Economics

Definition: The concept of Investment Multiplier suggests that the increase in the Investments will lead to the income generation in multiples. In other words, the amount of Income/Output amplifies, resulting from the increase in the level of Investments. Investment Multiplier is the contribution of the famous economist John Keynes. He explained it with the help of the … [Read more...] about Investment Multiplier

Definition: Liquidity Preference Theory implies that Interest is an economic event determined by two factors, i.e. the Demand for Money and the Supply of Money. The great economist Lord Keynes gave this theory for Interest rate determination. Conventionally, classical theorists suggested that people only use the money for transaction motives. They keep the money to meet … [Read more...] about Liquidity Preference Theory

Definition: Consumer equilibrium is when the customer attains maximum satisfaction from his present consumption pattern with given income and prevailing market prices. Here, the customer is not likely to change his expenditure and units consumed. He derives the highest utility from the commodities purchased with the given income. First, lets us understand what … [Read more...] about Consumer Equilibrium

Definition: The Circular Flow model represents the continuous flow of money among the sectors of the economy. The process of exchange results in economic activities like production, consumption, investment and expenditure. It plays a significant role at the time of calculating national income. The sectors include: Domestic or Household Corporate or Firms Government … [Read more...] about Circular Flow Model

Definition: National Income or (NNPfc) is a sum of factor income earned by the nation in the form of monetary value from the economic activities such as income from the production of final goods or providing services in a financial year. The level of national income can determine the level of aggregate demand for goods and services. In the above definition, economic … [Read more...] about National Income

Definition: Consumer Price Index or CPI is the universal measure used for estimating the general price level of the goods and services produced in any nation. Every month the Bureau of Labor Statistics (BLS) computes and report the Consumer Price Index. It is a calculation of the accepted price paid by the metropolitan as well as rural users for a market basket of consumer … [Read more...] about Consumer Price Index (CPI)

Definition: Monopoly is one of the extreme imperfect markets amongst Monopoly, Monopolistic Competition and Oligopoly as it lacks several characteristics of perfect competition and it exists where a single firm rules the industry. The word Monopoly is a combination of two words in which “mono” implies “single” and “poly” means “seller”. Therefore, the market controlled by a … [Read more...] about Monopoly

Definition: Business cycle also termed as trade cycle displays the ebbs and flows of the economic activities occurring regularly, i.e., it shows the fluctuation movements or rhythmical changes in the level of aggregate economic activity. In other words, business cycle is the fluctuation cycle of economic activities that are more or less regular in time sequence. The level of … [Read more...] about Business Cycle

Definition: Supply Curve represents a pictorial depiction of the price and quantity relation of the commodities. Its shape is driven by cost behaviour, and the cost behaviour is constant to the uncertain trend of prices in the input market. If the company manufacture more products, it leads to a high cost per unit, and then the company shows the explicit relation amidst the … [Read more...] about Supply Curve

Definition: Oligopoly is defined as a market structure in which some sellers are selling similar or diversified products. In case when the company sells the same product, it is known as “pure oligopoly”. For example, industries producing petrol, steel, etc. However, when the company of an oligopolistic industry sells a diversified product, it is known as “heterogeneous … [Read more...] about Oligopoly