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

What is Wall Street?

It is the American stock market.

How the Stock Market Works

To set up a company, you need capital. This capital is raised from investors (called shareholders because, in return, the investors own a share in the company), who then get their money back either through receiving dividends on the shares or through selling their shares. Investors buy and sell their shares on the "stock market."

How Shares Work

The value of shares is higher when the company is successful. When more people buy rather than sell shares, their price goes up. But when it is the other way around, the price falls.

Causes

Speculation

Investment on the stock market was attractive during the economic boom since the economy was doing well and people...

The Importance of Topic Sentences

Purpose of the Topic Sentence

A topic sentence is the most important sentence in a paragraph. It summarizes the main idea or thesis of the paragraph and helps organize the information within it. In formal writing, the topic sentence is usually the first sentence in a paragraph, but it doesn't have to be.

The topic sentence tells readers what the rest of the paragraph is about. All sentences after it should provide more information, prove the topic sentence with facts, or describe it in more detail.

Topic sentences also need to relate back to the thesis statement of the essay. The thesis statement is like a road map that tells the reader where the essay is going and how it will be treated.

Topic Sentences and Controlling

Social Media

has transformed the ways in which people share and consume information. Social media has offered a host of new platforms to disseminate content, build relationships, foster engagement & better understand the needs of target audiences.

4 Phases Readiness

A sound crisis management strategy starts with preparation long before the onset of an actual crisis. While it’s impossible to plan for every future scenario, examine your company, facilities, people, products & environment to assess areas of significant risk & identify the potential threats that are both most likely to happen and cause harm. When a crisis breaks, things are going to accelerate & need a solid response plan in advance in order for your organisation...

Different Marketing Orientations in International Business

Understanding the approach a company takes when entering foreign markets is crucial. These orientations dictate the level of adaptation required for the marketing mix.

1. Domestic Market Extension Orientation

This orientation is illustrated by a domestic company seeking sales extension of its existing domestic products into foreign markets. It is typified by the belief that, if a product sells successfully in the home market, it will sell anywhere else in the world.

Minimal efforts are made to adapt the marketing mix to foreign markets; the firm’s orientation is to market to foreign customers in the same manner as the company markets to domestic customers. It seeks markets where demand...

Economic Driving Forces and Game Changers

Understanding Labor Productivity and TFP

• Employment is a major political concern, but labor productivity is also important.
• Labor productivity can be improved by the capital ratio (K/L, machinery to labor ratio), or by rises in Total Factor Productivity (TFP).
• Total Factor Productivity (TFP) is the product of improvements in technological innovation, human capital, and management competencies.

The Golden Age (1944–1970) and Subsequent Slowdown

• The **Golden Age (1944–1970)** saw many technological advances: electricity, the internal combustion engine, running water, communications, chemicals, petroleum, etc. This led to the development of knowledge-intensive branches, such as Information and Communication

Distribution Channels

Three key flows define service distribution channels:

1. Information and Promotion Flow: Distribution of information and promotional materials to generate customer interest in purchasing the service.
2. Negotiation Flow: Reaching an agreement on the service features and terms to close the deal. Sell the right service to the right consumer.
3. Product Flow: Determining the delivery location.
   • People-processing and possession-processing services typically require physical facilities for delivery.
   • Information-processing services can often be delivered through electronic channels.

Service Location Strategies

Ministores

Create numerous small service factories to maximize geographic coverage.

Locating in Multipurpose Facilities

Establish service...

What is not strictly foreign currency?

b) Bills of exchange, promissory notes, and bank notes in foreign currency.

How can a foreign currency market maker orient quotes?

a) Orient USD/EUR quotes towards selling EUR, buying them and selling them cheaper than competitors.

In the formula i F = (T F - T 0 / T 0 ) * (360 / t):

b) T 0 = cash exchange rate, T F = forward exchange rate, t = time in days.

What does Interest Rate Parity Theory establish?

c) Equality between the appreciation or depreciation of a currency's future exchange rate relative to a reference currency, and the interest rate differences between those currencies.

Currency SWAP operations:

b) Principal amounts are exchanged at the beginning and end, or only at the end of the swap.

Differences

Chart of Accounts

This system codifies business transactions with an account number and name. Accounts are hierarchically ordered:

• Groups (1 digit): Seven primary categories.
• Subgroups (2 digits): Subdivisions within groups.
• Accounts (3 digits): Specific items within subgroups.
• Subaccounts (4 digits): Detailed breakdown of accounts.

Group Examples:

1. Basic Financing
2. Non-Current Assets
3. Inventories
4. Trade Payables and Trade Receivables
5. Financial Accounts
6. Purchases and Expenses
7. Sales and Income

Static vs. Dynamic Financial Views

Net Worth (Static Vision)

• Economic Structure: Assets
• Financial Structure: Liabilities and Equity
• Balance Sheet: Fundamental accounting identity (end of period)

Net Income (Dynamic Vision)

• Resource Generation: Revenues
• Resource Consumption: Expenses
• Income

The Three Phases of Value Delivery

We can divide the value creation and delivery sequence into three distinct phases. This process begins before a product exists and continues through development and after launch. Each phase has significant cost implications.

1. Choosing the Value (Strategic Marketing): This represents the “homework” marketing must complete before any product exists. Marketers must segment the market, select the appropriate target, and develop the offering’s value positioning. The formula Segmentation, Targeting, Positioning (STP) is the essence of strategic marketing.
2. Providing the Value (Tactical Implementation): Marketing must determine specific product features, pricing strategies, and distribution channels.
3. Communicating

Core Concepts: Managing Market Demand

Needs, Wants, and Demands

People have needs for specific goods or services. Companies aim to identify and satisfy these needs. A complete demand includes four components:

• The underlying need and the specific want.
• The budget (ability to pay).
• The specific plan to purchase the item.

Types of Consumer Needs

Understanding the different levels of needs is crucial for effective marketing:

• Stated Needs: Explicit requests. Example: “I want to buy a cheap car.”
• Real Needs: The underlying requirement. Example: “I want a car that does not consume a lot of fuel.”
• Unstated Needs: Needs the customer has not yet consciously considered.
• Delight Needs: Identifying secondary needs that exceed basic expectations.
• Secret Needs: