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Devaluation refers to a decline in the value of a currency in relation to another, usually brought about
by the actions of a central bank or monetary authority. Devaluation is sometimes used more
generally to describe any significant drop in a currency's international exchange rate, although
usually a decline caused by market forces with no government intervention is termed depreciation.
Devaluations are most often associated with developing countries that don't allow their currency
prices to float freely on the open market.
There are essentially two main classes of devaluations: planned policies and reactions to market
events. Planned devaluations are brought about almost exclusively by government decisions to
deliberately reduce the relative value of a currency, usually intended as a means to some
improvement in the country's trading position. Market-driven devaluation, by contrast, is often the
formal recognition by a government, frequently during a monetary crisis, that the value of its
currency relative to major world currenciesespecially the dollarhas already depreciated through
trading in the foreign exchange markets. The primary alternative to a decision to devalue a
currency in response to market forces is an organized government attempt, either unilaterally or
multilaterally, to prop up a sagging currency through coordinated market intervention. Some
devaluation scenarios may involve a mix of both deliberate and reactive stimuli; however, both kinds
of devaluations are controversial undertakings, and some observers assert that they do not always
lead to the intended effects.
level, but if the downward pressure on the markets persists, the country may deplete its reserves in
a matter of weeks or months and either require assistance from other countries or accept
devaluation as the alternative.
employmentbefore improving the overall balance. One explanation for this phenomenon is that
changes in unit demand often move more slowly than price corrections, causing an immediate
decrease in export revenues (due to lower prices) without an initial increase in units to offset it.
Another hypothesized influence is known as the Marshall-Lerner condition, which states that the sum
of price elasticities (the responsiveness of demand to a change in prices) of imports and exports
must be greater than 1.0 if the depreciation is to induce a shift to greater export revenues, and
hence, an improvement in the trade balance. Some empirical evidence supports the J curve and
suggests that despite its negative effects in the short run, devaluation can lead to improved trade
balances.
Figure 1
J Curve: Theoretical Shift in Balance
of Trade Following Devaluation
Some have argued that devaluation policies can lead to other more subtle repercussions in the
international trading system. Other factors being equal, an improvement in country's trade balance
means a decrease in the trade balance somewhere else in the world, since the sum of all world
trade balances must equal zero. By logic of this argument, an improvement in one country's trade
balance must be gained at the expense of its trading partners' trade balances. This is why
devaluation is often referred to as a "beggar-thy-neighbor" policy.
Conclusion
The effects of devaluation can be complex and far-reaching. In theory, a weaker currency means
that exports from the affected country will be cheaper relative to prices in other countries, and that
imports will be more costly. These conditions may provide a boost to an economy that has
undergone devaluation, but typically there are negative consequences as well, both internally and
externally. And depending on the nature of a country's trading structure, the benefits may never
materialize at all.
For large international corporations, devaluations often translate into lost revenue and decreased
profitability in the affected country (assuming the company isn't based there), as companies usually
can't raise their prices enough in competitive markets to make up for the losses stemming from the
lower exchange rate. Moreover, since devaluations frequently coincide with broader economic
turmoil such as inflation, instability in the financial markets, and recession, spending is likely to be
tight in countries whose currencies have been devalued, further eroding sales. On the other hand,
for companies with substantial export-oriented operations in countries whose currencies have been
devalued, the business may be able to enjoy some cost advantages in its labor and materials,
enhancing its competitive position abroad.
PT
(the
Fisher
Equation)
Total Spending
Thus if an economy has US$3, and those $3 were spent five times in a month, total spending for
the
month
would
be
$15.
QTM Assumptions
QTM adds assumptions to the logic of the equation of exchange. In its most basic form, the
theory assumes that V (velocity of circulation) and T (volume of transactions) are constant in the
short term. These assumptions, however, have been criticized, particularly the assumption that V
is constant. The arguments point out that the velocity of circulation depends on consumer and
business
spending
impulses,
which
cannot
be
constant.
The theory also assumes that the quantity of money, which is determined by outside forces, is the
main influence of economic activity in a society. A change in money supply results in changes in
price levels and/or a change in supply of goods and services. It is primarily these changes in
money stock that cause a change in spending. And the velocity of circulation depends not on the
amount of money available or on the current price level but on changes in price levels.
Finally, the number of transactions (T) is determined by labor, capital, natural resources (i.e. the
factors of production), knowledge and organization. The theory assumes an economy in
equilibrium
and
at
full
employment.
