Monetary System Monetary System is the government policy and framework which creates money for the local economy. Every government has enough power to control the local economy. They can control the amount of money which traffic in the market. The government uses the central bank to influence the monetary policy ...

Durable and Non-durables Goods Durable Goods Durable Goods are the goods that are purchased for long-term use, and they are expected to last for more than three years. They refer to the long-term asset that can provide long-term value to the consumer. Consumers will purchase these kinds of goods when ...

Circular Flow Model Circular Flow Model is the process by which money flows in the economy. The company pays money to the worker and those workers will pay back to the company in exchange for goods or service. The money flows from producer to household and will flow back again ...

Discretionary Fiscal Policy Discretionary Fiscal is the government policy to change the tax and spending policy to influence the aggregate demand. The government will reduce taxes to increase the demand. When tax decrease, it will increase the people’s disposable income which encourages them to spend more on the market. The ...

Definition of Seasonal Unemployment Seasonal Unemployment is the concept that employees have a job but not for the whole year. They will face unemployment at a certain time of the year when the demand is low. At a particular time of the year, the demand will increase and the employees ...

Consumer Sovereignty Consumer Sovereignty is the economic concept that the consumers have enough power to control the product or service being produced. They know exactly what they need before the producer. In response, the producer will make the product or service base on the consumers’ needs. The consumers determine the ...