If the price elasticity of demand is zero, it means that the demand is totally independent of the price. No matter how the price varies, people buy the same quantity of the product. The demand price curve of essential quantities like medicines has a slope which approaches zero. The demand curve will be downward slopping. Like 0 Dislike 0
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In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest. The legal term "debenture" originally referred to a document that either creates a debt or acknowledges it, but in some countries the term is now used interchangeably with bond, loan stock or note. A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company's capital structure, it does not become share capital.
All the classes of shares above are rewarded with dividends. that is, if you subscribe to any of the shares, the company would pay you dividends as returns on investment, while debenture is an certificate that acknowledges a debt owed by one person to another.
A substitute good is a good that can be used in place of another. In consumer theory, substitute goods or substitutes are products that a consumer perceives as similar or comparable, so that having more of one product makes them desire less of the other product. Formally, X and Y are substitutes if, when the price of X rises, the demand for Y rises.
The circular flow of income is a neoclassical economic model depicting how money flows through the economy. In its simplest version, the economy is modeled as consisting only of households and firms. Money flows to workers in the form of wages and money flows back to firms in exchange for products.
In a period of rapid economic growth, demand in the economy could be growing faster than its capacity can grow to meet it. This leads to inflationary pressures as firms respond to shortages by putting up the price. We can term this demand-pull inflation. Therefore, reducing the growth of aggregate demand (AD) should reduce inflationary pressures.The Central bank could increase interest rates. Higher rates make borrowing more expensive and saving more attractive. with this, individuals would be discouraged from borrowing and rather be lenders so as to enjoy high return on investment.
Stocks are sometimes called equity because the buyer of the stock has part ownership of the company (that initially issued the stock). When a corporation sells stock it is selling an ownership interest in the corporation and raising funds for investment in plant and equipment (for example an initial public offering).
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