Lato-kosero

Nature and sources of light : Light is a form of energy which on entering our eyes gives the sensation of sight, and enables us to see various objects. Various theories have been purposed for true nature of light. Some theories are discussed below” 1.      Newton’s Corpuscular theory (1678) Newton assumed that light is emitted from luminous objects in the form of tiny particles known as corpuscles and travel with the speed of light. He also assumed that these particles travels in straight line and when entered in our retina cause the sensation of vision and different colors are due to the different size of corpuscles. The phenomenon of refraction was explained by assuming that the corpuscles are attracted by the particles of denser medium and are accelerated and hence velocity of light is more in denser medium and this results change in direction. This result is contrary to the fact that velocity of light is less in denser medium. Also other phenomena like interference, diffraction and

Interdependence between micro and macro economics Micro and macro-economics are different in their approaches: - Micro studies the individual units of the whole economy whereas, Macro deals with the aggregates and sub-aggregates related to the whole economy - The objective, subjective matter, assumptions etc, of micro economics are different from those macro-economics. But micro and macro are independent. - The objective of the study of economic can’t be fulfilled by the study of only one, micro and macro. - They are independent on each other because the parts affect the whole and the whole effects the parts. - A general economy covers the both micros and macros. - It should explain prices, output, incomes, behavior of individual firm and industry and the aggregates of the individual variables.   Dependence of micro on macro economics -           Micro economics analyzes problem and behavior of small units of the economy. All micro economic variables are fraction of macro

Neo-Keynesian Approach to Inflation: The Phillips Curve Generally, Neo-Keynesian macroeconomics has the following four propositions. i.                     Private sector is unstable ii.                   Money in the long run is neutral iii.                 There exists tradeoff between inflation and unemployment iv.               Countercyclical policies are preferable to achieve the macroeconomic stability Phillips (1958), using the data of Great Britain, innovated the Phillips curve which showed the negative relationship between rate of change in money wage and rate of change in unemployment . The original Phillips curve was just the empirical relationship, however, most influential theoretical interpretation steamed from R.G. Lipsey (1960) . The Phillips curve appeared empirically plausible and verifiable explanation of continuously rising money wage, a phenomena which the classical labour market could not explain immediately. The demand for and suppl

The Samuelson and Slow Modification Samuelson and Slow (1960) modified the Phillips curve so that it represents the relationship between rate of inflation and rate of unemployment. The link between wage inflation and price inflation was established through markup equation which may be stated as below:      P = (1 + a) WN/Y ……………… (1) Where,       P = general level of price      W = money wage rate      N = number of employment      Y = real output      a = constant profit margin In this above equation WN/Y denotes the unit labor cost – the cost of labor per unit of output. Using the concept of labor productivity (p = Y/N) equation (1) can be written as,      P = (1 + a) W/p Differentiating the equation after natural log transformation we will get,      π = gw – λ ……………….. (2) Here, inflation rate (π) is equal to difference between rate of growth in money wage rate (gw) and the rate of growth in labor productivity (λ). Further, let us assume t

Monetary Approach to Balance of Payment – by Harry G. Johnson in 1977 The monetary approach to balance of payment (developed by Harry G. Johnson in 1977) is also known as the ‘Small Country Model of Balance of Payment’ that shows an automatic adjustment between change in money supply (∆Ms) and money demand (∆Md) through the change in the position (deficit/surplus) of Balance of Payment. According to the approach, Balance of Payment is always and everywhere a monetary phenomenon so that there is a significant role of both money supply and money demand in the position of Balance of Payment. The approach is based on given assumptions: a. The country is small and open economy b. All countries are functioning with full employment economy c. There is a fixed exchange rate regime d. There is no money illusion e. There is a strong desire of people for adjustment between Ms = Md f. There is a perfect mobility of goods/s and financial assets from a coun

New classical school (Rational expectation theory)                  -      Rational expectation theory on quantity theory of money                  -      Rational version on quantity theory of money                  -      Radicalist version on quantity theory of money                  -      Radicalist version on quantity theory of money                  -      Lucas version on quantity theory of money The term rational expectation is used in economics only since 1961 by John Muth (American economist) by publishing an article “ Rational expectation and price movement ”. So, he is also considered as the father of rational expectation revolution. But, the concept and term “ Rational expectation ” is widely used, highly developed and made more popular by an American economist Robert Lucas in 1972 by publishing an article called “ Expectation and neutrality of money ” and award Nobel prize in 1995. Lucas is also known as the lender of new classical school