Notes, summaries, assignments, exams, and exercises for Economics for Baccalaureate

Foreign Exchange Markets and Risk Management

Sectors of the Foreign Exchange Market

• Spot Market
• Forward Market
• Currency (Market)

Determinants of Foreign Exchange Rates

1. Interest Rate Differentials
2. Inflation Rate Differentials
3. Government Policies
4. Market Expectations
5. Investment Opportunities
6. Speculations

Risks Faced by International Companies (Exposure Types)

• Transaction Exposure Risk
• Economic Exposure Risk
• Translation Exposure Risk

Methods of Managing Foreign Exchange Risk

1. Exposure Netting
2. Forward Exchange Contracts
3. Currency Futures and Options
4. Currency Swaps Agreements
5. Foreign Currency Bank Accounts
6. Appropriate Capital Structure

Foreign Exchange Terminology

1. Exchange Rates
2. Spot Rate
3. Forward Rate
4. Direct Quote
5. Indirect Quote
6. Two-Way Quote
7. Bid Rate
8. Offer Rate
9. American Quote
10. European

Factors of Production

673 Why is the demand for factors considered a joint application? Because several factors must be used jointly and in coordination to develop products.

Labor Market

677 Why is labor demand conditioned by labor productivity? A company can only hire an additional worker if the value of the marginal product of labor exceeds its wage; that is, if the value of increased production exceeds its cost.

679 What is the activity rate? The proportion of persons of working age who are either employed or seeking employment.

680 What are the main labor market imperfections?

• a) The bargaining power of unions and employers' associations
• b) The heterogeneity of labor
• c) Lack of market transparency
• d) Labor is not a perfectly mobile factor

Natural

Defining Economic Growth in Real Terms

Why has economic growth been defined in real terms? How do you achieve it? Even if production is valued in more stable monetary units or during a recession, it does not necessarily mean that there is growth.

Sustainable Growth vs. Expansion

Why is the term "sustainable growth" emphasized in the definition of economic growth? It is used to differentiate between "growth" and "expansion." Expansion is a trend of increasing economic parameters that may not be maintained over time.

Two Definitions of Economic Growth

What differentiates the two definitions of economic growth? One definition works with real national income in global terms, and the second with real national income per capita.

Economic Growth, Political,

Historical Materialism

Historical materialism. The starting point for Marx is the real human being and their effect on nature. Man is conceived as driven to satisfy needs and must work. This practice, which involves the development of certain skills and the organization of collective labor, determines all social, moral, political and cultural life.

Thus, for Marx the material, economic base is what determines ideology. We see here a clear contrast with Hegel: for Hegel political-ideological consciousness determines the economic, while Marx makes the material the essential element that gives rise to ideology.

Economic Base and Structure

Societies are defined by two elements: their economic infrastructure and their economic structure understood in

The Role of the Company

The company is the basic economic unit in the face of production and is responsible for producing and publicly holding most goods and services.

The Employer's Evolving Role

The traditional employer is the person providing the capital and, at the same time, performing the functions of management. In companies, the entrepreneur-manager assumes the risk, and many times, is the founder.

As large companies emerge, there is a separation between the classical functions of the employer. On one side is the figure of the investor, who assumes the risks linked to the promotion and innovation by providing capital. On the other, it strengthens the role of the professional director, specializing in management and business administration....

Market Economy (Capitalism)

In a market economy, decisions are driven by the market itself, governed by the law of supply and demand. If consumer demand for a product falls, its production will be reduced. Resources and production methods are allocated based on efficiency, and goods are distributed to the highest bidder (those who can afford them).

Advantages

• Efficiency: High level of efficiency in its operations.
• Economic Liberty: Individuals and companies have the freedom to choose what to produce or consume.

Disadvantages

• Income and wealth are distributed very unevenly.
• The system is not always efficient and can lead to market failures.
• It is inherently unstable, leading to economic crises and unemployment.
• It creates artificial needs through advertising

Item 13. The Balance of Payments.
The current account, or merchandise trade balance: This includes the export and import of goods, excluding insurance. When a country exports a good, it increases the gross national disposable income for productive factors resident in the country. When goods are imported, gross national income is reduced.

• Account Services: Includes non-tangible product transactions and payments for the use of intangible assets. A surplus occurs when a country exports more services than it imports. The Spanish economy groups all service operations into tourism and other services.
• Income Accounts: Records financial capital income obtained in a country other than the owner's residence, as well as labor income obtained by individuals

From Autarky to Developmentalism: Spain's Economic Transformation (1939-1975)

The Autarkic Period in Spain (1939-1951)

After the Spanish Civil War, the Franco regime adopted an economic policy of autarky. This policy was highly dirigiste, interventionist, and characterized by isolation and self-sufficiency with regard to foreign markets. This resulted in widespread economic stagnation, shortages, famine, and the rationing of basic goods.

The adoption of autarkic policies was due to several factors:

• Significant material losses and the loss of human capital caused by the Civil War.
• Internal barriers, such as the Second World War.
• Condemnation of the Franco regime by the United Nations.

Both foreign trade and supplies hampered the opening of the Spanish...

Labor Relations

Labor relations involve the company's interactions with employee representatives, which can include:

• Company Committee: In companies with over 50 employees.
• Staff Officer: Up to 3 in companies with between 10 and 50 employees.
• Representatives: Unions are associations of workers created to defend their common interests. All workers have the freedom of association.

The company and employee representatives collaborate on collective labor conditions, negotiate collective agreements, and seek solutions to conflicts. A collective agreement is a contract negotiated and concluded by representatives of workers and employers, regulating working conditions in a specific geographic area and activity.

If the company and employees disagree on an...

Understanding the Balance of Payments

The Balance of Payments (BOP) is a systematic record of all economic transactions, both real and financial, between the residents of one country and the rest of the world during a specific period. The accounting is determined by specific criteria.

Accounting Criteria

The actual operations of the balance of payments are recorded in terms of income from payments and financial transactions, reflecting changes in liabilities and asset variations (VA). Balances are derived from these columns by calculating the differences between expenditure and revenue, and between changes in liabilities and asset variations. The annotation criterion used is a systematic record that departs from the double-entry method.

Effects