Question

Distinguish between static and dynamic economics.

Answer 1

Answer:

Difference # 1. Time Element:

In static economic analysis time element has nothing to do. In static economics, all economic variables refer to the same point of time.

Static economy is also called a timeless economy. Static economy, according to Hicks, is one where we do not trouble about dating.

Answer 2

In dynamic economics we study the economic variables like consumption function, income and investment in a dynamic state. According to Prof. Harrod, “Economic dynamics is the study of an economy in which rates of output are changing.”