ECONOMICS

Primary Deficit: A primary deficit occurs when the government’s expenditures exceed its revenues. This means that the government is spending more money than it is taking in, and it must borrow money from the private sector to cover the shortfall. Causes of Primary Deficit: High spending: Government spending increases due to factors such as social […]

Bureaucracy Bureaucracy is a complex and multifaceted concept, often referred to as the “politics of administration.” It refers to the organizational structures, rules, procedures, and processes that govern public and private institutions. Key Features of Bureaucracy: Organizational Structure: Bureaucratic organizations are characterized by their hierarchical structure, divided into various departments or agencies. Rules and Procedures: […]

The marginal rate of technical substitution (MRTS) is a measure of the rate at which one input can be substituted for another input, while keeping the production function unchanged. It is calculated by the ratio of the marginal product of each input with respect to the other input. The marginal product of an input measures […]

New Keynesian Economics New Keynesian economics is a macroeconomic theory that emphasizes the role of government intervention in mitigating economic fluctuations. Unlike traditional Keynesianism, which focuses on aggregate demand, New Keynesianism emphasizes the importance of supply-side policies to stimulate economic growth. Key Concepts: 1. Demand-Based Policies:– Focus on increasing aggregate demand through fiscal and monetary […]

Economics is a social science that studies the production, distribution, and consumption of goods and services. It is a broad field that encompasses a wide range of topics, including: Macroeconomics:* Aggregate economic activity* Economic growth* Inflation* Interest rates* Unemployment Microeconomics:* Individual decision-making* Supply and demand* Labor markets* Market structure* International trade Public Economics:* Government spending […]

Per Capita Income (PCI) Per capita income (PCI) is a measure of a country’s wealth that is calculated by dividing the nation’s total income by its total population. It reflects the average income earned per person within a country. Formula:Per Capita Income (PCI) = National Income/Population Units:– Dollars, euros, pounds, etc. Key Factors Affecting PCI: […]

The concept of the “Fourth World” is a complex and controversial one. It generally refers to a hypothetical social order that exists beyond the boundaries of the three current “worlds”: the First World (the West), the Second World (formerly the Soviet Union), and the Third World (developing nations). Here are some key features of the […]

Disinflation Disinflation is a decrease in inflation. It occurs when the general price level of goods and services is falling. In other words, prices are decreasing. Causes of Disinflation: Demand-pull disinflation: Occurs when consumer demand decreases, leading to a decline in prices. Cost-push disinflation: Occurs when production costs decline, such as raw material prices or […]

Demographic dividend A demographic dividend refers to the positive impact on economic growth caused by a decline in fertility rates and an increase in life expectancy, leading to an increase in the working-age population. Explanation: Declining fertility rates: As societies become more industrialized and modern, fertility rates decline. This reduces the number of births per […]

Keynesian Economics Keynesian economics is a macroeconomic theory that advocates for increased government intervention in the economy to regulate aggregate demand and stabilize prices. Keynesians believe that the role of the government is to influence economic activity through fiscal policy and monetary policy. Main Principles: 1. Aggregate Demand:– Keynesian theory emphasizes the importance of aggregate […]