Notes, summaries, assignments, exams, and problems for Economics

Value Added Tax (VAT) in Spain

What is VAT?

VAT (Value Added Tax) is an indirect tax levied on the consumption of goods and services in Spain. It applies to the delivery of goods and services but does not apply to the Canary Islands, Ceuta, or Melilla, which have their own indirect tax systems.

Taxable Events

The following are considered taxable events for VAT purposes:

• Delivery of goods and services
• Intra-community acquisitions made by employers and professionals
• Imports of goods made by entrepreneurs, professionals, and individuals

Transactions Not Subject to VAT

The following transactions are not subject to VAT:

• Provision of services arising from labor relations or administration
• Delivery of free samples without commercial value for promotional purposes
• Delivery

Gross Domestic Product (GDP)

GDP represents the monetary value of all goods and services produced by a country in a given period of time.

Characteristics of GDP:

• Follows a monetary standard.
• Considers only declared activities.
• References the value of final goods.
• Measures the value of what occurred within the borders of a country.
• Refers to what occurred within a specific period of time.

GDP at Market Prices (GDPmp): C + I + G + (X-M)

GDP at Factor Cost (GDPfc): Value Added by Sector A (VAA) + Value Added by Sector B (VAB) + ...

Nominal GDP is obtained by multiplying the quantities of final goods and services by the prices they had during that year.

Real GDP is calculated like nominal GDP, but it is multiplied by the prices of the year used as a base...

Understanding Key Macroeconomic Balances

National Accounts & Economic Identities

• Current Account Balance + Capital Account Balance = Net lending (+) / Net borrowing (–)
• CAB + Capital Account Balance = Financial Account Balance – Errors and omissions
• Gross Domestic Product at market prices (GDPmp) = Final Consumption Expenditure (FCE) + Gross Fixed Capital Formation (GFCF) + Exports (X) – Imports (M)
• Gross National Income (GNI) = GDPmp + Net Primary Income with RoW (NPI)
• Gross National Disposable Income (GNDI) = GNI + Net Secondary Income with RoW* (NSI)
• * net current transfers with RoW
• GNDI = GDPmp + NPI + NSI
• GNDI = FCE + GFCF + X – M + NPI + NSI
• X – M + NPI + NSI = Current Account Balance
• Domestic Demand = FCE + GFCF
• GNDI – Domestic Demand

Job Analysis

Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization.

A job consists of a group of tasks that must be performed for an organization to achieve its goals. A position is the collection of tasks and responsibilities performed by one person;

Job analysis is performed on three occasions: (1) when the organization is founded and a job analysis program is initiated for the first time; (2) when new jobs are created; and (3) when jobs are changed significantly as a result of new technologies, methods, procedures, or systems.

The Job Description

The job description is a document that provides information regarding the essential tasks, duties, and responsibilities...

• Modes of International Business

  • Merchandise Exports & Imports

-This is the most common mode of international business.

-Merchandise exports and imports are tangible products. They can be seen leaving and entering a country.

• • Services Exports & Imports

They are international non-product sales and purchases.

• • • Tourism and Transportation:

Are important sources of revenue for airlines, shipping companies, travel agencies, and hotels.

• • • Performance of Services

This refers to company's earnings in the form of fees (payments for the performance of a service).

1. Turnkey Operation

Is a deal where a company takes all responsibility for constructing, fitting and staffing a building (such as a school, hospital or factory) so that it is completely ready for the purchaser...

Crafting Effective Paragraphs

Organizing Your Ideas

Categorization: One effective way to organize your ideas is by sorting them into categories. If an idea doesn't fit, set it aside for later. As you sort, new ideas may emerge; include them if they are relevant. Consider how one writer organized her thoughts on the topic: "I always liked my aunt Alicia best."

Writing Paragraphs

Each paragraph should revolve around one central, controlling idea, often expressed in a topic sentence. Supporting details then develop this main idea by providing evidence, clarification, or elaboration.

Topic Sentences

A topic sentence can be a statement or a question. Regardless of its form, a good topic sentence clearly conveys the main idea and engages the reader. Your...

Stockholders' Equity

Rights of stockholders to share proportionately in:

1. Profits
2. Management
3. Corporate assets upon liquidation
4. Any new issues of stock of the same class (preemptive right)

Preemptive Right: Protects an existing stockholder from involuntary dilution of ownership interest.

Key Concepts

Additional Paid-in Capital: Indicates any excess over par value paid in by stockholders in return for the shares issued to them.

Retained Earnings: Represents the earned capital of the company.

Lump-Sum Sales: When a corporation issues two or more classes of securities for a single payment.

• Incremental Method: Company cannot determine the fair value of all classes of securities.
• Proportional Method: Determining relative value is available for each class of security.

COMPANY ORIENTATION TOWARD THE MARKETPLACE

The production concept is one of the oldest concepts in business. It holds that consumers prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution. Marketers also use the production concept when they want to expand the market.

The product concept proposes that consumers favor products offering the most quality, performance, or innovative features. A new or improved product will not necessarily be successful unless it’s priced, distributed, advertised, and sold properly.

The selling concept is based on hard selling is risky. It assumes customers coaxed into buying a product...

What are the objectives of auditing

AAS-1 describes the basic principles, which govern the auditor's professional responsibilities and which should be complied with whenever an audit is carried out. These are:-

1. Integrity, objectivity and independence:

The auditor should be straightforward, honest and sincere in his approach to his professional work. He must be fair and must not allow prejudice or bias to override his objectivity.

Confidentiality:

The auditor should respect the confidentiality of information acquired in the course of his work and should not disclose any such information to a third party without specific authority or unless there is a legal or professional duty to disclose.

Skill and competence:

The audit should be performed and...