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Direct control and Moral Suasion
Without actually using the above weapons, the central bank can attempt simply to use "moral suasion" to persuade the commercial banks to restrict credit when they wish to limit monetary expansion. Its effectiveness depends on the co-operation of the commercial banks.
Resource allocation in a free enterprise Although there are no central committees organising the allocation of resources, there is supposed to be no chaos but order. The major
Benefits are: 1) People can create their own decisions 2) The government has limited control, which is good for arrangement 3) Gives freedoms like Enterprise, ownership,
Keynesian unemployment According to Keynesian theory of income and employment, unemployment occurs due to lack of effective demand. If effective demand is less, production of
Cross-elasticity is the measure of responsiveness of demand for a commodity to the changes in price of its substitutes and complementary goods. For example, cross-elasticity of dem
arguments in favour of traditional theory of profit maximization
State the difficulties in the measurement of profit.
The gap between theory and practise and the role of managerial economics: We have noted above that application of theories to the process of business decision making contributes a
in the context of oligopoly theory explain the channels via which either a cost reduction or a quantity increase influence a supplier''s profitability
Q. Explain about Time series analysis? An analysis of relationship between variables over a period of time. Time-series analysis is helpful in assessing how an economic or othe
Variable Costs (VC) These are costs, which vary with the level of production. The higher the level of production, the higher will be the variable costs. They are associated
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