Every economy has to go through certain functions or it would face problems economically and this is the obligatory duty of the government to see that the economy runs as smoothly possible. Following are the functions of economic systems or problems of economic system
Business Cycle occurs due to numbers of factors and causes, these causes are classified into:External andInternal Causes & Factors of Business Cycle
Fluctuations in the aggregate economic activity represents business cycle. If there are downswing and upswing trends in a particular sector of the economy, they will not present trade cycle.
In a two sector economy where there are firms and personals doing certain kind of economic transaction between each other the equilibrium occurs where C + I equals S + C or aggregate demand of the economy equals the aggregate supply of the economy.
They are of two kinds of elements of Business Cycle Internal & External Elements. The internal or endogenous forces are the elements within business activity itself.
Mitchell defined the business cycle as a fluctuation in aggregate economic activity, four types of economic changes, trends, seasonal, irregular, Cyclical
To understand Saving and investment approach it must be noted that Saving depends upon simple and automated principles, whereas investment is based upon some flexible and dynamic factors. To make it simple, suppose in a community there is only a change
Here we will take investment in terms of a schedule giving various amounts of investment associated with various levels of income. The investment schedule is the function of entrepreneurial behavior. It tells us how the investors or producers respond to a change in income or in the interest rate over a given time propensity to invest together