Capital Levy This is a direct tax upon the capital rather than income of the tax payers.The government may retire its public debt by levying a heavy additional tax only once, or at the most twice. This special heavy tax to repay public debt is generally called a capital levy as it is assessed on the value of capital held by the rich people....

Fiscal Policy and Redistribution of Income and Wealth :In developed countries inequalities of income and wealth, while still substantial have narrowed down. This has been possible by a combination of increases in productivity and redistributive government.The case do developing countries is quite different. There is worsening poverty with increasing...

 Anti-Inflationary Fiscal PolicyInflationary phase of trade cycle is the reverse order of unemployment and deflationary situation. Under inflationary situation, private expenditure go on increasing even after full employment is reached. Since there do not remain unutilised capacity and idle resources or manpower, the increase in aggregate expenditure...

 Fiscal Policy Vs Monetary PolicyThe divergent views on the relationship of money supply and level of economic activity resulted in the formulations of different sets of policies for the control of economic oscillations. The doubts have been frequently raised about the monetary policy from the angles of its effectiveness, the desirability of the...

 INTRODUCTIONIt is now widely recognized that the state has a sine qua non in the regulation of economic activity along the desired lines. Fiscal policy is traditionally concerned with the determination of state income and expenditure policy. However, in recent times, public borrowing and deficit budgeting have also become a part of fiscal policy.Thus...

 IntroductionMost of the economists believe that debt redemption that is the repaymentof pubic debt is desirable for the government.The need to repay public debt exercises a sort of check on the recklessnessof the government. A weak government may borrow large amounts to finance its expenditure because public debt does not impose a burden on the...

Introduction In an open economy, domestic spending no longer determines domestic output. Instead, spending on domestic goods determines output. A currency depreciation (increases in R) has two distinct effects on this measure: (i) value effects, and (ii) volume effects. A currency depreciation is equivalent to an increase in the relative price...

Introduction The transactions in the exchange market are carried out at what are termed exchange rates. It is the price of foreign money. Thus, exchange rate may be defined as the price paid in the homes currency for a unit of foreign currency. Or more simply, rate of exchange is the prices of one national currency in terms of another. It can be...

Introduction The mechanism through which payments are effected between two countries having different currency system is called foreign exchange. In simple words, by foreign exchange we mean foreign currencies. However, in broad sense, the term refers to the system of external or international payments. It covers methods of payment, rules and...

Kinked Demand curve The Kinked Demand curve theory is an economic theory regarding oligopoly and monopolistic competition. Kinked demand was an initial attempt to explain sticky prices.The kinked demand curve hypothesis is developed by Paul M Sweezy (Paul M Sweezy, Demand Under Conditions of Oligopoly" Joumal of Political Economy, August 1939, reprinted...