Difference Between

FDI vs FII   FDI (Foreign Direct Investments) and FII (Foreign Institutional Investments) both relate to foreign investments made by an entity based in another country. FDI and FII are both quite similar in that they both result in a substantial inflow of funds into a foreign country, and generally result... 

Diminishing Returns vs Decreasing Returns to Scale   Diminishing returns and decreasing returns to scale are terms widely used in the study of economics. They both show how levels of output can fall when inputs are increased beyond a certain point. Despite their similarities, diminishing returns and decreasing... 

Elasticity of Demand vs Elasticity of Supply   Similar in meaning to the expansion of a rubber band, elasticity of demand/supply refers to how changes in X (which can be anything such as price, income, raw material prices, etc.) can affect the quantity demanded or quantity supplied. In price elasticity of... 

Collateral vs Security   Collateral refers to any asset that is pledged to the bank by the borrower when taking out a loan; which the bank uses to recover losses in the event that the borrower defaults on his loan. Collateral can refer to any type of asset with value such as land, buildings (houses), cars,... 

Positive vs Negative Externalities   An externality exists when a third party who is not directly involved in a transaction (as a buyer or seller of the goods or services) incurs a cost or benefit. In other words, an externality arises when a third party to a transaction experiences side effects (which can... 

Factor Cost vs Market Price   There are a number of costs involved in the production of goods and provision of services. Many of these costs are related to the inputs into the production process, the taxes charged by the government, and other costs involved in operating in a dynamic business environment.... 

FDI vs Portfolio Investment   FDI and portfolio investment are both forms of investments made with the aim of generating profits and higher returns. FDI, however, involves a large commitment, larger amount in funding, and cannot enter or leave the market as they please. Portfolio investments are passive investments... 

Elasticity of Demand vs Price Elasticity of Demand   Similar in meaning to the expansion of a rubber band, elasticity of demand refers to how changes in X (which can be anything such as price, income, etc.) can affect the quantity demanded. The most commonly known and easily understood type of elasticity... 

Giffen Goods vs Inferior Goods   Giffen goods and inferior goods are quite similar to each other since giffen goods are also types of inferior goods and neither follows the general demand patterns. This is because with regard to each type of product, when savings are made (either due to low price, or higher income)... 

Demand Curve vs Supply Curve   Demand and supply are fundamental concepts in the study of economics that are very closely related to one another. Demand looks at the buyer’s side, and supply looks at the seller’s side. The demand and supply curves are graphical representations of the law of demand and... 

Cost Benefit vs Cost Effectiveness   Cost benefit analysis and cost effective analysis are both tools used for decision making and help in evaluating a project/investment/course of action in terms of either their feasibility and profitability or value and effectiveness. Cost benefit and cost effectiveness also allow... 

Consumer Surplus vs Producer Surplus   Consumer surplus and producer surplus are terms that are used hand in hand to explain the benefits that exist for a consumer and producer when buying and selling goods in a market place. Consumer surplus is the benefit available to the consumer and producer surplus is... 

Collateral vs Mortgage   Mortgages and collateral are terms that are closely related to one another and are constantly referred to when discussing loans and lending. Collateral acts as an insurance policy for lenders which can be sold to recover losses when a borrower defaults on their loan. Mortgage is a... 

Annuity vs Perpetuity   Annuities and perpetuities are terms that are very important for any investor to know and understand since they both refer to types of financial payments made. An annuity is a repayment made periodically for a set period of time, whereas a perpetuity is a periodic repayment that has... 

Closed Economy vs Open Economy   In today’s modern economies, international trade plays a vital role. International trade ensures that countries produce and export products and services efficiently at a lower cost and import other products and services that they cannot produce efficiently from a country... 

Classical Economics vs Neoclassical Economics   Classical economics and neoclassical economics are both schools of thoughts that have different approaches to defining economics. Classical economics was founded by famous economists including Adam Smith, David Ricardo, and John Stuart Mill. Neoclassical economics...