Relative Income Hypothesis How Social Comparison Shapes Consumption Why do two families earning the exact same income spend such different amounts on consumption? Why does a household that loses part
Saving Function Definition The saving function shows the functional relationship between saving and disposable income. It tells us how much a household wants to save at a given income level.
What is Portfolio? Portfolio is a collection of financial assets owned by an individual or institution, such as stocks, bonds, cash, mutual funds, real estate, commodities, and other investments. Diversification
What is Sensitivity Analysis? Sensitivity analysis is a financial modelling technique used to determine how key input variables affect the outcome of a model or decision under certain assumptions. It
Origins of Development Economics Post World War II Destruction Modern development economics emerged from countries devastated by WWII — there was an urgent need for theories and policies to rebuild
Core Values of Development Sustenance: Sustenance is the ability to meet life-sustaining basic needs like food, clothing, shelter, health, and protection. It is the minimum level required for a good
Health, Education, and Economic Development Health and Education as Objectives of Development Education and health are basic objectives of development; they are important ends in themselves. Health is central to
Short Questions Cash flow refers to the movement of money into and out of a business, project, or individual account over a specific period. For example, Revenue from sales of
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
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
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
Econometrics: Literally, the word econometrics means economic measurement or the measurement of economic relationships. According to Goldberger: Econometrics may be defined as the social science in which the tools of economic theory, mathematics
Short Questions Absolute poverty is the situation of being unable or only barely able to meet the basic needs of life such as food, clothing, shelter, and basic health care.
Short Questions Consumption is that part of disposable Income which is spent on consumer goods and services. The relationship between consumption and income is represented by consumption function written as
LQ.1. Explain the law of diminishing utility. Illustrate your answer with appropriate diagrams. Discuss also the assumptions and limitations of this law. Law of Diminishing Marginal utility (Gossen’s First Law)
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