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What is Microeconomics
It studies the principles and problems of an individual business firm or an individual industry. It services the management in evaluating and forecasting the trends of the market.
Monetary Theory We have seen that Schumpeter theory which runs in terms of innovations and technical change, is at best an incomplete explanation of trade cycle . there are eco
Price Elasticity at Terminal Points The price elasticity at terminal point N equals 0 means that at point N, e = 0. At terminal point M, although, price-elasticity is undefined
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Structural unemployment Caused by structural changes such that there exist: Cyclical unemployment : During depression, prices are too low and profit margins remain d
Inelastic Supply Supply is said to be price inelastic if changes in price bring about changes in quantity supplied in less proportion. Thus, when price increases quantity sup
What is the Permanent Income Hypothesis? What is the theory's potential relevance for assessing the effects of temporary tax cuts for the purpose of fiscal stimulus? If you were
Q. Cheapening of Materials and Equipments? Expansion of an industry increases the demand for different kinds of materials and capital equipments. This will result in large scal
The neo-classical view The neo-classical view is that market forces are the best directors of the economy. Positive attempts by the government it is argued inevitably make th
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
Advantages of the Mixed Economy Necessary services are provided in a true market economy, services which were not able to make profit would not be provided. Incentive: Sin
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