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Trade Unions And Increas­ing Wages For The Workers | Economics

ADVERTISEMENTS: The following article will guide you about the extent to which trade unions are capable of increas­ing wages for the workers of a particular industry. Trade (labour) unions are organisations of employees established to bargain with employers concerning wages, houses and conditions of employment. Unions are democratic institution whose central purpose is improving the […]

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Difference between Tax and Fees - Economics Discussion

(52 years ago) Now, it is possible to mention some of the important differences between tax and fees: In the first place, a tax is a compulsory contribution made by a taxpayer. A fee, by definition, is a voluntary payment. Secondly, as far as tax is concerned, there is no direct give-and-take relationship between the taxpayer and the tax-levying authority.

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Choice between Leisure and Income (With Equations)

(52 years ago) ADVERTISEMENTS: The indifference curve theory of consumer behaviour may be applied to derive the supply curve of labour of a worker from his preference-indifference pattern between income and leisure. Income is the aggregate of expenditures on all goods and services, and so, it is a source of (positive) utility to the worker. On the other […]

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Karl Marx Theory of Economic Development

(52 years ago) Marxian economic theory of growth is based on certain assumptions: 1. There are two principal classes in the society. (1) Bourgeoisie and (2) Proletatiat. 2. Wages of the workers are determined at subsistence level of living. 3. Labour theory of value holds good. Thus labour is the main source of value generation.

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Role of Government in Private Businesses

(52 years ago) ADVERTISEMENTS: In a mixed economy, the private sector constitutes the largest sector of the economy. The roles of a government, in a mixed economy, is grouped into two categories, namely, regulatory roles and promotional or development roles. The regulatory role of the government involves formulating and implementing various direct and indirect measures to monitor and […]

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Short-run and Long-run Supply Curves (Explained With …

(52 years ago) ADVERTISEMENTS: In the Fig. 24.1, we have given the supply curve of an individual seller or a firm. But the market price is not determined by the supply of an individual seller. Rather, it is determined by the aggregate supply, i.e., the supply offered by all the sellers (or firms) put together. This is the […]

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Forms of Workers Participation in Management

(52 years ago) Form # 3. Board of Representation: Under this scheme, one or two representatives of workers are nominated or elected to the Board of Directors. The basic idea is to safeguard worker’s interest, and usher in industrial harmony and good relations between workers and management. This is the highest form of participation.

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5 Major Limitations of Neo-Classical Model of Growth

(52 years ago) ADVERTISEMENTS: The following points highlight the five major limitations of the Neo-Classical model of growth. Limitation # 1. Narrow in Scope: The neo-classical approach of the theory of economic development is narrow and inadequate. They assume the existence of such factors as political stability, the “will to develop”, strong habits of thrift, given tastes, adequate […]

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Cobb-Douglas Production Function and Its Properties

(52 years ago) ADVERTISEMENTS: While discussing the production theory of the firm, economists C. W. Cobb and P. H. Douglas used a special form of production function, which is known as the Cobb-Douglas Production Function. Cobb-Douglas (C-D) production function is of the form Q = ALαKβ (8.100) where L = quantity used of labour ADVERTISEMENTS: K = quantity […]

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Short Run Cost and It’s Types (With Diagram)

(52 years ago) Short Run Cost and It’s Types (With Diagram) Conceptually, in the short run, the quantity of at least one input is fixed and the quantities of the other inputs can be varied. In the short-run period, factors, such as land and machinery, remain the same. On the other hand, factors, such as …

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Classical Theory of Employment and Output (With Diagram)

(52 years ago) ADVERTISEMENTS: To build up a classical macroeconomic model, here we will consider a particular framework within which the classical system can be studied. This framework is composed of an aggregate production function, the labour market, the money market, and the goods market. 1. Employment-Output Determination: Labour Market: Let us first consider the labour market where […]

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Law of Supply (With Diagram) | Goods - Economics Discussion

(52 years ago) Law of Supply (With Diagram) | Goods. In this article we will discuss about the law of supply of goods. Supply is the quantity of a good or service which is offered for sale at a given moment and at a given price. Supply does not necessarily comprise the entire stock of any commodity in existence, but only the amount put on to the market at a ...

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Derivation and Properties of IS and LM Curve

(52 years ago) ADVERTISEMENTS: In this article we will discuss about the derivation and properties of IS and LM curve, explained with the help of suitable diagrams. The goods market equilibrium schedule is the IS curve (schedule). It shows combination of interest rates and levels of output such that planned (desired) spending (expenditure) equals income. The goods-market equilib­rium […]

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Kuznet’s Inverted U-Hypothesis on Income Inequality ...

