BUSINESS CYCLES
BUSINESS CYCLES
The business cycles or the irregular expansions and contractions in economics activity-Samuelson"trade cycle refers a period of parity followed by a period of depressions".
Business cycle or trade is a part of the capitalist system ,it refers to the phenomenon of cyclical booms and depressions ,in a business cycles there are wave -like fluctuations in aggregates employments,incomes ,output and prices level,the term business cycles has been defined in various ways be differents economics .The business cycles in the generals sense may be defined as an alternations of periods of prosperity and depression of good and bad trade".similarly"a trade cycles is composed of periods of good trade characterized by rising prices and low unemployments percentages ,altering with periods of bad trade characterized by falling prices and high unemployments percentages".
An important points to be noted in the case of business cycles is that "no cycle is perfectly regular with uniform frequency and amplitude ,that is the time taken to move from one peak level of output to the next would always be the same and the level of out put and employments would always vary in the same proportions between the upper and lower turning -points ,but such cycles have never occured."thus business cycles are recurrent fluctuations in aggregate employments ,income ,output and prices level.
The business cycles or the irregular expansions and contractions in economics activity-Samuelson"trade cycle refers a period of parity followed by a period of depressions".
Business cycle or trade is a part of the capitalist system ,it refers to the phenomenon of cyclical booms and depressions ,in a business cycles there are wave -like fluctuations in aggregates employments,incomes ,output and prices level,the term business cycles has been defined in various ways be differents economics .The business cycles in the generals sense may be defined as an alternations of periods of prosperity and depression of good and bad trade".similarly"a trade cycles is composed of periods of good trade characterized by rising prices and low unemployments percentages ,altering with periods of bad trade characterized by falling prices and high unemployments percentages".
An important points to be noted in the case of business cycles is that "no cycle is perfectly regular with uniform frequency and amplitude ,that is the time taken to move from one peak level of output to the next would always be the same and the level of out put and employments would always vary in the same proportions between the upper and lower turning -points ,but such cycles have never occured."thus business cycles are recurrent fluctuations in aggregate employments ,income ,output and prices level.
LIMITATIONS OF MICROECONOMICS
LIMITATIONS OF MICROECONOMICS
STATISTICAL AND CONCEPTUAL S DIFFICULTIES:
The measurements of macro economics concepts involves a no. of statistical and conceptual difficulties ,these problems relate to the aggregations of microeconomics variables,if individuals units are almost similar,aggregations does not presents much difficulty ,but if microeconomics variables relate to dis similar individuals units,their aggregation into one macroeconomics variable may be wrong and dangerous.
STATISTICAL AND CONCEPTUAL S DIFFICULTIES:
The measurements of macro economics concepts involves a no. of statistical and conceptual difficulties ,these problems relate to the aggregations of microeconomics variables,if individuals units are almost similar,aggregations does not presents much difficulty ,but if microeconomics variables relate to dis similar individuals units,their aggregation into one macroeconomics variable may be wrong and dangerous.
LIMITATIONS OF MICROECONOMICS
LIMITATIONS OF MICROECONOMICS
INDISCRIMINATE USE OF MACROECONOMICS MISLEADING:
An indiscriminate and uncritical use of macroeconomics in analyzing the problems of the real world can often be misleading ,for instance ,if the policy measures needed to achieve and maintain full employments int he economy are applied to structural unemployment in individuals firms and industries ,they becomes irrelevant,similarly ,measures aimed at controlling general prices cannot be applied with much advantages for controlling general prices cannot be applied with much advantages for controlling prices of individuals products.
INDISCRIMINATE USE OF MACROECONOMICS MISLEADING:
An indiscriminate and uncritical use of macroeconomics in analyzing the problems of the real world can often be misleading ,for instance ,if the policy measures needed to achieve and maintain full employments int he economy are applied to structural unemployment in individuals firms and industries ,they becomes irrelevant,similarly ,measures aimed at controlling general prices cannot be applied with much advantages for controlling general prices cannot be applied with much advantages for controlling prices of individuals products.
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