided into:
examples
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