International Trade and its Theories

International Trade and its Theories. International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has existed throughout history (for example Uttarapatha, Silk Road, Amber Road, scramble for Africa, Atlantic slave trade, salt […]

IS-LM Model

The IS-LM model (Investment Saving – Liquidity Preference Money Supply) is a macroeconomic model that graphically represents two intersecting curves. The investment/saving (IS) curve is a variation of the income-expenditure model incorporating market interest rates (demand), while the liquidity preference/money supply equilibrium (LM) curve represents the amount of money available for investing (supply). The model […]

Producer equilibrium

Producer equilibrium – Like a consumer, a producer also aims to maximize his satisfaction. But a producer’s satisfaction is maximized in terms of profit. So, this article deals with the determination of a level of output, which yields the maximum profit. In order to clearly understand the concept of producer’s equilibrium, it is necessary to […]

General Equilibrium Theory

General equilibrium theory attempts to explain the functioning of the macroeconomy as a whole, rather than as collections of individual market phenomena. The theory was first developed by the French economist Leon Walras in the late 19th century. Working of the General Equilibrium System: Given these assumptions, the economy is in a state of general […]

Supply-Side Policies

  Supply-side policies are government economic policies aimed at making industries and markets operate better and more efficiently so that they contribute to the greater underlying rate of GDP (gross domestic product) growth. Any policy that improves a country’s economy’s productive potential and its ability to produce, is within the umbrella of supply-side policies. Improving […]