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CENTRAL PROBLEMS OF AN ECONOMY

        CENTRAL PROBLEMS OF AN ECONOMY In any Economy there are three central problems (or basic problem) of an economy , namely :- Production,Distribution and Disposal of the goods and services produced in any economy. Now a days every society ( Developed or Underdeveloped)  is  facing the problem of scarcity of resources.                                                       There is a term PPC , stands for Production possibility curve  which represents various combination of two goods which  an economy produces with given technique and resources. this term is used to describe all the problems of an economy graphically.   We can understand the  problems with the help of  this chart In this figure there are  three types of problems but these are now a days not recognised...
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What is Monetary Policy

                          MONETARY POLICY  Monetary Policy is the process by which the monetary authority of a country controls the supply of money often targeting an Inflation rate or interest rate to price stability.  And general trust in the currency and economic growth and lower unemployment . *Monetary policy committee (MPL) , it consists of 6 members , 3 from RBI  and 3 from Govt of India. *RBI governor will  caste his vote in case of  a tie. * Monetary Policy  is of two types 1.Direct Instruments, 2. Indirect Instruments. *Direct Instrument                                                      1.CRR:- Cash Reserve Ratio,   2.SLR :- Statutory Liquidity Ratio,   3.Refinance Facilty. *Indirect Instrument  1. LAF :...
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INDIFFERENCE CURVE

          INDIFFERENCE CURVE Indifference curve is a  curve that shows the combination of goods which gives the same level of satisfaction to the consumers so that an individual is indifferent  .                      In other words , all combinations of goods which lie  on a consumer's indifference curve are equally desirable  to or equally preferable by consumer.                      The Technique of indifference curve  was first of all invented by the  classical economist EDGEWORTH   but he used it only to show the possibility of exchange between two persons and not to explain consumer demand.                      Later two economists J.R.Hicks and R.G.D. Allen in their now well known paper, "A Reconsideration  of the theory  of Value". ...
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