Working capital indicates revolving a circular flow of cash starting with cash paid for purchase of material and ending with cash receipt after the sale of finished goods. This is how working capital is a circular cash flow from cash to inventories and back to cash. According to Shubin, "working capital is the amount of funds necessary to cover the [...]
In this article we will discuss about:- 1. Assumptions of Classical Theory of Interest 2. Supply and Demand for Capital 3. Determination of Rate of Interest 4. Features of Classical Theory 5. Criticisms. The economists like Ricardo, J. S. Mill, Marshall and Pigou developed the, classical theory of interest which is also known as the capital theory of interest or [...]
According to the modern theory, there are four determinants of the rate of interest: (a) The saving function, (b) The investment function, (c) Liquidity preference function and (d) The quantity of money. The equilibrium between these four variables together determines the rate of interest as well as the equilibrium level of income. According to Hansen, "An equilibrium condition is reached, [...]