Economy

Important Curves & Graphs in Economics Engel Curve The Engel curve is a graphical depiction of how income changes the demand for a good. Rahn Curve It displays the relationship between government spending (on the horizontal) and GDP growth rate … Continue reading →

Important Curves & Graphs in Economics Laffer Curve The Laffer curve displays the relationship between tax rates and tax revenue collected by governments. It’s often used to illustrate the argument that cutting tax rates can result in increased total tax … Continue reading →

Important Curves & Graphs in Economics Environmental Kuznets Curve The environmental Kuznets curve suggests that economic development initially leads to a deterioration in the environment, but after a certain level of economic growth, a society begins to improve its relationship … Continue reading →

Important Curves & Graphs in Economics Kuznets Curve A Kuznets curve is a graphical representation of market forces and income as and when an economy develops. The Kuznets curve was first developed by economist Simon Kuznets in the 1950s and … Continue reading →

Shapes of Economic Recovery L–shaped recovery An L–shaped recovery is a type of recovery characterized by a slow rate of recovery, with persistent unemployment and stagnant economic growth.  L-shaped recoveries occur following an economic recession characterized by a more-or-less steep … Continue reading →

Business Cycle The business cycle is the rise and fall of economic activities that occur over time in an economy. It is also referred to as an ‘economic cycle’ or ‘trade cycle’. It is an alternate expansion and contraction in … Continue reading →

WPI  vs CPI Elements Wholesale Price Index (WPI) Consumer Price Index (CPI) Definition Wholesale Price Index is a measure of the average change in the price of goods at a wholesale level or in the wholesale market. Consumer Price Index … Continue reading →

Inflation Related Terms Deflation: It is the general fall in the price level over a period of time Disinflation: It is the fall in the rate of price increase or a slower rate of inflation. Example: a fall in the inflation rate … Continue reading →

Inflation Inflation refers to the rise in the prices of most goods and services of daily or common use, such as food, clothing, housing, recreation, transport, consumer staples, etc. Types of Inflation Based on Cause Demand Pull Inflation Demand pull … Continue reading →

Terms Related to Public Finance Crowding Out Effect: The crowding out effect occurs when increased government spending or borrowing leads to a reduction in private sector investment. Fiscal Drag: Situation where inflation pushes income into a higher tax bracket. The result … Continue reading →