Found 104 Articles for General Economics

What is Net National Product (NNP)? The net national product refers to the total market value of finished goods and services that are produced by both domestic and foreign citizens of a nation. The calculation is usually done for a term of one year. So, when we talk about NNP we observe the market value of finished goods and services. The value of NNP can be obtained by subtracting the value of depreciation from the Gross National Product of a nation. NNP considers all products produced by the citizens of a country irrespective of their location. Therefore, NNP is a ... Read More

Introduction The net exports formula is a key indicator of the economic health of a nation. As it includes both the total exports and total imports of a nation, it shows whether the output is healthy or not. It provides a broader idea of the volume of exports in comparison to the volume of imports of a nation. Therefore, knowing the net exports formula can be helpful in deciding whether a certain industry needs support or not. Net export is an important indicator of a country’s financial health. It may provide clues to business industries in deciding whether to ... Read More

What is Net Domestic Product? The Net Domestic Product (NDP) is a key indicator of the economic growth of a country. Net Domestic Product (NDP) refers to the net monetary value of all commodities and services produced within the national borders of a country in a given period of time. In other words, NDP is the measure of net economic output in a year for a country. It is calculated by subtracting depreciation from the Gross Domestic Product (GDP). The depreciation in the calculation of NDP refers to the depreciation of capital assets, such as machinery, housing, and vehicles. The ... Read More

Introduction Partnerships or partnership firms are businesses where there is more than one owner of the business. Usually, when two or more individuals join hands to create a new firm, it is known as a partnership. Partnerships have their unique nature and characteristics. Here is all about the nature of partnership businesses. Nature of Partnerships In business partnerships, two or more people agree to share the profits or losses by jointly owning the business. The partnership business is actually a business relationship between two more persons. According to the partnership act of 1932, a ‘partnership is the ‘relation between ... Read More

Introduction A piece of common knowledge for laymen is that banks deposit and lend money are loans. But, people hardly know that banks create money when they extend a loan. Banks usually deposit a portion of the deposited money and offer a major portion of its reserve as loans. When such a process is followed, the bank necessarily creates an account in the name of the loan bearer. When such an account is created and money is deposited in that account, fresh capital is created by the banks. To understand the process of such money creation, let’s look at the ... Read More

What are Normal Goods? Normal goods are those goods that have a positive elasticity relation with demand and wages. When the wage of a consumer increases, he/she buys more normal goods, and when the wages go down, they buy fewer normal goods. So, normal goods refer to the positive level of demand when wages go up and down of the consumer. Normal goods have a positive elastic relationship with demand and income. This means that the movement in demand and income is in the same direction. When income increases, consumers tend to buy more normal goods as their budget ... Read More

Introduction: What are Shares? Shares are the units of distribution into which the total capital of a company is divided. For example, if the total capital of a company is Rs 10 lakh and this capital is divided into 10, 000 units of Rs 100 each, then each unit of Rs 100 will be considered a share of the company. The owners of shares are known as shareholders. Therefore, the shareholders pay for the capital and hence they enjoy ownership of the company. Owners of shares of a company are called shareholders of the company. The Articles of Association of ... Read More

Introduction: What is National Income? National income is the total monetary value of products and services produced by a country in a given period of time. In other words, national income shows the income from all factors generated in a given production year. Therefore, by the term national income, we mean the total income of a country in a year. The national income of a country can be calculated in three ways. The income method relies on the earnings generated through factors such as land and labor. The expenditure method is based on the government’s investments and consumptions. In contrast, ... Read More

Introduction: What is Reconstitution of a Partnership Firm? Partnership firms are one of the most popular and oldest forms of business. In these firms, individuals may have different ownership or profit (and loss) sharing ratios. A partnership firm runs according to a formal document known as a partnership deed. The partnership deed records all necessary legal policies for running the firm. However, in certain instances, the partnership ratios may need to be restructured. This restructuring leads to a change in the partnership deed. Although partnership restructures often refer to changes in profit-sharing ratios, there may also be other formal ... Read More

Introduction: What is Goodwill in Finance? Goodwill refers to the reputation a firm builds over time. It is associated with a company’s brand value, functional consumer association, palpable consumer base, outstanding employee association, and any other patent or proprietary technology the company has. Goodwill is an intangible asset as it cannot be seen or touched but it has a real value and its contribution to the company’s overall value is outstanding. Thus, goodwill has a given value and it can be bought or sold depending on its value in a particular market. The importance of goodwill can be understood from ... Read More