Economics-For Managers


ICMR India ICMR India ICMR India ICMR India RSS Feed

Img: 1 2 3


Pages : 263;Paperback;
210 X 275 mm approx.

Detail Table of Contents

Click below to view
HTML            PDF

Pages : 250;Paperback;
210 X 275 mm approx.


Textbook Price: Rs. 600;
Workbook Price: Rs. 700;
Available only in INDIA

Buy Now

Please allow 5 to 10 days for delivery.

Economics For Managers, Management Textbook, Workbook

Macroeconomics : Consumption and Investment Function : Chapter 13

An economy can reach equilibrium without government intervention, with government intervention, and with trade. Consumption is important to determine the aggregate demand in an economy. According to the Engel's Law, the amount spent on food and other necessities falls as the income rises. A country's consumption expenditures rise as incomes rise. The Keynesian theory explains how consumption and investment can help the economy reach equilibrium. Savings and investment can also help the economy reach an equilibrium. An increase in savings leads to a decrease in national product whereas an increase in investment demand leads to an increase in national product. When savings equal investments, the economy reaches its equilibrium point. Keynes believed that government intervention can reduce the level of unemployment. When the economy has high unemployment levels, the government can take fiscal measures to reduce unemployment. Government can increase aggregate demand during recessions by increasing its spending or decreasing the tax rate. An increase in aggregate demand will have a multiplier effect on the economy.

Government spending will create employment opportunities in the economy and this in turn will increase the disposable income and consumption in the economy.

Government has to increase taxes to fund the spending. However, an increase in taxes will reduce the purchasing power of the people and consumption will suffer. Thus, during a recession, government spending should increase without an increase in taxes. Government can increase spending during recessions by borrowing.

During period of high inflation, government has to reduce spending. The inflationary gap can be reduced by imposing higher taxes. Imposition of higher taxes reduces the disposable income of the people and consequently consumption. Taxes can be imposed in two forms: lumpsum and proportional.


Chapter 13 : Overview

Circular Flow Of Income
Circular Flow of Income in the Two Sector Model without Savings
Circular Flow of Income in the Two Sector Model with Savings
Circular Flow of Income in a Three Sector Economy
Circular Flow of Income in a Four Sector Economy

Factors Affecting The Size Of A Nation's Income
Approaches To Measure National Income
Product Approach
Income Approach
Expenditure Approach

Measures Of Aggregate Income
Gross and Net Concepts
Domestic and National Concepts
Market Prices and Factor Cost
Aggregate Income Measures
Nominal and Real GDP
The GDP Deflator
Personal Income
Disposable Income

Difficulties In Measuring National Income
The Uses Of National Income Statistics