Effective Demand The starting point of Keynes theory of employment and income is the principle of effective demand. Effective demand denotes money actually spent by the people on products of industry. The money which entrepreneurs receive is paid in the form of rent, wages, interest and profit. Therefore effective demand equals national income. An increase […]
Tag: importance of national economy
Classical theory of employment – Economics Studymaterial
Classical Theory of Employment There was no single theory which could be labeled as classical theory of employment. The classical theory of employment is composed of different views of classical economists on the issue of income and employment in the economy. Adam smith wrote the book “An Enquiry into the Nature and Causes of the […]
Importance of Analysing National Income – National economy of a country – Studymaterial
National income is of great importance for the economy of a country. Nowadays the national income is regarded as accounts of the economy, which are known as social accounts. It enables us 1. To know the relative importance of the various sectors of the economy and their contribution towards national income; from the calculation of […]