Essentially, the theorys assumptions imply that the value of money is determined by the amount
of money available in an economy. An increase in money supply results in a decrease in the
value of money because an increase in money supply causes a rise in inflation. As inflation rises,
the purchasing power, or the value of money, decreases. It therefore will cost more to buy the
same quantity of goods or services.
Money Supply, Inflation and Monetarism
As QTM says that quantity of money determines the value of money, it forms the cornerstone of
monetarism.
Monetarists say that a rapid increase in money supply leads to a rapid increase in inflation.
Money growth that surpasses the growth of economic output results in inflation as there is too
much money behind too little production of goods and services. In order to curb inflation, money
growth
must
fall
below
growth
in
economic
output.
This premise leads to how monetary policy is administered. Monetarists believe that money
supply should be kept within an acceptable bandwidth so that levels of inflation can be
controlled. Thus, for the near term, most monetarists agree that an increase in money supply can
offer a quick-fix boost to a staggering economy in need of increased production. In the long
term,
however,
the
effects
of
monetary
policy
are
still
blurry.
Less orthodox monetarists, on the other hand, hold that an expanded money supply will not have
any effect on real economic activity (production, employment levels, spending and so forth). But
for most monetarists any anti-inflationary policy will stem from the basic concept that there
should be a gradual reduction in the money supply. Monetarists believe that instead of
governments continually adjusting economic policies (i.e. government spending and taxes), it is
better to let non-inflationary policies (i.e. gradual reduction of money supply) lead an economy
to
full
employment.
QTM Re-Experienced
John Maynard Keynes challenged the theory in the 1930s, saying that increases in money supply
lead to a decrease in the velocity of circulation and that real income, the flow of money to the
factors of production, increased. Therefore, velocity could change in response to changes in
money supply. It was conceded by many economists after him that Keynes idea was accurate.
QTM, as it is rooted in monetarism, was very popular in the 1980s among some major
economies such as the United States and Great Britain under Ronald Reagan and Margaret
Thatcher respectively. At the time, leaders tried to apply the principles of the theory to
economies where money growth targets were set. However, as time went on, many accepted that
strict adherence to a controlled money supply was not necessarily the cure-all for economic
malaise.
Money Market
The money market is a subsection of the fixed income market. We generally think of the term
fixed income as being synonymous to bonds. In reality, a bond is just one type of fixed income
security. The difference between the money market and the bond market is that the money
market specializes in very short-term debt securities (debt that matures in less than one year).
Money market investments are also called cash investments because of their short maturities.
Money market securities are essentially IOUs issued by governments, financial institutions and
large corporations. These instruments are very liquid and considered extraordinarily safe.
Because they are extremely conservative, money market securities offer significantly lower
returns than most other securities.
One of the main differences between the money market and the stock market is that most money
market securities trade in very high denominations. This limits access for the individual investor.
Furthermore, the money market is a dealer market, which means that firms buy and sell
securities in their own accounts, at their own risk. Compare this to the stock market where a
broker receives commission to acts as an agent, while the investor takes the risk of holding the
stock. Another characteristic of a dealer market is the lack of a central trading floor or exchange.
Deals are transacted over the phone or through electronic systems.
The easiest way for us to gain access to the money market is with money market mutual funds,
or sometimes through a money market bank account. These accounts and funds pool together the
assets of thousands of investors in order to buy the money market securities on their behalf.
However, some money market instruments, like Treasury bills, may be purchased directly.
Failing that, they can be acquired through other large financial institutions with direct access to
these markets.
There are several different instruments in the money market, offering different returns and
different risks.
Capital Market
Capital Market is one of the significant aspects of every financial market. Hence it is necessary
to study its correct meaning. Broadly speaking the capital market is a market for financial assets
which have a long or indefinite maturity. Unlike money market instruments the capital market
instruments become mature for the period above one year. It is an institutional arrangement to
borrow and lend money for a longer period of time. It consists of financial institutions like IDBI,
ICICI, UTI, LIC, etc. These institutions play the role of lenders in the capital market. Business
units and corporate are the borrowers in the capital market. Capital market involves various
instruments which can be used for financial transactions. Capital market provides long term debt
and equity finance for the government and the corporate sector. Capital market can be classified
into primary and secondary markets. The primary market is a market for new shares, where as in
the secondary market the existing securities are traded. Capital market institutions provide rupee
loans, foreign exchange loans, consultancy services and underwriting.
