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law of variable proportions (D2) The DIMINISHING RETURNS LAW.<br /><em>See also:</em> returns to scale
first-in, first-out (M4)<br />A method of valuing physical stocks which, by assuming the oldest stocks will be used first, values at historic cost. The method has largely been abandoned in favour of the LAST-IN, LAST-OUT principle. The FIFO method has the effect of including in profits the effects of stock appreciation, thus giving an unrealistic picture of a firm's financial state.
to explain this phenomenon instead of the View inherent in the QUANTITY THEORY OF MONEY that inflation was caused by an increase in the money supply. The fullest form of demand-pull inflation is when excess demand occurs in both factor and product markets.<br /><em>See also:</em> demand-shift inflation
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