Notes, summaries, assignments, exams, and exercises for Economics for Secondary education

Financial Terms

Basic Concepts

• Mortgage: A loan to buy real estate.
• Deposits: Money you put in the bank.
• Pension: Money paid to a retired person.
• Stock/Shares: Securities representing part-ownership of a company.
• Capital: Money invested in a business.
• Bonds: Interest-paying securities issued by companies that need to borrow.

Company Actions

• Takeover: When a company gains control of another by buying its stock.
• Merger: When two formerly separate companies join together.

Financial Institutions

1. Retail Banks: Making loans, receiving deposits.
2. Building Societies: Arranging mortgages.
3. Insurance Companies: Providing pensions, offering life insurance.
4. Investment Banks: Issuing shares or bonds, arranging mortgages, arranging or fighting takeover bids.

Vocabulary

Key

CHAPTER 14

1. Which of the following factors exacerbates the volatility in demand in industrial markets?

Professional buyers tend to act in concert.

2. Why are Japanese and German firms generally better at managing market volatility than American firms?

They value employees and stability very highly.

3. If a country has reached an economic development level where there is a focus on manufacturing of both semi durable and nondurable consumer goods and goods demanded relate to equipment and supplies to support manufacturing, which stage of Rostow's five-stage model of economic growth is the country in?

Takeoff.

4. The perception of quality rests solely with the:

customer.

5. Business-to-business marketers frequently misinterpret the concept of quality.

Understanding Life Insurance

Types of Life Insurance

Universal Life Insurance

Universal life (UL) insurance offers flexibility in premium payments and death benefits. It has a savings component where the cash value grows based on interest rates.

• Side Funds: UL policies may have side funds that offer additional investment options. Income earned in these funds may be taxable.
• Death Benefit Options: Policyholders can choose from various death benefit options, such as level, increasing, or decreasing, to suit their needs.
• Tax Implications: The tax treatment of UL policies depends on factors such as the type of policy and how it is structured.

Whole Life Insurance

Whole life insurance provides lifelong coverage with fixed premiums and a guaranteed death...

The Quality Management System and the After-Sales Service

The QMS is a management system for a customer-focused organisation that involves all employees in a continuous process of improvement. They integrate quality in all activities of the company. It is necessary to set up quality standards, procedures, and work practices. The goal is to maintain a competitive advantage, evaluate a company's performance, and achieve business excellence. Every company that has passed the quality audit and is registered for ISO9000 gets a certificate. This certificate guarantees a quality standard and transmits confidence in the product and services offered by the companies that use them.

In the After-Sales Service Quality

Internal quality: the technical and operational...

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

Managing Business Taxes in Argentina

When you want to establish a business in the city, you must register for Gross Income Tax.

Understanding Different Levies

• MLP (Silver City): Local governments do not charge taxes, but rather levies, the proceeds of which are earmarked for a particular purpose at the same rate.
• Services: Not required, may be provided by the state or by individuals. The amount payable depends on the use/consumption made.
• Taxes: Required by law; only the state may collect payments. The amount payable is the same for everyone, regardless of other aspects.

Simplified Tax Regime

Monotributo: A regime for small taxpayers that simplifies tax collection. If a person's annual sales do not exceed $144,000, they can enroll. This removes the...

Understanding E-commerce: Definition and Scope

Electronic commerce, commonly known as e-commerce, consists of the purchase and sale of products or services through electronic media, such as the Internet. It also encompasses a wide range of activities including promotion and publicity, product and service marketing, corporate image building, integral marketing strategies, facilitation of contacts between trading parties, post-sales support, market monitoring and research, and support for electronic business sharing.

E-commerce for Businesses: A Strategic Channel

For a company, e-commerce serves as a vital commercial channel and a means for information provision. It enables businesses to identify potential customers and significantly improve communication...

Government Economic Policies

1) Economic growth: the government will always want the economy to grow. They can encourage growth through helping private business to grow, through low business taxes or through government involvement in growth sectors such as new high tech industries.

2) Prices: the government will want to make sure that the general level of prices in the economy is effectively managed. Prices need to rise in a relatively slow and predictable way so that future contracts can be made where both sides know the value of what they pay or receive. Government policies to control inflation might include reducing spending or raising taxes when prices start to rise.

3) Income distribution: all economies are characterized by inequalities in...

Small Business Advantages:

• Greater focus: focus where they want; in places with greater profitability; in specific markets
• Greater cachet: greater sense of exclusiveness so they can charge more for their output, leading to higher profit margins
• Greater motivation: more prestige can motivate managers/employees
• Competitive advantage: giving a more personalized service and being more flexible
• Less competition: focusing on a niche gives limited competition
• Internal growth: slowly, steady and out of the existent operations of the business. They don't take many risks. Expands by selling more products or by increasing its product range. Usually self-financed
• External growth: quick and riskier methods. Expands by entering into an arrangement with another