Working Capital
January 23, 2013 Answers, B.Com. Part 2, Bachelor of Commerce, Banking and Finance
Working Capital
Q.2. What do you mean by working capital. State its importance in business?
Introduction
Adequacy of working capital rises the credit standing of the concern. Such a concern can buy
goods on better terms and reduce the cost of production on account of receipt of cash discounts.
A concern is sure to fail, if there is no adequate supply of materials or cash. Nowadays
production is carried on in anticipation of demand. There is a time between the point of supply of
raw material and the ultimate realization of the sale proceeds of finished products. A large
amount of working capital is required to keep the business moving continuously. Many new
businesses are floated very well in the beginning but are unable to run properly usually because
of inadequacy of working capital.
Kinds of Working Capital
Working capital a short term finance is of two types:
1. Initial Working Capital
It is the amount required to meet all current expenses the early development of business. This
period may vary in different types of business according to their nature.
2. Regular Working Capital
It is the amount required after the business has been established as a going concern. The regular
capital consists of two parts
(a) Fixed
(b) Variable
(a). Fixed Working Capital is the minimum amount of working capital required to carry on
normal business operations. Every business has to maintain a minimum inventory of raw
materials work in process, finished goods, etc. It always requires short term finance for making
certain regular payments such as purchases, salaries, wages and rent etc.
(b). Variable Working Capital part of working capital is also known as seasonal or special
working capital. It is the additional amount required during busy seasons on emergencies or
under certain abnormal conditions such as in cases of rising prices, strikes and lock-out etc.
Factors Governing Short-Term Or Working Capital
1. Nature of Business
It is an important feature of determining the amount of working capital. Trading concerns
requires large amount of working capital since their investment in current assets such as bills and
book debts, etc., is more than that in fixed assets. Manufacturing units engaged in producing
producers goods require lesser proportion of working capital. Public utilities like transport,
electricity corporations, etc., need relatively little amount of working capital.
2. Size of Business
Small size business needs relatively large amount of working capital than a larger business.
import duties so by a quota system. Another method may be import substitution i.e. trying to
produce in the country what it currently imports. Exports can be stimulated by measures of
export promotion granting subsidies or other concessions to industrialists and exports.
Depreciation of the currency
If a country depreciates its currency it proves very helpful in increasing the exports of goods. The
value of the home currency fall relatively to foreign currency hence the foreigners are able to buy
move goods with the same amount of their own currency or for the same amount of goods they
have to pay less in terms of their own currency than before.
Devaluation
A country can turn the balance of payments in its favour by devaluating her currency. In this case
also the devalued currency will become cheaper in terms of the foreign currency and the
foreigners will be able to buy move goods by paying the same amount of their own currency. The
effect is the same as in the case of depreciation.
Deflation
Deflation means construction of currency. If currency is contracted then according to the quantity
theory of money the value of the currency will rise or the prices will fall. When prices fall the
country becomes a good country to buy in and not a good country to sell into Exports will also
thus increase and imports will be checked and hence the balance of trade will become
favourable.
Exchange Control
Under a system of exchange control, all exporters are asked to surrender their claims or foreign
currencies to the central bank which pays in return the home currency, which the exporters really
want. This available foreign exchange is rationed by the central bank among the licenced
importers. Thus imports are restricted to the foreign exchange available. There is no danger of
more goods being imported than exported.
Balance of Payment
January 29, 2013 Answers, Banking, HSC Part-2 ( XII ), Intermediate
Balance of Payment
Q.29. Write a detailed note on Balance of Payments.
BALANCE OF PAYMENTS
Each nation periodically publishes a set of statistics that summarize for a given period all
economic transactions between its residents and the outside world. This statistical statement is
referred to as balance of payments. The accounts show how a nation has financed its internation
activities during the reporting period. They also show that what changes have taken place in the
nations financial claims and obligations with the rest of the world.
STANDARD PRESENTATION
The IMF has significantly worked with success to standardize the system and the form of
presentation.
B.O.P DOUBLE ENTRY ACCOUNT
The B.O.P used double entry accounting. Transactions are recorded as credits of the yield
receipts from or claims against foreign owners. Credits are received for example by exports of
merchandise, sale of securities overseas and rendering services to foreigners. Similarly, debits
are recorded of transactions cause payments to foreigners e.g. importing goods, tourist expenses
abroad, purchase of foreign bonds.
