Notes, summaries, assignments, exams, and exercises for Economics for Other courses

Factoring entities are financial operations, with or without the right of recourse and its maturity. Commercial credits are generated against their clients (invoices, receipts, bills of exchange, etc.). The factoring entity is in charge of putting these credits into circulation, collecting them, accounting for them preferentially, and establishing the form and period of effect with client meetings, assuming the risk of the holder's insolvency.

Contract Elements

Personal Elements

1. Factoring entity: Analyzes the solvency of clients and, once accepted for the assignment, performs a function of 1% of the determined credit for each client. It assumes the risk of insolvency of the assigned credit and manages its collection in exchange for a commission

The Market

The market represents the external environment where companies conduct economic exchanges.

Key Actors

• Buyers: Individuals or entities with specific needs and purchasing capabilities.
• Vendors or Suppliers: Entities providing goods or services for trade.

Core Elements of Exchange

• The Product: The good being traded.
• Price: Contractual terms or features that improve the exchange ratio.
• Conditions: Specific contractual terms related to the exchange.

Market Classification

1. According to the Number of Competitors

• Monopolistic Market: Defined by a single bidder serving many applicants, or vice versa.
• Oligopoly Market: A few bidders serving many applicants.
• Perfectly Competitive Market: Many bidders serving many applicants.

2. According to the Buyer

• Consumer

Spain's Economy: Autarky and Intervention (1939-1959)

During the first decade, the priority was to rebuild the country, which was demographically and economically devastated. However, isolation and non-participation in the Marshall Plan made recovery difficult. Hunger forced rationing. To cope, Spain opted for a model of autarky and state intervention:

• Agencies were established to control prices, wages, and trade. Agriculture was controlled, factories were converted to producing basic goods, and the INI was created in 1941 to promote industrialization. Public companies emerged in strategic sectors, such as ENDESA, SEAT, and IBERIA, constantly receiving state aid, which generated huge public spending. The INI covered the deficiencies of the industrial

Advertising

: publicidad

Brand

: marca: a commercial name

Budget

: Presupuesto: an amount of money to be used

Company profile

: perfil d la empresa

Competitors

: competidores: company selling similar products to you

Consumer goods

: bb d consume: a product for normal life

Customers

: clients

Employ

: dar trabajo: to give job

Employees

: empleados: people who work for a company

Expand

: xpandir: to become bigger

Figures

: cifras: a company total annual sales

File

: archivo: to organize papers and documents so they are easy to find

Financial advise

: asesoramnto financero

Found

: fundar: to create

Head office

: sede

Household white goods

: electrodmstics electrodomestical appliances used at home such at a fridge (nevera)

Improve

: Mejorar: to make something better

Launch

: lanzar...

Andrew's Tax Scenario

• It reduces Andrew's taxable income by $12,000, which in turn reduces his federal income taxes owed.
• It reduces Andrew's total federal income tax liability dollar-for-dollar by $2,200.
• Andrew will receive a tax refund of approximately $2,300 from the federal government.
• $81,900
• Only the portion of Andrew's taxable income that falls within the 22% bracket range is taxed at that rate.

Essential Tax Formulas

• Taxable Income = Gross Income − pre-tax contributions (401(k)/403(b), HSA, 529) − standard or itemized deduction
• Net Income = Gross Pay − mandatory − optional − involuntary deductions
• Effective Tax Rate = (Total Tax Paid ÷ Taxable Income) × 100
• Refund/Owe = Amount Withheld − Final Tax Liability (positive = refund)
• Net

The Most Favoured Nation Principle

The Most Favoured Nation (MFN) principle is one of the basic principles of the WTO. It means that a country must treat all WTO members equally and cannot discriminate between them. If a country gives a special trade advantage to one member, for example, a lower tariff, it normally has to give the same advantage to all the other WTO members.

The objective of this principle is to make international trade fairer, more predictable, and more transparent. It helps avoid discrimination and prevents countries from giving unfair advantages only to some trading partners. This is why the WTO uses it to help trade flow smoothly between countries.

For example, if Spain or the European Union reduces a tariff for one WTO country,...

The EU Conditionality Regulation

The Conditionality Regulation is a mechanism created by the EU to protect the rule of law by linking EU funding to respect for democratic standards and proper management of the EU budget. Under this mechanism, the EU can suspend or reduce financial support when rule of law violations threaten the use of EU funds.

The regulation became particularly important because Article 7 TEU proved politically difficult to use effectively, mainly due to the unanimity requirement for sanctions. The Conditionality Regulation is considered more effective because financial pressure is often stronger than political criticism. Hungary became one of the main examples of the use of this mechanism because of concerns regarding corruption,...

Net Present Value and Cash Flows

The Net Present Value (NPV) formula is the sum of cash flows discounted by appropriate interest rates in future time periods. Free Cash Flows (FCF) are not simply profit, as non-cash assets exist, whilst FCF is equal to Cash From Operations (CFO) minus Capital Expenditure (CAPEX) minus the change in working capital (if included). Working capital is equal to current assets (e.g., accounts receivable) minus current liabilities (accounts payable). Investments in working capital are cash outflows, just like an investment in CAPEX. NPV only concerns cash because of the time value of money (cash can be reinvested to make more earnings, making a future £1 worth less than a present £1). Net income in year t is earnings...

Loan Amortization Methods

Bullet Method

• OLEY₀ = P
• OLBYt = OLTYt−1 (Same until last year)
• It = EAR · OLBYt (Constant until last year)
• PBt = 0 (Except last year, where PBt = P)
• At = It + PBt (Constant until last year)
• OLEYt = OLBYt − PBt (Must be 0 in the last year)

Straight Line Method

• OLEY₀ = P
• PBt = P/n (Constant every year)
• OLBYt = OLEYt−1 (Decreases every year)
• It = EAR · OLBYt (Decreases every year)
• At = It + PBt (Decreases every year)
• OLEYt = OLBYt − PBt (0 in the last year)

Annuity Method

• OLEY₀ = P
• A = P · EAR · (1 + EAR)ⁿ / ((1 + EAR)ⁿ − 1) (Constant every year)
• OLBYt = OLEYt−1 (Decreases every year)
• It = EAR · OLBYt (Decreases every year)
• PBt = A − It (Increases every year)
• At = It + PBt = A (Constant)
• OLEYt = OLBYt − PBt (

Understanding Spain's Balance of Payments

The Balance of Payments (BoP) of Spain is the record of all the economic transactions between Spain and the rest of the world during one year. It shows how much money enters the country and how much money leaves.

The Three Pillars of the Balance of Payments

The BoP is divided into three main parts: the Current Account, the Capital Account, and the Financial Account. Each one measures a different type of international activity.

The Current Account: Goods and Services

The Current Account records the exchange of goods, services, income, and transfers. It is the part that shows Spain’s day-to-day economic relationship with other countries.

• The goods balance includes exports and imports of physical products.