A more reliable approach towards the methodology of economic analysis was introduced by the "German Historical School of Economists" in the form of inductive method. The German school was represented by famous economists like Roscher, Hilbrand and Frederick. They were of the view that deductive method leads to many misleading conclusions conducted on the basis of incorrect assumptions.
Deductive method is known by variety of its names like analytical, abstract or prior method. This method is also known as hypothetical method. This method is based on the process of model building where conclusions are derived from general principles. When economic analysis is conducted through deductive method, the economic analyst has to proceed from general to particular.
On Monday 17, 2013, the newly formed Government of Khyber Pakhtunkhwa presented their first budget of Rs. 344 billion for the fiscal year 2013-14. During the budget presentation Finance Minister of KPK Siraj Ul Haq said that priorities of KPK Government are elimination of corruption and good governance.
On 13 June, 2013, the newly formed government of Pakistan Muslim League-Nawaz disclosed the Federal budget for the fiscal year 2013-14 for a total of Rs. 3.5 trillion. In a National Assembly session Finance Minister Ishaq delivered the budget speech and called this year budget business friendly budget.
The Marginal Productivity Theory is based on the operation of the Law of Diminishing Returns. As we employ more and more of a factor in the production of a commodity, returns from its fall. We shall therefore employ a factor only so long as its productivity exceeds its remuneration.
According to this theory the entrepreneur or owner of a firm can measure the value of marginal productivity of factors of production, and thus he can try to equate it with the prevailing factor rate in the market. However it is sometimes difficult to know the value of marginal productivity of factors of production
Theory states that reward of each factor of production tends to be equal to its marginal productivity in other words "Distribution according to "Contribution". Marginal Productivity refers to the addition that the use of one extra unit of the factor makes to the total production.
The concept of deflation is opposite to inflation. It is defined as a situation when the general income level and price level are falling. It is also known as negative inflation. During deflation the income level falls against the available supply of goods and services.