Knowing the determinants of consumption expenditure is essential. Governments often look for ways to stimulate consumption to encourage economic growth. Consumer spending is a significant driving force in the economies of several
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Customer
Customers are parties who buy goods or services directly. They can be individuals, businesses, organizations, or governments, depending on their target market. They can also come from internal (such as employees and shareholders) and
Employees: Their Influence on the Company
Employees are people who do tasks based on the direction of the manager. They do daily tasks according to job descriptions. In return, they get wages or salaries. In addition to higher salaries, their interests in the company
How elasticity affects total revenue
Before answering how elasticity affects total revenue, you need to recall the following concepts in economics: Own-price elasticity of demand. It measures the responsiveness of changes in quantity demanded when prices change. Demand is
How substitution affects elasticity?
The presence of substitution affects elasticity because it provides alternative choices in consuming products or services If a substitute product is available, consumers tend to turn to these alternative products when the price of a
The real reason why the central bank intervenes the foreign exchange market
A stable exchange rate is one of the macroeconomic goals. In the flexible exchange regime, the exchange rate of the domestic currency continues to move, influenced by fundamental factors such as demand and supply and speculative factors.
Why is capitalism said to widen greater economic inequality?
Economic growth under capitalism may far exceed the growth of other economic systems. However, often, this system produces widening inequality or economic inequality. The accumulation of private capital is inevitable. This
How are the production possibility curve and the opportunity cost interrelated?
The production possibility curve or production possibility frontier is a graphical representation that shows the combination of outputs that might be produced by the economy using available production factors and production
Hidden Unemployment: Types, Causes, Effects on the Economy
Hidden unemployment refers to people who are unemployed, but not reflected in official unemployment rates. It includes those who stopped looking for work due to discouragement and those who worked but were underused. Sometimes, the term
What are the key drivers of economic growth according to Keynes?
Economist John Maynard Keynes spearheaded a revolution in economic thought. His argument overturned the idea prevailing at the time, namely that the free market would always automatically bring the economy into full employment. The great
Why do economists’ opinions often contradict?
Economists often offer conflicting suggestions regarding certain economic phenomena either because of differences in scientific judgment or because of differences in values. At other times, economists share the same view in the advice they
Galloping Inflation
Galloping inflation refers to a condition when the inflation rate is extraordinarily high. It is perhaps 20%, 50%, or even higher on an annual basis. In this period, out of control inflation exacerbates an economic recession. Some countries
Defensive marketing
Defensive marketing is a marketing strategy that focuses on protecting the market position rather than expanding the market. It is a common strategy for long-established companies in the market. Companies must maintain the current product
Labor dispute
The labor dispute is a controversy between management and labor over the terms and conditions of the workplace. Disputes are common in the labor market. They can take many aspects of the work environment, including working conditions, hours
Labor Cost Ratio
Labor cost ratio is equal to direct labor cost divided by total sales, expressed as a percentage. The ratio shows us labor contributions to produce each sales dollar. Salaries typically account for a large portion of costs. Therefore, by
Labor Cost Ratio
Labor cost ratio is equal to direct labor cost divided by total sales, expressed as a percentage. The ratio shows us labor contributions to produce each sales dollar. Salaries typically account for a large portion of costs. Therefore, by