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Tag Archives | Business Cycle

Keynes’s Theory of Business Cycle | Economics

According to Keynes, business cycle is caused by variations in the rate of investment caused by fluctuations in the Marginal Efficiency of Capital. The term ‘marginal efficiency of capital’ means the expected profits from new investments. Entrepreneurial activity depends upon profit expec­tations. In his business cycle theory, Keynes assigns the major role to expectations. Business […]

What is the Business Cycle? | Firm

Get the answer of: What is the Business Cycle? Business (trade) cycles refer to regular oscillations in the level of business activity over a period of years, which occurs when economic activity speeds up or slows down. In fact, business cycles and unemploy­ment reflect unavoidable features of a market economy. The term ‘Business Cycle or […]

Under-Consumption Theory of Business Cycle | Firm

In this article we will discuss about the under-consumption theory of business cycle. On the basis of Marx’s ideas writers on socialism such as Major Douglas and A. Hobson developed the over-saving or under-consumption theory of business cycles. In the opinion of Hobson, “The right proportion of saving to spending at any given time depends […]

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