(52 years ago) Simon Kuznets put forward the hypothesis that relationship between per capita national income and the degree of inequality in income distribution may be of the form of inverted-U. Due to limitations of data he used an inequality measure of the ratio of income share of the richest 20 per cent of the population to the bottom 60 per cent of the population known as Kuznets’ ratio.

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Merits and Demerits of Direct Taxes - Economics Discussion

(52 years ago) ADVERTISEMENTS: Let us make an in-depth study of the merits and demerits of direct taxes. (A) Merits: 1. Equity: A direct tax is an equitable tax. Through it the rich can be made to pay more than the poor. In case of necessity, the poor people can be granted exemption from payment of such taxes. […]

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8 Major Problems Faced by the Indian Economy

(52 years ago) ADVERTISEMENTS: The following points highlight the eight major problems of the Indian economy. Some of the problems are: 1. Low level of national income and per capita income 2. Vast inequalities in income and wealth 3. Predominance of agriculture 4. Tremendous population pressure 5. Massive unemployment and Others. Indian Economy Problem # 1. Low level […]

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Elasticity of Demand and Supply (With Diagram)

(52 years ago) Arc elasticity of demand: In this formula P 1 and q 1 represent the original price and quantity, and P 2 and q 2 represent the new price and quantity. Thus, (P 1 + P 2 )/2 is a measure of the average price in the range along the demand curve and (q 1 + q 2) / 2 is the average quantity in this range. Elasticity of Demand and Supply # 9.

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Economic Plan­ning: Imperative and Indicative Planning

(52 years ago) A socialist planning is then called imperative planning as the central planning authority performs all economic activities in the best interests of the society. Thus, we find two types of economic plan­ning : imperative planning or directive plan­ning, and indicative planning or planning by inducement. 1.

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Subject-Matter of Economics

(52 years ago) ADVERTISEMENTS: In this article we will discuss about the subject-matter of economics. Economics is a social science. Paul Samuelson calls it the queen of social sciences. It is concerned with the solution of society economic problems. In fact, many of the world’s most pressing problems, such as unemployment and inflation, budgetary deficits and public debt […]

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Industrial Discipline: Meaning, Types, Causes and Maintenance

(52 years ago) Industrial discipline refers to orderly working of the employees of an industrial undertaking in accordance with established rules, regulations and conventions. Discipline is a force that prompts an individual to observe rules, regulations and procedures to at­tain an objective. In the broad sense, discipline means orderliness – the opposite ...

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Dividend Policy: Introduction, Types, Policy, Theories ...

(52 years ago) Jun 02, 2021 · ADVERTISEMENTS: 1. Introduction to Dividend Policy. Dividend refers to that part of net profits of a company which is distributed among shareholders as a return on their investment in the company. Dividend is paid on preference as well as equity shares of the company. On preference shares, dividend is paid at a predetermined fixed rate.

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Deficit Financing: Meaning, Effects and Advantages

(52 years ago) Deficit Financing: Meaning, Effects and Advantages! Meaning of Deficit Financing: Deficit financing in advanced countries is used to mean an excess of expenditure over revenue—the gap being covered by borrowing from the public by the sale of bonds and by creating new money.

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6 Main Exceptions to the Law of Demand (With Diagram)

(52 years ago) The following points highlight the six important exceptions to the law of demand. The exceptions are: 1. Speculative Demand 2. Snob Appeal or Veblen Good 3. Using Price as an Index of Quality 4. Giffen Good 5. Possibility of Future Rise in Prices 6. Highly Essential Good.

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Pricing Policy: Meaning, Objectives and Factors

(52 years ago) ADVERTISEMENTS: In this article we will discuss about:- 1. Meaning of Pricing Policy 2. Considerations Involved in Formulating the Pricing Policy 3. Objectives 4. Factors Involved. Meaning of Pricing Policy: A pricing policy is a standing answer to recurring question. A systematic approach to pricing requires the decision that an individual pricing situation be generalised […]

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Top 3 Benefits of Foreign Investment | Economics

(52 years ago) The benefits are: 1. New Jobs 2. New Technology 3. Foreign Exchange Earnings. Benefit # 1. New Jobs: Firstly, foreign investment is likely accelerate the rate of growth of developing countries and create more jobs and incomes in the process. However, there is a limit to the number of jobs created directly by foreign investment due to the fact ...