B.O.P CURRENT ACCOUNT
The Current Account uncludes merchandise trade in good and International Services are termed
as Invisible trade. There are four basic service components. Tourism, Investment, Private Sector,
Services such as royalties, rent, consulting and engineering fees etc and Government services
such as diplomatic and buildings and membership fees in international organizations.
B.O.P CAPITAL ACCOUNT
The capital account has a long term and a short term sector. The long term amount shows the
inflow and outflow of capital commitments which have a maturity longer than a year. Short term
capital movement frequently have a maturity date from 30-90 days. Long term capital items
generally include loans to and from other governments, financial support for development.
Projects abroad and export financing. Short term capital include paying for international services,
selling accounts etc
Balance of Trade
January 29, 2013 Answers, Banking, HSC Part-2 ( XII ), Intermediate
Balance of Trade
Q.28. Define Balance of Trade
BALANCE OF TRADE
Balance of trade refers to the difference in the value of imports and exports of commodities only
i.e. visible items only. Movements of goods between countries is known as visible trade because
the movement is open and can be verified by the custom officials with respect to balance of trade
the following terminologies are important.
Rate of Exchange
January 29, 2013 Answers, Banking, HSC Part-2 ( XII ), Intermediate
Rate of Exchange
Q.23(A). Define the term rate of exchange.
Q.23(B). Explain how the rate of exchange is determined?
RATE OF EXCHANGE
The rate at which the currency or monetary unit of one country can be exchanged with the
monetary unit of other country is called the rate of exchange. In other words, the rate at which a
unit of one country exchanges for the currency of another is the rate of exchange between them.
It may be used to denote the system whereby the trading nations pay off their debts.
Determination of Rate of Exchange
The rate of exchange is determined under the following under the following money systems as:
Under Gold Standard
If two currencies are on gold standard and if their currencies are expressed in terms of gold i.e. a
certain weight of gold then the rate of exchange is determined by reference to the gold contents
of the two currencies. Suppose Pakistan and United States are on gold standard the rupee being
equal to 10 grams of gold and dollar consisting of 50 grams of gold. The rate of exchange
between the two countries will be
1 Rupee = 10/50 = 1/5 $ or 0.20 cents
1 Dollar = 50/10 = 5 Rupees.
Thus the rate of exchange is determined in a direct manner by comparison between the gold
contents of the two countries. This rate of exchange is also known as Mint Par of Exchange. The
actual rate in the foreign exchange market will be slightly different from the mint par to allow for
certain expenses. However the actual rate of exchange between currencies will not depart much
from the mint par and will move between the two points of export and import of gold. These
points are called Gold Points.
Under Paper Currency Method
This phenomenon of exchange rates determination is also called Purchasing Power Parity
Theory. No country in the world is rich enough to have a free gold standard. All countries
nowadays have paper currencies. According to this theory the rate of exchange between two
countries depend upon the relative purchasing powers of their respective currencies. Such will be
the rate which will equate the two purchasing powers.
For example if a certain assortment of goods can be purchased for 1 in Britain and a Similar
assortment of goods with Rs. 16 in Pakistan then the purchasing power of 1 is equal to the
purchasing power of Rs. 16. Thus the rate of exchange according to purchasing power parity
theory will be
1 = Rs.16
Foreign Exchange
January 29, 2013 Answers, Banking, HSC Part-2 ( XII ), Intermediate
Foreign Exchange
Q.26. How does a country controls its foreign exchange?
METHODS OF EXCHANGE CONTROL
Paul Einzig is his book exchange controls has mentioned as many as 41 different methods of
exchange control. They can be categorized as
1. Direct Method
2. Indirect Method
They are discussed here as under.
1. DIRECT METHOD
The direct method are further classified as:
Intervention
For an effective control of foreign exchange rates and the foreign exchange market the
government usually have a central authority i.e. the Central Bank that has the complete power to
control and regulate the foreign exchange market. Under this method any body who either wants
to purchase or sell foreign exchange he has to deal with the central bank. All the selling and
purchasing transactions of foreign exchange is controlled by the central bank which helps it to
adjust demand and supply of foreign exchange according to the need of the country.
Restriction
Exchange restriction is another powerful weapon of exchange control. It refers to the policy by
which the government restricts the supply of its currencies coming into the exchange market. It is
achieved either by one of the following methods.
i. By centralizing all trading in foreign exchange with central bank of the country.
ii. To prevent the exchange of national currency against foreign currency with the permission of
the government.
iii. By making all foreign exchange transactions through the agency of the government.
