What is Regression Analysis ?

Econometrics, Regression Analysis

What is Regression Analysis? Regression analysis is a statistical technique used to examine and quantify the relationship between variables. In economics and econometrics, it allows us to move beyond describing a relationship in words and instead estimate it...

Introduction to Taxes and its Types

Macroeconomics, Taxes

What comes in your mind when you hear or see the word “Tax” in your daily life discussions or on some news channel on T.V , newspapers etc ?. Have you ever thought how the Government gets financed and they pay salaries to employees ? Or pay pensions to retired...

What are Index Numbers ?

Index Numbers, Statistics

Introduction Often we want to know how certain variables like prices, production, etc. have changed over time and space. For example, we may like to compare the change in the average retail price of milk in 1985 with that in 1982 or we may like to compare the retail...

Multiplier Effect Definition,Calculation and Types

Macroeconomics, Multiplier Effect

The multiplier effect shows by how much final national income increases following an initial injection of spending or investment into the economy. How Does the Multiplier Effect Work? When money is injected into an economy — say, through government spending — it does...

What is GDP Per Capita and how is it calculated ?

Gross Domestic Product (GDP)

What is GDP Per Capita? GDP per capita is one of the most widely used indicators of a country’s standard of living and economic performance. It tells us, on average, how much economic output each person in a country is responsible for producing — or...

Commodity Money vs Fiat Money

Macroeconomics, Money

There has been numerous stories about exchanges of goods as a form of money in different circumstances . Like there were Cigarettes used in WWII by the prisoner of War camps, beads used by north american Indians , cattle in south Africa, and small green scraps of...

Major problem with using GDP

Gross Domestic Product (GDP), Macroeconomics, Misc

GDP is considered to be the most simplest and common economic statistics that measures the economic activity of the economy that takes place within a year – that leads to the analysis and conditions of various factors such as investments, household consumption ,...

Difference between aggregate supply and market supply curve

Aggregate Demand and Supply, Macroeconomics

By definition, the Aggregate Supply curve shows the relationship between the Aggregate Quantity Supplied by all the businesses and firms of an economy and the over price level. Study smarterAggregate supply, market structures and the whole AD-AS framework are...

What is Money ?

Macroeconomics, Money

To explain it with a formal definition Money is : Anything that is accepted as a way of exchange to buy products and services The basics mechanics of the whole monetray system are invisible. Many individuals take money for granted when they are spending it. So when...

Shifts in Aggregate Demand Curve

Aggregate Demand and Supply, Macroeconomics

We just assumed that the Monetary and fiscal policy variable are kept constant when deriving the Aggregate Demand Curve. So any changes made in the following variable will shift the curve. Money Supply Consumption (household spending) Investment Government Expenditure...