Tag: theories of distribution

Competition or competitive behaviour means when firms compete with each other in a variety of ways to achieve a higher level of sales or a greater share of the market.

The concept of quasi-rent, which refers to the short-run earnings of capital equipment whose supply is fixed in the short run, was introduced by Alfred Marshall.

Quasi-rent is the surplus income earned by man-made capital goods (like machines) in the short run, where the supply of such goods is inelastic.

In classical economics, rent is specifically defined as the payment made for the use of land, which is considered a factor of production with a fixed supply.

Reserve bank of India has the sole right to issue currency notes of various denominations except one rupee notes under Section 22 of Reserve bank of India Act. The one rupee note and coins are issued by ministry of finance and it bears the signature of Finance Secretary.

The variable reserve ration is a new method of credit control used by central banks in recent times. The variable reserve ratio device springs from the fact that central bank, as a Bankers Bank, must hold a part of the cash reserves of commercial banks.

$MONEY\space MULTIPLIER = \dfrac{1}{LRR}$

The primary functions of money are medium of exchange, measure of value, store of value, and standard of deferred payment. Durability is a characteristic or property of money, not a function itself.

Liquidity refers to how easily an asset can be converted into cash. This depends on both the maturity of the asset (time) and the existence of secondary markets where the asset can be traded.