ABSTRACT
This chapter explores various dynamic techniques along with some of their applications in business and economics. These dynamic techniques are definite and indefinite integration, first- and second-order linear difference equations, and first- and second-order linear differential equations. These techniques have various applications in both business and economics. For example, the integral calculus can be used to find functions reflecting time paths for variables such as consumption and investment. Also, first-order linear difference equations can be used to find the dynamic equilibrium of price and investment. Similarly, first- and second-order differential equations have various applications in dynamic economics. If we are interested in finding such values we need to use the definite integration. This technique intends to measure areas under curves.