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Determining Equilibrium National Income (With Example)

(52 years ago) ADVERTISEMENTS: The following points highlight the top two methods of determining equilibrium national income. The methods are: 1. Aggregate Income-Expenditure Approach 2. Savings-Investment Approach. Method # 1. Aggregate Income-Expenditure Approach: In a two-sector Keynesian model, aggregate demand is composed of planned or desired consumption demand and planned investment …

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Determinants of Price Elasticity of Demand | Goods | Economics

(52 years ago) ADVERTISEMENTS: The following are the main factors which determine the price elasticity of demand for a commodity: 1. The Availability of Substitutes 2. The Proportion of Consumer’s Income Spent 3. The Number of Uses of a Commodity 4. Complementarity between Goods 5. Time and Elasticity. Determinant # 1. The Availability of Substitutes: Of all the […]

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5 Harmful Effects of International Trade – Discussed

(52 years ago) ADVERTISEMENTS: The following five points will highlight the five harmful effects of International Trade. They are: 1. Dual Economies 2. Not Much Beneficial for Poor Countries 3. Limited Possibility of Gain 4. Adverse Effect on ‘Demonstration Effect’ and 5. Secular Deterioration in the Terms of Trade. Effect # 1. Dual Economies: International trade has resulted […]

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CAPM: Assumptions and Limitations | Securities | Financial ...

(52 years ago) The CAPM has serious limitations in real world, as most of the assumptions, are unrealistic. Many investors do not diversify in a planned manner. Besides, Beta coefficient is unstable, varying from period to period depending upon the method of compilation. They may not be reflective of the true risk involved.

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Capital Budgeting: It’s Concept & Significance

(52 years ago) Capital budgeting is a planning process that is used to determine the worth of long-term investments of an organization. The long- term investments of the organization can be made in purchasing a new machinery, plant, and technology. In other words, capital budgeting is a method of identifying, evaluating, and selecting long-term investments.

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How to Reduce Poverty in India ? (9 Measures)

(52 years ago) ADVERTISEMENTS: Various measures which should be taken to reduce poverty in India are: 1. Changing Strategy of Economic Growth 2. Agricultural Growth and Poverty Alleviation 3. Speedy Development of Infrastructure 4. Accelerating Human Resource Development 5. Growth of Non-Farm Employment 6. Access to Assets 7. Public Distribution System 8. Direct Attack on Poverty 9. …

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Weber’s Theory of Industrial Location (With Criticism ...

(52 years ago) ADVERTISEMENTS: Alfered Weber a German economist was the first economist who gave scientific exposition to the theory of location and thus filled a theoretical gap created by classical economists. He gave his ideas in his Theory of Location of Industries’ which was first published in German language in 1909 and translated into English in 1929. […]

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Changes in Government Spending (With Diagram) | IS-LM ...

(52 years ago) Changes in Government Spending (With Diagram)! If government spending increases to G, in Fig. 6.9(a) the combined investment plus government spending curve shifts out to the right from I 0 + G 0 to I 0 + G. At a fixed interest rate r 0 investment will remain unchanged, and I 0 + G, is greater than I 0 + G 0 by ΔG = G 1 – G 0).. In order to maintain equilibrium (given by the condition I + G ...

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Multiplier Keynesian: Its Working, Operation, Importance ...

(52 years ago) ADVERTISEMENTS: Read this article to learn about the meaning, working, importance, leakages in the working and criticism of multiplier Keynesian. Meaning and the Development: The concept of ‘Multiplier’ occupies an important place in Keynesian theory of income, output and employment. It is an important tool of income propagation and business cycle analysis. According to Keynes, […]

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How to derive Individual’s Demand Curve from indifference ...

(52 years ago) Thus with the fall in price from P 1 to P 2 the quantity demanded of the good falls. Likewise, the consumer is in equilibrium at Q 3 with price line PL 3 and is purchasing OM 3 at price P 3.With this information we can draw the demand curve, as is done in the lower portion of Fig. 8.48 It will be seen from Fig. 8.48 (lower part) that the demand curve of a Giffen good slopes upward to the right ...

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The Harrod-Domar Economic Growth Model (With Assumptions)

(52 years ago) ADVERTISEMENTS: Let us make an in-depth study of the Harrod-Domar Economic Growth Model:- 1. Introduction to the Harrod-Domar Economic Growth Model 2. General Assumptions 3. Instability of Growth 4. The Domar Model 5. Summary of Main Points 6. Diagrammatic Representation. Introduction to the Harrod-Domar Economic Growth Model: Ever since the end of Second World War, […]

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Effect of Imposing Tax on Sellers and Buyers

(52 years ago) Fig. 4.30 demonstrates the sharing of the burden of a sales tax between buyers and sellers. In Fig. 4.30(a), we have drawn a perfectly elastic demand curve, D, and a normal-shaped supply curve, S. Intersection of these two curves define equilibrium price and equilibrium quantities prior to …

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Oligopoly Models: Sweezy’s Kinked Demand Curve Model and ...

