Keynes's main attack against the postulates of the classical economists centres around the relationship between price flexibility and full employment. Keynes challenged the classical belief that price flexibility can be relied upon to generate automatic full employment. The defenders of the classical school, on the other hand, still insist upon this automaticity as a fundamental tenet. Wage Flexibility: The importance [...]
There is a close relation between the stock market and investment. Fluctuations in the stock market can affect investment of firms. The relationship between stock prices and firms' investment in physical capital is captured by the "q theory of investment", developed by James Tobin. Suppose a firm has 10 machines and 10 shares outstanding—one share per machine. Suppose the price [...]
The Farm Management Studies conducted by the Ministry of Food and Agriculture in certain selected regions of India in the mid-1950s clearly revealed that output per acre declined with the increase in the size of holding. Several explanations have been offered for this inverse relationship between farm size and output per acre. Output and Inputs Per Acre According to Farm [...]