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BUSINESS CYCLES Meaning: The business cycle is the tendency for output and employment to fluctuate around their long-term trends. The figure below presents a stylised
REALISM OF PERFECT COMPETITION The assumptions of perfect competition are obviously at variance with the conditions which actually exist in real world markets. Some market
Indifference Curve Analysis In the 1930s a group of economists, including Sir John Hicks and sir Roy Allen, came to believe that cardinal measurement of utility was not necess
What limitations are inherent in the economist’s view of pricing?
If a firm's organisational characteristics have not any implications for its behaviour or more possibly have implications that can be taken into account without adopting a behaviou
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
Functions of the Budget The budget fulfils three main functions: To raise revenue to meet government expenditure The government of a country provides certain se
Causes There are a number of explanations of the business cycle but changes in the level of investment seem to be the most likely. In the simplest Keynesian model an increase
The war on drugs is an expensive battle, as a great deal of resources go into catching those who buy or sell illegal drugs on the black market, prosecuting them in court, and housi
Consumer Equilibrium To demonstrate the consumer's equilibrium i.e. the point at which the consumer maximizes utility with a given budget, we need to combine the indifference
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