Scarcity is a fundamental concept in economics that refers to the limited availability of certain resources relative to their demand. It is a condition where there is not enough of a particular resource to satisfy the wants and needs of all people in a society. Key Features of Scarcity: Limited Resources: Resources such as land, […]

Permanent Income Hypothesis The permanent income hypothesis is a theory in economics that suggests that people’s spending patterns are primarily influenced by their permanent income rather than their transitory income. Key Principles: Permanent Income: Permanent income refers to the income that is relatively stable and predictable over time, such as wages, pensions, and investments. Transitory […]

Mixed Economic System A mixed economic system is an economic system that uses a combination of private and public ownership and control. It is characterized by the coexistence of private enterprise and government regulation. Key Features of a Mixed Economic System: Private ownership: Allows for private ownership of property and businesses, with freedom to operate […]