March 25, 2026
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What is Capital Budgeting? Capital Budgeting is the process of evaluating and selecting long-term investment projects that involve significant capital expenditures such as purchasing new machinery, expanding production facilities, or launching new products. It compares costs and benefits of projects to determine its long-term profitability. Some of the most common
What is Cost Benefit Analysis (CBA)? Cost Benefit Analysis (CBA) is a process that’s used to determine the profitability of a project by estimating and comparing its costs and benefits measured in monetary terms after adjusting for the time value of money. Objectives of Cost Benefit Analysis To determine the
In this post we will discuss measures of poverty and inequality. What is Poverty? Poverty can be defined in two ways, absolute poverty and relative poverty. In ordinary language when we ask about poverty, we often mean absolute poverty. But what it is? United Nations define poverty as: A condition
Goodness of Fit So far, we have no way of measuring how well the explanatory or independent variable, X, explains the dependent variable, Y. In other words, we must know how well the OLS regression line fits the data. Are the observations tightly clustered around the regression line, or are
What is Money? Money can be defined as any asset or commodity that is widely accepted for the exchange of goods and services. The word “Money” is derived from the Latin word “Moneta”. According to Mankiw: Money is the stock of assets that can be readily used to make transactions.
LQ1 – Define project life cycle. Explain different stages of project lifecycle in detail. Project Project is an interrelated set of activities undertaken to achieve a specific objective. It is unique and temporary in nature with a defined beginning and end. Examples, bridge construction project, developing a new product, building
Theory of Consumer Demand The theory of consumer demand explains how consumers make choices about what goods and services to purchase and how much to spend, given their preferences, income, and prices. This theory helps us understand how consumers allocate their limited resources to maximize their satisfaction or utility. Important
Introduction to Microeconomic Household Fertility Theory The 3rd stage of Demographic Transition Theory marks the decline of birth rate with the increase in level of economic development. To explain this decline in birth rate we use Microeconomic Household Fertility Theory which is the application of consumer behavior in microeconomics. Microeconomic Household
Inflation Inflation is a sustained increase in the general price level of goods and services in an economy over time. When the general price level increases purchasing power of money decreases and each unit of money buys fewer goods and services. Thus, money losses its value. Prof. Coulborn defines inflation
In the previous post we study about Demographic Transition Theory. In this post we will discuss Introduction to Malthus Population Theory Thomas Malthus examined the relationship between population growth and food supply in his essay “The Principle of Population” in 1798. This theory has two core principles: Core Principles of Malthusian
In this post we will discuss the concepts of nominal GDP, real GDP, GDP deflator and inflation. Before going forward we must know what GDP is? Gross Domestic Product is the total market value of all final goods and services produced within a country in a year. To see more
In the previous couple of blogs, we discussed the Lewis Theory of Economic Development and International Dependence Model. In this blog our focus is on neoclassical long run economic growth model. Introduction of Solow Model of Economic Growth The Solow model of economic growth is a well-known Neoclassical exogenous growth model
Explore key Pakistan Economic Datasets. Pakistan Social and Living Standard Measurement (PSLM) Household Integrated Economic Survey (HIES) Pakistan Demographic Survey (PDS) Population and Housing Census Pakistan Economic Survey (PES) Handbook of Statistics on Pakistan Economy 2020 Pakistan Annual GDP Data by Sectors Since 1990 Pakistan M2 Monthly Data Since 2008
Introduction to Demographic Transition Theory Demographic Transition Theory (DTT) explains how population growth changes as countries move from traditional agrarian economies to modern industrial societies. The theory highlights long-term shifts in birth rates, death rates, and population growth, showing that development transforms population dynamics over time. Early societies experienced high