Definition: The Price and Wage are the direct measures used to control inflation. In situations, where both the monetary and fiscal policy stands inadequate the price and wage control method is used to tame the situation. The price and wage control are studied conjointly because whatever is the cause of initial inflation, the cost-push and price-push inflation go together. … [Read more...] about Price and Wage Control
Search Results for: inflation
Monetary Over-Investment Theory
Definition: The Monetary Over-Investment Theory posits that imbalance between the actual and desired investments, i.e. actual investments exceeding the desired investments, explain the fluctuations in the economic activities. The monetary over-investment theory was proposed by Hayek, who stresses that in order to maintain economy’s equilibrium the pattern of investments … [Read more...] about Monetary Over-Investment Theory
Historical Cost
Definition: The assets and liabilities recorded in the balance sheet with its original acquisition cost, the i.e. amount spent at the time of its acquisition are called as the Historical Cost. In other words, the historical cost is an accounting method in which the assets of the firm are recorded in the books of accounts at the same value at which it was first purchased. The … [Read more...] about Historical Cost
Economic Factors Influencing Consumer Behavior
Definition: The Economic Factors are the factors that talk about the level of sales in the market and the financial position of the consumer, i.e. how much an individual spends on the purchase of goods and services that contribute to the overall sales of the company. The following are the main economic factors that greatly influence the consumer buying behavior: … [Read more...] about Economic Factors Influencing Consumer Behavior
Cyclical Unemployment
Definition: The Cyclical Unemployment refers to the change in the employment rate due to the change in the economic cycle, such as recession and inflation. Simply, the change in employment due to the fundamental shifts in the economy is called as cyclical unemployment. The economy suffers several ups and downs and has a direct impact on the employment rate. During a … [Read more...] about Cyclical Unemployment
Sales Forecasting
Definition: Sales Forecasting is the projection of customer demand for the goods and services over a period of time. In other words, it is the process that involves the estimation of sales in a physical unit that a company expects within a plan period. There are a variety of methods available to the firm for forecasting sales or demand of a company; these are listed … [Read more...] about Sales Forecasting
Monetised Deficit
Definition: The Monetised Deficit is the extent to which the RBI helps the central government in its borrowing programme. In other words, monetised deficit means the increase in the net RBI credit to the central government, such that the monetary needs of the government could be met easily. The monetized deficit results in the increase in the net holdings of treasury bills … [Read more...] about Monetised Deficit
Fiscal Deficit
Definition: Fiscal Deficit refers to the financial situation wherein the government’s total budget exceeds the total receipts excluding borrowings made during the fiscal year. Thus, it can be expressed as: Fiscal Deficit = Total Expenditure – Total Receipts Excluding Borrowings Through Fiscal deficit, the government can determine the amount that needs to be borrowed in … [Read more...] about Fiscal Deficit
Revenue Deficit
Definition: The Revenue deficit refers to the financial position wherein the government’s revenue expenditure exceeds its total revenue receipts. This means that government’s own earnings are not sufficient to meet the day-to-day functioning of its departments and other provisions of services. The revenue deficit is only concerned with the revenue receipts and the revenue … [Read more...] about Revenue Deficit
Budget Deficit
Definition: The Budget Deficit is the financial situation wherein the expenditures exceed the revenues. The Budget Deficit generally relates to the government’s expenditure and not the business or individual’s spending. The government’s collective deficits are termed as “National Debt”. In the case of a budget deficit, be it the Government or any business, it has to resort … [Read more...] about Budget Deficit