The theory of separation of powers explained. It is usual to divide the activities of a modern government in three parts, viz., legislative, executive and judicial. Corresponding to these three functions there are..
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Keynes' psychological law of propensity to consume explained.Consumption function or propensity to consume represents functional relationship between two aggregate i.e. total Consumption and total income. It indicates how consumption expenditure.
The Law of variable proportions Explained. The law of variable proportion is one of the fundamental laws of economics. It is the generalized form of Law of Diminishing marginal return. The law of variable proportion…
Short period: Various types of short-run cost curves explained. Short period is a period of time which is not sufficient enough to allow supply to be fully adjusted with the increased demand. In short-period certain inputs can't be increased or decreased.
The marginal productivity theory of Distribution explained. The marginal productivity theory of distribution determines the prices of factors of production. This theory states that a factor of production is paid price equal to its marginal product.
The supply and demand theory of interest explained. Capital is demanded by the investors because of its productivity. A firm or a producer demands capital as he wants to grow with production.
The liquidity preference theory of interest explained. Liquidity means shift ability without loss. It refers to easy convertibility. Money is the most liquid assets. Money commands universal acceptability. Everybody likes to hold assets in form of cash money.
The Circadian theory of Rent explained. David Ricardo, a notable British economist gave his view on the theory of rent which is popularly known as differential rent. According to him Rent is the price paid for the use of land.
10 most essential concepts of national income explained. National income is the sum total of wages, rent, interest, and profit earned by the factors of production of a country in a year. Thus it is the aggregate values of goods and services rendered…
Modern theory of wage determination explained. Modern economist opines that the price or remuneration of labour i.e. wage is determined by interaction of forces of demand and supply.