Arc elasticity is a measure of how much one variable changes in response to a change in another variable, and is calculated as the percentage change in the dependent variable divided by the percentage change in the independent variable. It is often used to measure the responsiveness of demand or supply to changes in price. … Read more
Economic depreciation is the deterioration in the value of a good or asset due to its normal wear and tear or obsolescence. The rate of economic depreciation can be measured by the amount of revenue that a company loses due to the deterioration of its assets. What are 2 different types of depreciation? 1. Depreciation … Read more
Disinflation is a decrease in the rate of inflation – a measure of the average price level of goods and services in an economy. It is the opposite of inflation, which is an increase in the price level. There are two types of disinflation: – Demand-pull disinflation occurs when aggregate demand in an economy grows … Read more
Classical economics is a school of thought that arose during the 18th century that believed in laissez faire economic policies. Its main proponents were Adam Smith, David Ricardo and John Stuart Mill. What are the assumptions of classical economics? In general, classical economics assumes that economic actors are rational and act in their own best … Read more
. Business Cycle: What It Is, the 4 Phases, and How to Measure It. What are the 4 phases of business? 1. The first phase of business is the startup phase. This is when a new business is launched and is typically characterized by high levels of uncertainty and risk. 2. The second phase of … Read more
Keynesian Economics Theory: What It Is and How to Use It Did Keynes believe in free-market? No, Keynes did not believe in free-market. He was a strong advocate for government intervention in the economy in order to correct market failures and promote economic growth. What are the 3 major theories of economics? The three major … Read more
Adverse Selection: What It Is, How It Works, and The Lemons Problem Why is adverse selection important? Adverse selection is important because it can lead to higher prices and lower output in markets. It can also lead to a lack of competition in markets, and to higher costs for consumers. How can we solve the … Read more
Externality: What It Means in Economics An externality is an effect of an economic activity on a third party that is not directly involved in the activity. What is positive externalities with examples? Externalities are defined as the spillover effects of one person’s actions on the well-being of another person. Positive externalities refer to the … Read more
The Marginal Propensity To Import (MPM) is defined as the amount by which imports increase when disposable income rises by one unit. In other words, it is the ratio of change in imports to the change in disposable income. The MPM is used to measure the sensitivity of imports to changes in disposable income. A … Read more
A yuppie is a young professional who has a well-paying job and who lives in an affluent area. Yuppies are often associated with an active lifestyle and a desire for material possessions. What was the Strategic Defense Initiative Apush? The Strategic Defense Initiative (SDI) was a proposed missile defense system intended to protect the United … Read more