Exchange Clearing Agreement
Under this method the countries engaged in trade pay to their respective central bank the
amounts payable to their respective foreign creditors. The central banks they use the money in
off setting the corresponding claims after fixing the value of the foreign currencies by common
agreement. The basic principle is to offset international payments so that they have not to be
settled through the medium of the foreign exchange market.
2. INDIRECT METHODS
The most commonly used direct method or tool of exchange control is the use of tariff duties and
quotes and other quantative restrictions on the volume of international trade. By imposing tariff
and quotes the demand for the foreign currency falls down in the case of restricting the imports.
Rate of Interest
Another method of indirect exchange is the rate interest. The rate of exchange is the result of
demand and supply of each other currencies arising out of trade and capital movement. A high
rate of interest in a country attracts short term capital from other countries that leads to a
exchange rate for the currency in terms of other currencies goes up.
ECONOMICS
Monopoly
Monopoly
Monopoly is that market from in which the single producer controls the whole supply of a single
commodity that has no close substitutes.
Two points must be noted in regard to the definition. First there must be an individual owner it
seller if. There will be monopoly. That single producer may be individual owner or group of
partners or a joint stock company or any other combination of producers of the state. Hence there
must be a sole producer or seller in the market if it is to be called monopoly.
Secondly, the commodity produced by the producer must have no close substitutes. Competing if
he is to be called a monopolist this ensures that there must no rival of the monopolist. By the
absence of closer substitutes we mean that there are no other firms producing similar products or
product varying only slightly from that of the monopolist.
The above two conditions ensure that the monopolist can set the price of his product and can
pursue an independent price policy.
POWER TO INFLUENCE PRICE IS THE VERY ESSENCE OF MONOPOLY.
Market Price
January 28, 2013 Answers, HSC Part-1 ( XI ), Intermediate, Principles of Economics
Market Price
Market Price
Market price is the actual price that prevails in the market at any particular time. It never remains
constant. It changes from day to day and even from moment to moment. It can change at any
time at any moment.
Determination of Market Price
Market price is determined by the relative forces of demand and supply. The demand depends
upon the satisfaction, which a consumer drives from the consumption of the commodity. Supply
on the other hand depends upon the cost of production of the commodity. The consumer tries to
achieve more and more satisfaction least possible expenditure. He does not pay more than the
marginal utility of the commodity to him the seller on the other hand tries to maximize his profit
by changing as much as he can. He will never accept the price which is less than the marginal
cost of production of the commodity and thus marginal utility and marginal cost pf production
are the two limits the maximum and the minimum and price is determined between these two
limits, so we can say that,
The price is determined at point where the amounts demanded and offered for sale are equal.
Trade Union
Trade Union
Trade Union
Modern industrialization has given rise to a great number of problems. As a result there has been
a clash between the interests of labour and organization, the former claming high wages and
latter high profits. Today labour has come to realize that they can improve their conditions of
work only through collective bargaining with the employers. In the words of Sydney and Webb
A trade union is a continuous association of wage earners for improving the conditions of their
working lives.
Fraternal function consists of mutual help for the welfare of the workers. Under this content the
trade unions perform the following functions.
Professional Training
Trade unions arrange for education and professional training opportunities training opportunities
for their workers and also assist them in improving their efficiency and skill.
Source of Information
Trade unions serve as a source of information for the workers. The workers are guided and
advised by the trade unions. Their leaders defuse information by organizing meetings of the
workers.
Insurance Facilities
The trade unions also arrange for insurance facilities against risks, accidents etc. they make the
workmen compensation act followed in this regard.
3. Political Functions
Many trade unions fight elections to the rights. In many countries strong; labour parties have
grown up and in England especially there has been the government in the hands of labour party
many times. The trade unions influence the labour party of the government and often clench
some labour seats in the legislature.
Market
January 28, 2013 Answers, HSC Part-1 ( XI ), Intermediate, Principles of Economics
Market
Market
In ordinary language market means a place where things are bought and sold, but in Economics
the market does not mean a particular place or bazar, it only means a commodity and a group of
buyers and sellers of the same. Thus we speak of cotton market or share market etc. Same are
willing to buy and others are willing to sell. The buyers and sellers can with one another by
verbal, by letter, telephone, internet etc but place does not matter.
