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

Gross Domestic Product (GDP) Components

GDP can be measured using different approaches:

Expenditure Approach

This approach sums up all spending on final goods and services in an economy. Key components include:

• Consumption: Household spending on goods and services.
• Investments: Business spending on capital goods, inventories, and structures.
• Government Spending: Government expenditures on goods and services (domestic demand).
• Net Exports: Exports minus Imports (external demand).

Income Approach

This approach sums up all income earned from the production of goods and services, often referred to as the income approach to production or added value.

GDP and Economic Well-being: Limitations

While GDP is a widely used economic indicator, it is not a perfect...

Imported Intermediate Inputs and Equivalent Imports

Imported intermediate inputs refer to the consumption of imported intermediate goods by productive sectors. Equivalent imports refer to the value of imports that are similar to goods and services produced within the sector.

The percentage of production in Sector X is obtained with inputs from internal sources.

The International Financial Crisis

The financial crisis that began in mid-2007 was one of the most serious and intense in recent times. It quickly spread to other U.S. markets and financial intermediaries, subsequently affecting the majority of the world's financial systems. It was, in fact, the first global financial crisis in history. Like all previous crises, this one resulted from a...

Institutional Unit 5: Forms of Organizations

Six Models of Organizations

Organizations can be categorized based on whether momentous decisions are restricted to holders of the residual claim.

First Category: Decision-Making Concentrated in Ownership

In this category, owners do not delegate decisions to others, thus minimizing control costs. Property is not separated, and a single person or a small group bears the consequences of their decisions. This structure mitigates the agency problem or issues with common assets.

A) Sole Proprietorship

A single individual owns and operates the business.

Disadvantages:

• Limited investment horizon
• Lack of diversification

B) Partnerships

Several individuals, known as partners, share ownership and decision-making. This...

Functions of Commercial Banks

• Mediator between savers and borrowers.
• Creation of money: They can open deposit accounts for customers or allow the provision of checks exceeding the amount deposited.
• Safety: Operators can deposit their savings in the bank as legal money to protect it from loss and theft.

Balance of Commercial Banks

• Assets: Resources and rights
• Liabilities: Funding sources and debt

Assets

Cash Reserves

• Cash (legal tender) and Central Bank deposits: E = cc ¹, DV

Earning Assets

• Credits: Typical operations of the banks.
• Stock portfolio: Public funds, bonds, and stocks.

Real Assets

• Buildings, property, real estate, equipment, and facilities.

Liabilities

Customer Funds and Liabilities

• Demand deposits (Dv) of savings and term.
• Central Bank loans (PBC)

Understanding Public Debt: Definition and Purpose

Public debt is a set of debt obligations or debts maintained by a state (not just the central government) against individuals or another country. Debt keeps the public sector operating, often involving intervention as traders.

The qualification of values is a way to obtain financial resources. Public debt is an instrument used by states to solve the lack of timely money.

Target Costs Financed by Public Debt

Public debt is used to finance various target costs:

• Current Expenditure: Financing public services (acquisition or lease of goods and services, and salaries to civil servants).
• Investment Expenses (Capital Expenditure): Funds allocated to maintain and expand the productive capital of the country.

Opening Balances

Debit Balances

• Cash in Hand
• Banks
• Clients (Accounts Receivable)
• Documents Receivable
• Other Debtors
• Merchandise Inventory
• Building
• Furniture and Office Equipment
• Equipment Sharing
• Organizational Costs

Credit Balances

• Accumulated Depreciation - Building
• Accumulated Depreciation - Furniture and Office Equipment
• Accumulated Depreciation - Equipment Sharing
• Accumulated Depreciation - Organizational Costs
• Suppliers (Accounts Payable)
• Other Creditors
• Documents Payable
• Share Capital
• Retained Earnings (Net Income)

Daily Business Transactions

1. Office Facilities Adjustment

Adjustments made to office facilities for 10,000 plus VAT, paid by check.

• Debit: Installation Costs 10,000
• Debit: Creditable VAT 1,500
• Credit: Banks 11,500

2. Secretary Acquires Cleaning Services

The...

Spain's Primary Sector: Economy and Structure

Delimitation and Quantitative Importance in Spain

The primary sector is based on the extraction of natural products. It is typically divided into three main subsectors:

• Agricultural Subsector: Represents 58% of the agricultural GDP. Key products include vegetables, fruits, cereals, and olive oil.
• Livestock Subsector: Accounts for 39% of the agricultural GDP. Important products include pork, beef, lamb, and goat meat.
• Forestry Subsector: Makes up 3% of the agricultural GDP, primarily producing wood and cork.

To determine the quantitative importance of this productive sector, its contribution to employment and GDP has been established. The primary sector contributes approximately 3.5% to Spain's GDP, with...

The Social Wage in Spain: Historical Context

The implementation of the Social Wage in Spain occurred during the transition period between the 1980s and 1990s. The most immediate antecedent dates back to Navarre in 1985, where it was assimilated into the concept of the social wage. The first program presented as a minimum wage appeared in the Basque Country (PV) in 1989. Five years later, similar programs were established in almost all Autonomous Communities (CCAA), with the Balearic Islands being a notable exception.

Common Criteria for Social Wage Access

While all regions (CCAA) have distinct requirements for accessing the Social Wage program, they share a common set of fundamental criteria:

• Age Requirements

  Except for Extremadura and Aragon, the

Stock Market Efficiency

A stock market is considered efficient when the information available within it is identical for all investors, and when prices over time are independent. This means that in an efficient market, current and future prices have no direct correlation with past prices. Therefore, historical price series are not indicative of future price behavior and cannot be reliably used to predict price movements.

When new information emerges that could influence the intrinsic value of a security or securities, an efficient market reflects this new information immediately. It is possible that from the moment news is rumored until it becomes public, more experienced investors might use it to their advantage, even if the information eventually...

1960–1976: The Economic Boom and Capital Deepening

GDP grew at very high rates, marking a phase of expansion due to capital deepening. Employment grew modestly. Activity rates were low and rose slowly due to emigration. The wealth capacity of the European Union (EU) was higher than that of Spain and Valencia. The low unemployment rate represented a false balance, characterized by reduced job creation.

1976–1985: Crisis, Stagflation, and Institutional Shifts

This period saw low rates of GDP growth. Employment grew modestly, but the labor force experienced a moderate breakthrough. The activity rate reached 49% in Spain and 50% in the Valencian Community (PV). The unemployment rate soared to 20.3%, hitting Valencia before the national average....