The following points highlight the two main approaches to the income theory. The approaches are: 1. Income-Expenditure Approach 2. Saving-Investment Approach. 1. Income-Expenditure Approach: The income theory of prices involves on the one side an analysis of income and aggregate demand, and on the other, an analysis of costs and aggregate supply. Prices are determined […]
Approaches to the Income Theory
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Top 3 Approaches of Balance of Payments
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The following points highlight the top three approaches of balance of payments. The approaches are: 1. The Elasticity Approach 2. The Absorption Approach 3. The Monetary Approach. 1. The Elasticity Approach: Marshall-Lerner Condition: The elasticity approach to BOP is associated with the Marshall-Lerner condition which was worked out independently by these two economists. It studies […]