Income Elasticity of Demand – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Income Elasticity of Demand?Income elasticity of demand is an economic concept that measures how demand for a particular good responds to a change in the real income of consumers. It examines the link between real income and demand for goods and how quantity...

Income Effect – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Income Effect?The income effect is an economic theory that describes how changes in wages and prices affect the demand for goods and services. Income effect is seen when there is a change in the demand for commodities and services as a result of a change...

Income Approach (Valuation) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles

What is the Income Approach to Valuation?There are many valuation methods and appraisal approaches that evaluators use when determining the fair market value of a property. The income approach is a valuation method used by appraisers to estimate the fair value of a...

Rational Choice Theory – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Rational Choice Theory?The rational choice theory refers to a school of thought that attempt to clarify conforming and well as a deviant phenomenon in a social setting. It is a framework for comprehending both social and economic behavior. This theory is of...

Rational Expectations Theory – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Rational Expectations Theory?Rational expectations theory is an economic concept which asserts that individual agents do make decisions based on the markets available information and also learning from the previous trends. Based on this theory, there is an...

Real Bills Doctrine – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Real Bills Doctrine?Real bills doctrine is a term used to refer to the means through which inflation is prevented. In other words, it is a means of growing the quantity of money as well as a means of shrinking it, according to the business needs, so as to...

Real Economic Growth Rate – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Real Economic Growth Rate?The economic growth rate is a kind of rate which measures the countrys economic growth in relation to the gross domestic product (GDP), in each periodic year. GDP refers to the value of the market of all goods and services...

Walras’ Law – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Walras’ Law?In economics, Walras law is a theory that maintains that surplus in one market must be adequately complemented by insufficiency in another market so that the market will be in equilibrium. Walras law was developed in 1874 by Lon Walras, a...

Walk Through Test – Explained

by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting

What is a Walk-Through Test?In auditing and accounting, a walk-through test is a technique or a measure used by auditors to ascertain the authenticity and reliability of a company’s accounting system. Auditors use the walk-through test procedure to each step of...

Wage-Price Spiral – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Wage-price Spiral?The wage-price spiral is a theory that indicates the interrelationship between an increase in wages and an increase in prices of goods, it is otherwise known as inflationary spiral. It is a theory commonly used in the macroeconomic field....