Principle of Economics (Short Q & A) I.Com Part 1

What is the effect of inflation on salaried persons?

What is the effect of inflation on salaried persons? What is the effect of inflation on salaried persons? The hardest hits are the persons who receive fixed income, usually called the middle class.  Persons who live on past savings, fixed interest or rent, pensions, salaries etc., suffer during periods or rising price as their incomes remain fixed.  The middle class …

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Define draft

Define draft A preliminary version of a piece of writing Or A type of check where the payment is guaranteed to be available by issuing bank. Typically, banks will review the bank draft requester’s account to see if sufficient funds are available for the check to clear. Once it has been confirmed that sufficient funds are available, the bank effectively …

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Describe total expenditure method of measuring National Income

Describe total expenditure method of measuring National Income According to this method the money value of all expenditure on final product will add up to GNP from which capital consumption and net indirect tax (indirect tax-subsidy) are deducted. NI = GNP – Capital Consumption – Indirect Tax + Subsidy where, GNP = C + I + G + NX Net …

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State Prof. Marshall’s definition of National Income

State Prof. Marshall’s definition of National Income Sum of all the physical goods produced and services provided by utilizing the natural resources of the country with the help of labor and capital. In addition to this net income from abroad is also included. Accordingly National Income is the summation of all the goods produced and services provided and the net …

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Define capital

Define capital In economics, capital or capital goods or real capital refers to items of extensive value, it can also be applied to the amount of wealth a person controls or is capable of controlling. Capital goods may be acquired with money or financial capital. In finance and accounting, capital generally refers to financial wealth especially that used to start …

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Define perfect competition

Define perfect competition A market structure in which the following five criteria are met: 1. All firms sell an identical product. 2. All firms are price takers. 3. All firms have a relatively small market share. 4. Buyers know the nature of the product being sold and the prices charged by each firm. 5. The industry is characterized by freedom …

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Define average product

Define average product Average product equals the units of output produced per unit of a factor of production while keeping other factors of production constant.   The higher the average product, the more productive a factor of production is and vice versa. Average product is different from average revenue product which equals the revenue earned per factor of production while …

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Explain deductive method

Explain deductive method The deductive method is also named as analytical, abstract or prior method. The deductive method consists in deriving conclusions from general truths, takes few general principles and applies them draw conclusions.

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Define exchange rate

Define exchange rate The value of one currency for the purpose of conversion to another Or Price for which the currency of a country can be exchanged for another country’s currency. Factors that influence exchange rate include (1) interest rates, (2) inflation rate, (3) trade balance, (4) political stability, (5) internal harmony, (6) high degree of transparency in the conduct …

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Define imports

Define imports A commodity, article, or service brought in from abroad for sale Or A good or service brought into one country from another. Along with exports, imports form the backbone of international trade. The higher the value of imports entering a country, compared to the value of exports, the more negative that country’s balance of trade becomes. Source: http://www.investopedia.com/terms/i/import.asp

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