July 2020

Comparison between Deductive and Inductive Method

Introduction to Induction and Deduction There are two methods of reasoning the deductive method and the inductive method. Both the methods are forms of logic that help to establish the truth. It means generalization can be drawn by using these two methods. During scientific reasoning, true logic can be stressed through deduction as well as […]

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Simon’s Theory of Satisficing

Herbert Alexander Simon one of the pioneers of behavioral theory dissatisfied with the profit-maximizing model and gave his own model in 1955 and called Simon’s Theory of Satisficing. Therefore, his theory was satisfying behavioral theory. He said that instead of maximizing profits, the business firms aim at merely satisficing. It means as per him, producers

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Sales Revenue Maximization Model/Baumol’s Model to Theory of the Firm

Introduction William J. Baumol confronted the assumption of profit maximization and argued that maximization of sales rather than profit is the ultimate objective of the firm. So, a firm should direct its energies on promoting and maximizing sales. He, therefore, called his hypothesis as Sales Revenue Maximization hypothesis.  The sales maximization model is thus an alternative

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Indicators/Parameters of Economic Development

Economic development is a multidimensional process. It is a dynamic process of change. Economic development is a positive change whereby opportunities, the living standard of people, etc. increases along with the economic prosperity of the nation. The measurement of the extent and pace of economic development and expressing it in any specific index is a

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Quality of Life: New Paradigm of Development

In recent years, development economists have stopped concentrating on national income only. They have started emphasizing the quality and strategy of development. As a part of the quality of development, they have advocated that direct attention should be given to the quality of life. Quality of life refers to the degree of the economic well-being

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The Deductive Method

Methods of Analysis Economic laws or generalization states the relationship between economic variables. Economic theory provides an explanation of the stated relation between the variables. It means economic theory brings out the logical reasoning and logical basis of generalization. An economic theory deduces generalization through the procedure of logical reasoning and explains the condition under

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Methodological Issues in Economics

Meaning of Methodology in Economics Every science follows certain methods for the formulation of its laws, principles, and theories. Since economics is a science, it also adopts certain methods for the discovery and formulation of its laws and principles thus there are certain methodological issues in economics. There are some writers, who recognize the claim

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Process and Techniques of Financial Statement Analysis

Financial statement analysis is a technique of answering various questions regarding the performance of a firm in the past, present, and future. The analysis enables financial managers to recommend steps to be taken for the correction of faults. Here is a brief introduction to the process and techniques of financial statement analysis. The need for

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