Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The Spendthrift Economy
This assumes a circular flow of income in a closed economy with no Government sector and no foreign trade. It also assumes the existence of two sectors, namely the sector of households and the sector of firms. Firms make the commodities that households consume. They purchase the services of factors of production from the household that own them, paying wages, rent, interest and profits in return, and then use the factors to make commodities.
It is assumed firms sell all of their output to households and receive money in return. All of the money received is in turn paid out to households. Part goes to households that sell factor services to firms, and the rest is profit paid out as Dividends to the owners of the firm. In short, neither households nor firms save anything in the spendthrift economy; everything that one group receives goes to buy goods and services from the other group. Expenditure is the rule of the day!
Now, suppose we wish to calculate the Total Value of the economy's output. We can do this based on either side of the circular flow shown in the figure above. The output-expenditure approach uses calculations based on the flows on the right hand side of the figure, while the input-factor income approach uses calculations based on the flows on the left-hand side of the figure.
Q. What is Labour Requirements on the production capacity? Labour Requirements: Spending on labour is one of the most vital elements of cost of production. Dependable and cor
An optimum Population Countries are often described as under populated or overpopulated. From the economist's viewpoint these terms do not refer to the population density (i.
Problem : (a) Describe inflation and discuss its origin using Classical and Keynesian theories. (b) Describe with diagram how can inflation occur in an economy with substant
FUNCTIONS OF CENTRAL BANK Economists and financial experts lack in unanimity about the functions of a central bank. According to Kisch and Elkin, the essential function of a c
introduction, evaluation,principle, activities concept behind Gatt & wto
assumptions and limitations
Measuring Point Elasticity on a Linear Demand Curve To explain the measurement of point elasticity of a linear demand curve, let's suppose that a linear demand curve is given b
Q. Show the method of production? A process or method of production is a combination of inputs essential for the production of output. A method of production is technically eff
#question.meaning of isoquants and its types
Stable and Unstable Equilibrium An equilibrium is said to be stable equilibrium when economic forces tend to push the market towards it. In other words, any divergence from t
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd