Debt ratio lies between 0 to1. Higher value indicates more risk to company and it will be difficult to obtain loans for new projects or expansion of any project. A low value indicates the company is less dependent on the money borrowed from or owed to others and the company has a strong equity position. Times Interest Earned is used to determine how easily a company can pay interest expenses on outstanding debt. Lower the ratio, more the company is burdened by debt expenses.
• Lower Government Acquisitions: Economic growth makes higher assessment incomes and there is less need to use funds on profits. For example, unemployment benefits. Subsequently, it serves to diminish obtaining. Likewise, it assumes a part in decreasing obligation to GDP degrees. DISADVANTAGES Long term financial development puts an awful effect on the inhabitants of any nation.
The article written by Thomas J. DiLorenzo entitled The Myth ofNatural Monopoly, as the title states is about unravelling and explaining the natural monopoly myth. Natural monopoly is defined as a monopoly in which only a single firm can obtain the utmost benefit from the industry it is in. This usually happens when there is an extremely high fixed cost in production. As production increases, the long run average cost of production decrease as fixed cost is spread over the units produced. It would be more beneficial for the manufactured product to be produced by only one producer since more investors would possibly bloat the price considering the high fixed cost involved in manufacturing.
This would be the case of very low inequality countries, which are traditionally the more developed and rich countries. As concerns the poor countries, which normally have very high initial unequal levels of income, and increase of average incomes will only explain a little percent of 0.6 in terms of poverty reduction. The conclusion is therefore that reduction of poverty levels can only be effective if national average income levels increase on the basis of having an initial level of inequality that is somewhat low. High inequality countries will have less poverty effective policies as their policies apparently do not target to reduce inequality in the first
Natural prices are prices corresponding to long-term costs, whereas market prices are short-term prices and can deviate from long-term prices. There are two circumstances when market prices do not correspond with its natural prices, in an upward and downward direction. When demand is less than supply, the market price drops below the natural price, this is because of an increased in competition within the group of sellers, which cause the market price to be lower than the natural price. The second circumstance is when demand is more than supply, the market price is obviously higher than the natural price, this is due to the increase in competition with the buyers, since the demand is higher, and the market price increases as
et al, 1971). However, Arres et al. (2009) explained that higher price can have both a negative and positive effect. It could mean that the product may be assumed as of higher quality or maybe assumed to be less desirable because of the extra expense. At the same time brand has been said to be the most important non-sensory factor affecting the decisions of consumers.
Due to imposition of price ceiling, the quantity supplied is lower than that of in normal times. In the above diagram the quantity supplied Qs is corresponding to the price Pc, which is the ceiling price. This quantity Qs way is lesser than the equilibrium quantity Qe which the suppliers would have supplied normally at the equilibrium price Pe. The imposition of price ceiling also creates a high demand in the market. Now the consumers would be demanding the quantity Qd at a price Pc which is lower than the equilibrium price Pe.
Due to corruption being part of the resource curse, inequality is not falling at the rate that it should be. The resource curse actually caused fewer people to pursue education. The resource curse shows that with an increase in technology, GDP actually grows slower. The Kuznets curve does not take into account growth rate which can lead to a country moving up and down in inequality but only moving partly along GDP per capita
Price elasticity of demand (PED) should be relatively lower than price elasticity of supply (PES); in this case, the tax incidence on consumers, being important stakeholders is greater than the tax incidence on producers as consumers are unresponsive to changes in price, producers can pass on a relatively large burden of tax onto the consumers as they’re unresponsive. The economic incidence indicates the extent to which someone is made worse off by the
To put it into context if the rand depreciates against the dollar, it means that it is more expensive to trade. The supplier will pay more for goods meaning that they get less goods at a higher price. This ultimately impacts on the man on the street because it means that they are buying goods that they normally buy at a higher price which then impacts on spending. The downside to this is if there is less people spending money, then there is no flow money in the economy which results in slowed economic