1. Population: It is assumed that the population of whatever unit considered e.g family, nation, etc. remains the same, when the change in price takes place. It is also assumed that the age and sex composition of population remains the…
1. Population: It is assumed that the population of whatever unit considered e.g family, nation, etc. remains the same, when the change in price takes place. It is also assumed that the age and sex composition of population remains the…
1] A desire to possess a commodity – A desire is a wish to acquire something, it may or may not be accompanied by the effective means to fulfill it. He may or may not be able to buy it.…
1] Joint demand – Joint demand is also known as complementary demand. When more than one commodity is used to satisfy the same want these commodities are known as complements of each other. A change in demand of one commodities…
In ordinary language, the two terms ‘demand’ and ‘desire’ are used as synonyms. A desire is an individual’s wish for something he may or may not be able to buy. In economics, “demand is the desire backed by the willingness…
The law of diminishing marginal utility has been put forward by Dr Alfred Marshall in his book “ Principles of economics ” published in 1890. According to him , utility is “the want satisfying capacity of a commodity” that diminishes…
Though macro economics is essential in economic analysis and has a great practical and theoretical importance, it suffers from certain drawbacks or limitations. The main limitations of macro economics are (1) The macro economies deals with general welfare and disregards…
Macroeconomics occupies a significant place in economic analysis and has a lot of theoretical and practical importance. The importance of macro-economics can be understood from the following points: i) POLICY FORMULATION: Macroeconomics plays a very important role in formulating economic…
1) Unit of study / nature of analysis – Aggregate and Macroscopic. Macro-Economics deals with the study of Economy as a whole. It is concerned with the aggregate concepts such as National Income, National Output, National Employment, General level of…
The whole content of macroeconomic theory can be presented with the help of the following chart.