Tag: liquidity preference and profit

Liquidity Preference theory refers to the preference of the people to hold wealth in the form of liquid cash rather than in other non-liquid assets like bonds, securities, bills of exchange, land, building, gold etc. According to the liquidity preference theory of interest, interest rates on short-term securities are lower because investors are not sacrificing liquidity for greater time frames as in medium or longer-term securities. 

Liquidity Preference theory refers to the preference of the people to hold wealth in the form of liquid cash rather than in other non-liquid assets like bonds, securities, land, building, gold etc. According to the liquidity preference theory of interest, interest rates on short-term securities are lower because investors are not sacrificing liquidity for greater time frames as in medium or longer-term securities.

Government expenditure refers to the expenditure made by the government during the period of an accounting year which forms a part of the aggregate demand in the economy which is incurred either for consumption purpose like judiciary system or investment purpose like infrastructural development. 

Import and export are the two sides of international trade where import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. 

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export is an income for the country whereas import is an expense for the country. Therefore, when export is higher than imports then the net earnings from the trade of a country is positive which in added to the national income of the economy. 

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export is an income for the country whereas import is an expense for the country. Therefore, when export is higher than imports then the net earnings from the trade of a country is positive. 

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export is an income for the country whereas import is an expense for the country. Therefore, when export is equal to imports then the net earnings from the trade of a country is zero which does not impact the national income as the earnings from foreign trade is added to the national income of an economy. 

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export(X) is an income for the country whereas import(M) is an expense for the country. Therefore, the net earnings from the trade of a country is the excess of exports over import which is symbolically expressed as X-M. 

Government expenditure refers to the expenditure made by the government during the period of an accounting year which forms a part of the aggregate demand in the economy which is incurred either for consumption purpose like judiciary system or investment purpose like infrastructural development. 

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So when foreign currency is received through exports from a certain country it can be utilized in importing the required goods and services from that country.