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Disadvantages of the Planned System The centrally planned economies suffer from the following limitations: Lack of choice: Consumers have little influence over what is p
Mankiw Model of Nominal Rigidities There are two related reasons for which firms do not frequently change prices. First, as we saw in the discussion on menu costs, the cost
A MATHEMATICAL APPROACH TO REVENUE AND COST FUNCTIONS Recall that TR = P x Q This implies that P(AR) = TR Q For example, assuming
Burden of the national debt The extent of the burden on a nation of public debt, depends in the first place on whether it is an external or an internal debt. The burden of th
define scarcityand oppurtunity cost.show how these concepts are useful in managerial decision making
BALANCE OF PAYMENTS The Balance of Payments of a country is a record of all financial transactions between residents of that country and residents of foreign countries. (Resi
THE COMPANY WOULD TO INCREASE THE PRICE OF STEEL IT SELLS BY 6% THE MANAGEMENT FORECAST ED THAT INCOME WILL RISE BY 4% NEXT YEAR AND THAT PRICE OF ALUMINIUM WILL FALL BY 2%. IF THE
The theory of consumer's behavior seeks to explain the determination of consumer's equilibrium. Consumer's equilibrium refers to a situation when a consumer gets maximum satisfacti
Gross Domestic Product A measure of national economic activity, GDP is measured from two approaches. GDP can be viewed as the total value of all goods and services produced in
DETERMINANTS OF MONEY SUPPLY The total supply of nominal money in the economy is determined by the joint behaviour of the central bank which controls the total issue of the hig
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