(52 years ago) 1. Sweezy’s Kinked Demand Curve Model: The kinked demand curve of oligopoly was developed by Paul M. Sweezy in 1939. Instead of laying emphasis on price-output determination, the model explains the behavior of oligopolistic organizations. The model advocates that the behavior of oligopolistic organizations remain stable when the price and ...

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11 Criticisms Against the Say’s Law of Market

(52 years ago) Read this article to discover the eleven major criticisms against the Say’s Law of market. 1. Possibilities of Deficiency of Effective Demand: It is assumed in Say’s Law that whatever is earned is spent either on consumption goods or on investment goods, thus, income is automatically spent at a rate which will keep all the resources employed.

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Market Mechanism in Economics: Examples and Graphs

(52 years ago) This restricts the ‘freedom’ of sellers, and is an example of restriction on the market. ADVERTISEMENTS: As the above example makes clear, the market mechanism refers to the forces of demand and supply. These forces take the form of buyers and sellers in the market. Economists show that if left ‘free’ these forces use the self-interest ...

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The Life-Cycle Theory of Consumption (With Diagram)

(52 years ago) The life-cycle theory of the consumption function was developed by Franco Modigliani, Alberto Ando and Brumberg. According to Modigliani, The point of departure of the life cycle model is the hypothesis that consumption and saving decisions of households at each point of time reflect more or less a conscious attempt at achieving the preferred ...

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Organizational Theories: 12 Major Organizational Theories

(52 years ago) Organisational Theories – Weber’s Ideal of Bureaucracy, Modernization Theory, Hawthorne Study and Contingency Theory. Organizational theory is the sociological study of formal social organizations, such as businesses and bureaucracies, and their interrelationship with the environment in which they operate.

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9 Main Causes for the Growth of Monopoly

(52 years ago) ADVERTISEMENTS: The following points highlight the nine main causes for the growth of monopoly. The causes are: 1. Industrial Policy and the Expansion of the Scope of the Private Sector 2. Inter-Company Investment 3. Government’s Licensing Policy 4. Import Duties and Market Protection 5. Planning Process and Others. Monopoly: Cause # 1. Industrial Policy and […]

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Top 9 Importance of Macroeconomics – Discussed!

(52 years ago) ADVERTISEMENTS: Brief outlines of the nine theoretical and practical importance of Macroeconomics are (1) Functioning of an Economy, (2) Formulation of Economic Policies, (3) Understanding Macroeconomics, (4) Understanding and Controlling Economic Fluctuations, (5) Inflation and Deflation, (6) Study of National Income, (7) Study of Economic Development, (8) Performance of an Economy, …

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What is Rural Marketing? - Definitions, Meaning, Features ...

(52 years ago) This same rule stands good for rural marketing also.According to the National Commission on Agriculture, “Rural marketing is a process which starts with a decision to produce a saleable farm commodity and it involves all the aspects of market structure or system, both functional and institutional, based on technical and economic considerations, and includes pre- and post-harvest operations ...

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Fisherian and Cambridge Approaches Compared: Which 1 is ...

(52 years ago) The similarities between the Fisherian and the Cambridge approaches are discussed below: 1. Similar Equations: ADVERTISEMENTS: Robertson’s cash-balance equation, P = M/KT is quite similar to that given by Fisher; P = MV/T. Both the equations use the same symbols with same meanings. The only difference lies in V and K which are, in fact ...

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Role of Discount and Finance House of India (DFHI)

(52 years ago) Role of Discount and Finance House of India (DFHI)! Pursuant to the Vaghul Working Group recommendation for setting up an institution to provide enhanced liquidity to the money market instruments, the RBI set up the Dis­count and Finance House of India (DFHI) jointly with public sector banks and the all-India financial institutions.

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Multinational Corporations (MNCs): Meaning, Origin and Growth

(52 years ago) ADVERTISEMENTS: In this article we will discuss about the Multinational Corporations (MNCs):- 1. Meaning and Importance of MNCs 2. Origin of MNCs 3. Growth 4. Effects 5. Conclusion. Meaning and Importance of MNCs: A powerful influence on patterns of world trade and factor movements is the multinational firm. A multinational corporation is a company with […]

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