## Keynesian Theory of Interest Rate ( Liquidity Preference )

Theories of interest rate determination are very important in economics. We have already discussed the classical theory of interest rate. Today we are discussing the Keynesian theory of interest rate. we can also call this theory as  Liquidity Preference theory. According to Keynes, the interest rate is not given for the saving i.e. hoarding. The…

## Types of Taxes

Tax As we know that the most important source of revenue for the government is the tax. So, we can define it as a compulsory payment which an individual or companies have to pay on their income, property, expenditures, or earned profits. Types of Taxes There are basically three types of taxes levied upon taxpayers….

## Cross Elasticity of Demand Explanation-Types & Measurements

Cross Elasticity of demand is the responsiveness of quantity demanded of Good A as a result of the change in the price of good B (i.e. related goods). This often occurs where the quantity demanded changes as a result of the change in the prices of its substitutes or complementary products. Measurement of Cross Elasticity…

## Marginal Productivity Theory of Distribution -Explanation

Marginal productivity theory of distribution in economics has its own importance.in fact, the theory of distribution is very important for the entrepreneurs.in order to understand the marginal productivity theory of distribution, let us first understand some important terms. Average Physical Product: The Physical Product per unit of the factor of production is called Average Physical…

## The Relationship between Total Utility and Marginal Utility

In this article, I will explain the relationship between the total utility and marginal utility. It is obvious that every unit of the commodity has some utility for the consumer. We also know that consumer buys the product in units. i.e. 1st, 2nd and 3rd units and so on. When a person consumes the product…

## Law of Diminishing Marginal Utility-Assumption & Limitations

Law of Diminishing Marginal Utility has been defined by Marshall as; “The additional benefit which a person derives from an increase of his stock of a thing diminishes with every increase in the stock that he already has.” The law of diminishing marginal utility defines the general human behavior. As you have more of a…