ECONOMY

Neoclassical economics is a school of economic thought that emphasizes individual choice, free markets, and market equilibrium. It is one of the three main economic paradigms, alongside Marxist and Keynesian economics. Key principles of neoclassical economics: Individualism: Neoclassical economics assumes that individuals are rational actors who make decisions based on their own self-interest. Market equilibrium: […]

Free Rider Problem The free rider problem is a phenomenon in economics that describes the problem faced by individuals in situations where they can benefit from the actions of others without contributing their own resources or effort. Explanation: In a situation where individuals can freely ride on the contributions of others, those who do not […]

Definition: Inflation is a general increase in prices and a decrease in the purchasing power of money. It is a sustained increase in the cost of living, commonly measured by an index such as the Consumer Price Index (CPI). Causes: Demand-pull inflation: Occurs when demand for goods and services exceeds supply, leading to higher prices. […]

BRICS countries, also known as the Big Four, are the five largest emerging economies in the world by GDP (nominal). They are Brazil, Russia, India, China, and South Africa. Key characteristics of BRICS countries: Large size: They have a combined GDP of over $15 trillion, which is larger than the GDP of many developed countries. […]

Producer Surplus Producer surplus is the amount by which the quantity that producers are willing and able to produce exceeds the quantity that consumers are willing and able to buy at a given price. In other words, it is the surplus of production over consumption. Formula for Producer Surplus: Producer Surplus = Qp – Qd […]

The private sector refers to the part of the economy that is privately owned and controlled by individuals or businesses, rather than by the government. It includes a wide range of industries, such as manufacturing, retail, technology, and finance. Here are some key characteristics of the private sector: Privately owned: The businesses in the private […]

Non-Performing Assets (NPAs) Non-performing assets (NPAs) are loans or other debt securities that have stopped generating interest or payments due to a borrower’s default. They are often classified into categories based on the severity of the delinquency, such as subprime, delinquent, and bad debt. Types of NPAs: Subprime: Loans to borrowers with poor credit histories, […]

Definition: Economic forecasting is the process of using economic models and other techniques to predict future economic growth, inflation, unemployment, and other economic indicators. It is a crucial tool for policymakers, businesses, and investors to make informed decisions about economic performance. Key Techniques: Statistical models: Regressions, time series analysis, and other statistical techniques are used […]

The cross elasticity of demand measures the change in the quantity demanded for one good in response to a change in the price of another good. In other words, it tells you how much the quantity demanded for one good changes when the price of another good changes. Formula: Cross elasticity of demand = change […]