Classification of Market
Categories of market are:
1. Perfect market
2. Imperfect market
Again categories are classified into:
Market on the Basis of Time
On the basis of time market could be classified into the following kinds:
1. Dayto-Day Market
This type of market is concerned with goods that are perishable like milk, fish, vegetable, fruits
etc. The price in this market is determined by the demand of the market. If the demand expands
the period is short that the supply cant be increased immediately at all, therefore the price will
increase similarly if demand decrease the time is so short that the surplus supply cant be stored
due to the perishability of the goods, obviously the price will decrease.
2. Short Period Market
It is the market when time allows supply to adjust with the demand of the market to the extent of
available size of the firm or producing units. For example: If market demand is so goods per day
and particular firm of the same goods could produce max: 100 units by using its full production
capacity .If demand increases from 50 to 75 units the firm can supply utilising the unused
capacity, but if demand becomes 120 it cant be satisfied by existing production capacity because
total size of firm is 100 units per day.
3. Long Period Market
When the period is so long that the supply can adjust with the demand of the market by changing
the size of the firm. If the demand of the market increases immediately the prices will also
increase. This increase of price will expand the margin of profits of the producers therefore the
firm can increase the production through employing more labor, more machines , raw material
etc. By increasing supply reduces the increased prices and they come again on the previous
point. Similarly if demand falls the price also decrease and producers curtail their production due
to decrease in margin of profits. As consequence of curtail in production the depressed price goes
up again on the previous point.
Market on the Basis of Location
Markets can be classified on the basis of location.
1. Local Market
If the goods are sold and purchased in a limited area is called local market. For example: If the
goods produced in Karachi are sold in Landhi or Malir, it will be the example of local market.
Local market generally is concerned with the perishable good like milk, fish, bricks etc.
2. National Market
This is the kind of the market which covers the whole of the country. For example: the textiles of
Karachi are sold in all the four provinces of Pakistan. Similarly sports goods produced in Sialkot
are supplied in whole the country.
3. International Market
When the goods produced locally are sold in all the countries of the world is called International
market. For example: the cars produced in Japan are sold in whole of the world. The buyers and
sellers from all over the world compete with one another therefore prices are influenced by the
world environment.
Market on the Basis of Nature of Goods
1. General Market
Market is said to be general where not a specific but general goods are sold and purchased. For
example: if cloth, pots, shoes, vegetable, fruit are sold at a time it will be called general market.
2. Specialised Market
In this market special or specific goods are brought to sale in this kind of the market. For
example: grains are sold in grain market similarly fruits are sold and purchased in fruit market.
These markets provide facility to the buyers that they could purchase goods of their
It must however be recognized that it is the final expenditure only which must be counted and
not the immediate expenditure.
Principles of Economics
Economics is an influential introductory textbook by American economists Paul Samuelson and
William Nordhaus. It was first published in 1948, and has appeared in nineteen different editions,
the most recent in 2010. It was the best selling economics textbook for many decades and still
remains popular, selling over 300,000 copies of each edition from 1961 through 1976. The book
has been translated into forty-one languages and in total has sold over four million copies.
Principles of Economics
o Concept
o Origin of the word Economics
o Early Definitions of Economics
o Smiths Definition of Economics
o Marshals Definition of Economics
o Robbins Definition of Economics
o Comparison of Marshalls and Robbins Definitions of Economics
o Scope of Economics
o Meaning of Land
o Characteristics of Land
o Definition
o Capital and Wealth
o Formation of Capital
o Importance of Capital
o Efficiency of Labour
o Characteristics of Labour
o Factors Determining Efficiency of Labour
o Division of Labour
o Mobility of Labour
o Criticism
o Definition of Marginal Utility
o Law for Equi-Marginal Utility
o Introduction of Law of Demand
o Demand Schedule
o Demand Curve
o Elasticity of Demand
o Measurment of Elasticity
o Malthusian Theory of Population
o Propositions of The Theory
o Economics of Scale
o Laws of Returns
o Importance
o Price Determines the Demand
o Monopoly
o Market Price
o Definition of National Income
o Concepts of National Income
o Methods of Calculating National Income
o Difficulties Faced while Calculating National Income
o Importance of National Income Computation in Modern Economic Analysis
o Definition of Rent
o Recardian Theory of Rent
o Quasi Rent
o Modern Theory of Rent
o Wages and Its Forms
o Why Interest is Paid?
o Factors Determining Real Wages
o Relative Wages
o Causes of Differences
o Interest, Gross Interest and Net Interest
o Constituents of Gross Interest
o Liquidity Preference Theory