Walras’s Law is a fundamental principle of economics that states that, in an equilibrium market, the total amount of money exchanged must be equal to the total amount of goods and services exchanged. The law is named after French economist Léon Walras, who first proposed it in his 1874 work Elements of Pure Economics. In … Read more
A steady state economy is an economic system in which the level of production of goods and services remains constant. The term can refer to: * A national or global economy with stable or mildly fluctuating levels of aggregate output ( gross domestic product) and employment; * An economy with no or very low economic … Read more
What is a Term of Trade (TOT)? How is a Term of Trade (TOT) Used as an Indicator? What are the Factors that Affect a Term of Trade (TOT)? Where does the word tot come from? The word “tot” is derived from the Old English word “tott,” meaning “small amount.” This word likely came into … Read more
The acceleration principle definition states that the economic development of a country is dependent on the rate of change in the productivity of capital. This principle is used to assess the impact of different economic policies on the rate of economic growth. What is the concept of multiplier and acceleration? In economics, the multiplier is … Read more
What is a bureaucracy and how does it work? Examples included. Who is an example of a bureaucratic leader? Bureaucratic leaders are those who follow the rules and regulations of an organization to the letter. They are often seen as inflexible and unresponsive to change. A good example of a bureaucratic leader would be a … Read more
A currency revaluation is an official increase in the value of a country’s currency. Currency revaluations usually happen when a country’s currency is undervalued relative to other currencies. A currency revaluation can also happen when a country’s currency is overvalued relative to other currencies. What is difference between conversion and translation? The main difference between … Read more
Devaluation: What It Is, How It Works, and Examples What is the difference between devaluation and depreciation? The main difference between devaluation and depreciation is that devaluation is a deliberate decision by a country’s government to lower the value of its currency in order to make its exports more competitive, while depreciation is a natural … Read more
Raw materials are defined as any materials or substances used in the manufacturing or production process of a finished good. Raw materials can be either natural or man-made, and are often categorized as either direct or indirect. Direct raw materials are those that are used in the production process without any further processing or refinement. … Read more
The goodness-of-fit test is a statistical test that is used to assess how well a model fits a dataset. The test measures the discrepancy between the model and the data, and is often used to assess the fit of a model to data. The test can be used to assess the goodness-of-fit of a model … Read more
A free market is defined as an economic system in which the prices for goods and services are determined by the open market and not by the government. The impact of the free market on the economy is mostly positive. The free market encourages competition, which leads to lower prices for consumers and higher quality … Read more
