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What is Allocative Efficiency?

Definition

Allocative efficiency is a term used in economics that refers to a situation where the available resources are used in a manner that produces the greatest level of benefit.

What does allocative efficiency mean?

To understand the term “allocative efficiency,” it is important to…

What is Balance Sheet Equation?

Definition

The balance sheet equation, which is also known as the accounting equation, is:

Assets = Liabilities + Shareholder’s Equity

This equation can also be written as:

Shareholder’s Equity = Assets – Liabilities

Or:

Liabilities = Assets – Shareholder’s Equity

What does balance sheet equation mean?

The balance sheet…

What is Budget Reporting?

Definition

Budget reporting is the process by which a company measures its actual achievement against its targeted figures. This helps it to see if it is on track to meet its business objectives. It also enables the company to take corrective action where…

What is a Centralized Government?

Definition

A centralized form of government is one in which all power is held by a single authority or by a group of people. Regional or local leaders are appointed by the central authority and they can usually be removed if they…

What is a Circular Flow Model?

Definition

A circular flow model illustrates the movement of goods and services in an economy. Consumers, which are referred to as households, supply the factors of production to producers, which are called firms. The firms manufacture goods and services, which in…