Day: October 22, 2020

All countries suffer unemployment but most developing countries experience it at relatively higher degree and the following can be some of the types and causes: i) Transitional unemployment:- Transitional unemployment is that situation which prevails due to some temporary reasons. Read More …

Unemployment generally refers to a state/situation where factors of production (resources) are readily available and capable of being utilized at the ruling market returns/rewards but they are either underemployed or completely unengaged. When referring to labour, unemployment is considered to Read More …

Refers to the minimum rate of interest payable to persons to persuade them to part with money in terms of savings or investment i.e. interest being the payment for the loss of liquidity. It inversely relates the speculative demand for Read More …

Commercial banks “create” credit through a process known as credit creation. Credit creation is definedas a process by which commercial banks advance loans from deposits net of a statutory cash ratio requirement. This involves lending out money (from deposits) at Read More …

The Central Bank Governments need to hold their funds in an account into which they can make deposits and against which they can draw cheques. Such government deposits are usually held by the Central Bank. Commercial banks need a place Read More …

An expansionary monetary policy is to do with an increase in money supply which tends to have the following effects on an economy: Inflationary tendencies – an increase in money supply arising from an expansionary monetary policy such as a Read More …

The Transaction Motive A certain amount of money is needed for everyday requirements, the purchase of food and clothing and other ordinary expenses. How much is necessary to hold for these purposes will depend on 3 factors. A person’s income Read More …

Medium of exchange: Money facilitates the exchange of goods and services in the economy. Workers accept money for their wages because they know that money can be exchanged for all the different things they will need. Use of money as Read More …

The ability and freedom of the consumer to determine the fundamental resource allocation decisions is limited by the following factors: Nature of the economic system – In general, the consumer is more sovereign in a free market oriented system where Read More …

Consumer Sovereignty is the willingness, ability and freedom of the consumer to largely influence the fundamental economic decisions of resource allocation. The consumer‟s willingness and ability to spend on goods and services is an indication to producers (firms) of what, Read More …