Theory of Wages - book of John Hicks economist published in 1932, decsribed as classic microeconomic statement of wage in competitive market.

- the marginal productivity theory wages determined by supply and demand equilibrium. Wage - remuneration paid by employer to employee, calculated salary depends on performance or an hourly rate,paid on daily or weekly basis. Labour - measure of work done by human being contrast such factors of production as land and capital. Labour demand- more labour use from increased production that lower wage would facilitate. Labour market - the interaction of workers and employers. Two sides of labour economics, the application of micro and macroeconomic technique to labour market. Microeconomic study the role of individuals and individual firms in labour market, while maroeconomic interrelations between the labour market, good market, money market and foreign trade market. Minimum Wage - the lowest hourly, daily or monthly remuneration that employers legally pay to workers, lowest wage received by workers. The labourer of minimum wage are called contractual legislation by government esp. to a manual or unskilled workers. Loanable Funds or financial assets - Funds are available for borrowing,often used to invest in new capital goods. - In economics loanable fund market is hypothetical market brings savers and borrowers together. and bringing together the money available for firms and household to finance expenditures, either investment or consumption. - The supplier who save money , the demanders are people who borrow money. Demand and Supply of Lonable Funds - interest is the return on capital, one of the factors of production. - demand for loanable funds is to buy consumer durables for investment. - from the investors viewpoint also, as investment goes up, due to the law of diminishing returns, we have diminishing marginal physical productivity.This leads to diminishing marginal revenue productivity. - loanable funds are supplied by people who save money.

Interest Rates (INCOME) or price - to borrow money and its price to be determined exactly the same way as the price of any other commodity. The propensity of people either to save or consume, product or services is the interraction of supply and demand. - the rate which interest is paid by a borrower(debtor) for the use of money that they borrow from the lender(creditor).Normally expressed as percentage of the principal for a period of one year. Interest rate targets are vital tool of monetary policy and are taken into account when dealing with variables like investment inflation and unemployment. Function of Interest Rates When interest rate are high, the demand for cash is extremely low. When interest rate are manipulated it influences the degree that people are willing to defer present consumption. If interest rates are too low people are not willing to save. Discount rate the rate at which bank lend to each other in order to meet their overnight reserve requirements. alternative measure o the effective annual rate which more useful or standard in some context. positive annual effective discount rate alwayslower number thaninterest rate represent. Velocity of money how many times the money supply turns over during the year. Capital Rate

Types of Capital Financial Capital liquidated as money for trade . Natural Capital inherent in ecologies and protected by communities. Social Capital private enterprise as goodwill or brand value. Instructional Capital the aspect of teaching and knowledge transfer , academic definition. Human Capital includes social, instructional and individual human talent in combination. Sources and forms of capital Loans source of capitalwhich the business owner can pay off the loan then own the business investments. Venture Capital source of capital which the venture capitalist owns the business investment. Public Ownership increases when more individuals have wealth to place directly into investment.