The following points highlight the eight main advantages of the circular flow of money in an economy. The advantages are: 1. Link between Producers and Consumers 2. Creates a Network of Markets 3. Inflationary and Deflationary Tendencies 4. Basis of the Multiplier 5. Importance of Monetary Policy 6. Importance of Fiscal Policy 7. Importance of […]
The Circular Flow of Money in an Economy: 8 Advantages
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Index Numbers: Meaning, Construction and Uses | Money
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In this article we will discuss about:- 1. Meaning of Index Numbers 2. Methods of Construction of Index Number 3. Difficulties in the Construction of Index Numbers 4. Uses. Meaning of Index Numbers: An index number is a statistical derive to measure changes in the value of money. It is a number which represents the […]
Fisher’s Quantity Theory of Money (With Criticisms)
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In this article we will discuss about the Fisher’s quantity theory of money with its criticisms. The quantity theory of money states that the quantity of money is the main determinant of the price level or the value of money. Any change in the quantity of money produces an exactly proportionate change in the price […]