What is Capital Budgeting? Capital Budgeting is the process of evaluating and selecting long-term investment projects that involve significant capital expenditures such as purchasing new machinery, expanding production facilities, or launching new products. It compares costs and benefits of projects to determine its long-term profitability. Some of the most common
What is Cost Benefit Analysis (CBA)? Cost Benefit Analysis (CBA) is a process that’s used to determine the profitability of a project by estimating and comparing its costs and benefits measured in monetary terms after adjusting for the time value of money. Objectives of Cost Benefit Analysis To determine the
LQ1 – Define project life cycle. Explain different stages of project lifecycle in detail. Project Project is an interrelated set of activities undertaken to achieve a specific objective. It is unique and temporary in nature with a defined beginning and end. Examples, bridge construction project, developing a new product, building
Econometrics: Literally, the word econometrics means economic measurement or the measurement of economic relationships. According to Goldberger: Econometrics may be defined as the social science in which the tools of economic theory, mathematics and statistical inference are applied to the analysis of economic phenomena. Uses/functions/objectives of econometrics: Testing economic theories and models Estimating numerical values
Short Questions Absolute poverty is the situation of being unable or only barely able to meet the basic needs of life such as food, clothing, shelter, and basic health care. According to World Bank, nowadays global poverty line is 3 USD per person per day. Absolute poverty line is the
Short Questions Consumption is that part of disposable Income which is spent on consumer goods and services. The relationship between consumption and income is represented by consumption function written as C=f(Y). The slope of this function is called MPC. Saving is that part of disposable income that is not consumed.
LQ.1. Explain the law of diminishing utility. Illustrate your answer with appropriate diagrams. Discuss also the assumptions and limitations of this law. Law of Diminishing Marginal utility (Gossen’s First Law) “The Law of Diminishing Marginal Utility states that as a consumer consumes more and more units of a good, then
LQ-1 Define development economics. What is the scope/significance of development economics. What is Development Economics? Development economics is the subfield of economics which studies how economies are transformed from stagnation to growth and from low income to high income status and overcome the problem of extreme poverty. Why a separate
LQ 1: Define Macroeconomics. Discuss its scope, importance and limitations. Macroeconomics Macroeconomics deals with the behavior and performance of the economy as a whole. It studies aggregate economic activities such as aggregate output, aggregate demand, national income, aggregate price level, employment level, international trade, business cycles etc. Scope of Macroeconomics