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DIFFERENTIALS AND DISEQUILIBRIUM In a free enterprise system, workers aim at maximizing their wages. Hence, it would be expected that workers would move form low-paying indus
Monetary policies This is the direction of the economy through the variables of money supply and the price of money. Expanding the supply of money and lowering the rate of in
Hawtrey views about Trade Cycle Hawtrey views trade cycle as a purely monetary phenomenon. According to him, inventory cycles result from fluctuations caused in the desired rat
THE GOVERNED ECONOMY The governed economy contains central authorities often simply called "the government" - who levy taxes on firms and households and which engages in numer
CLASSIFICATION OF TAXES Taxes can be classified on the basis of: a. Impact of the taxes It means on whom the tax is imposed. On the other hand, incidence of the
COSTS OF UNEMPLOMENT AND INFLATION In an economy both unemployment and inflation have adverse effects and policy makers formulate policy instruments to contain both
Price Elasticity of Supply Price Elasticity of supply measures the degree of responsiveness of quantity supplied to changes in price. The co-efficient of the elasticity of s
distinguish between industry demand and firm demand..
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
Monetary policy The problems concerning the ability of monetary policy to influence the economy, as for instance the doubts about the ability of lower interest rates to st
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