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

Advantages of Free Trade

International Specialization

Free trade promotes international specialization, allowing countries to focus on producing goods they have a comparative advantage in. This leads to a wider variety of products and increased total production.

Increase in World Production and Consumption

Free trade enables industries to benefit from economies of scale, leading to increased world production and consumption of internationally traded goods at lower costs.

Safeguard against Monopolies

Free trade fosters competition and helps prevent domestic monopolies by opening markets to international players.

Links with Other Countries

International trade promotes the exchange of knowledge, ideas, and culture, fostering better understanding and reducing... Continue reading "Advantages and Disadvantages of Free Trade: A Comprehensive Guide" »

The Spanish Financial Crisis

Ley del Suelo

The Spanish financial crisis began as an extension of the international financial crisis of 2008, but internal imbalances accumulated in the pre-crisis period aggravated the situation.

Causes of the Crisis

The main cause of Spain's crisis was the housing bubble and the accompanying unsustainably high GDP growth rate. The ballooning tax revenues from the booming property investment and construction sectors kept the Spanish government's revenue in surplus, despite strong increases in expenditure, until 2007. The rapid economic growth encouraged a boom in property. In 2006, Spain started building 800,000 new homes – more than Germany, Italy, France, and the UK combined.

However, in 2008, Spain was badly... Continue reading "The Spanish Financial Crisis: Causes, Effects, and Austerity Measures" »

CA deficit: consuming more than  producing.If there is a current account deficit, it means There is a surplus on the financial / capital account. 

A CA deficit is considered harmful because: - If a current account deficit is financed through Borrowing it is said to be more unsustainable. This is because borrowing is Unsustainable in the long term and countries will be burdened with high Interest payments.Countries with large interest payments have little left over to spend on investment.

-A current account deficit, may imply that you Are relying on consumer spending, and are becoming uncompetitive. This leads to lower growth of the export sector. 

-A Balance of payments deficit may cause a Loss of confidence by foreign investors. Therefore,... Continue reading "are" »

The World Trade Organization (WTO)

Introduction

The establishment of the World Trade Organization (WTO) in 1995, following the Uruguay Round of negotiations under the General Agreement on Tariffs and Trade (GATT), represents a pivotal moment in the history of international trade. GATT, the precursor to the WTO, was founded in 1948 by 23 countries. It liberalized trade and fostered an environment that paved the way for the WTO's evolution. The WTO's scope is significantly broader than that of GATT, encompassing areas such as textiles, agriculture, services, and intellectual property, which were previously excluded under GATT.

Guiding Principles of the WTO

The core guiding principles of the WTO are:

• Non-discrimination among members in granting favors

Types of Strategic Alliances

• Non-equity alliances

  They do not imply participation in the capital of the strategic partner.

• Equity alliances

  There is participation of at least one company in the capital of the strategic partner. There may also be cross holdings. A specific type is corporate venture capital.

• Joint ventures

  The companies involved in the alliance form a new entity, of which they are all owners (in equal or different percentage).

Main Risks Associated with Strategic Alliances

• Opportunistic behaviors

  To acquire all the necessary resources/capabilities in a short time without providing all the promised resources/capabilities. They are more common when contracts fail to anticipate them and/or incorporate mechanisms that dissuade them.

• A company

Understanding Organizational Environments and Culture

Key Concepts and Strategies

Direct Investment Strategies

1. What are the three main strategies for direct investment?

Answer: Greenfield venture, Acquisition, Joint Venture

Business Intelligence

2. What approach uses sophisticated software to analyze internal and external data for patterns and trends?

Answer: Business Intelligence

Types of Cultural Culture

3. What are the types of cultural culture?

Answer: Adaptability, Achievement, Involvement, and Consistency

Real-Time Information and Strategic Decision-Making

4. According to Eisenhardt (1989), how does the use of real-time information impact the speed of the strategic decision process?

Answer: The greater the use of real-time information, the greater... Continue reading "Understanding Organizational Environments and Culture: A Comprehensive Guide" »

Systems:

Since its inception, the EFQM Model has provided a blueprint for organisations across and beyond Europe to develop a culture of performance and innovation. Allows organisations to embrace change, drive performance and evolve for the future. Here are just some of the Model benefits:

• Define your purpose:

Purpose is the lifeblood of any organisation. Without it, there is no reason to serve. The new EFQM Model places an unparalleled emphasis on the importance of purpose, vision and agile strategies to organisations if they are to create sustainable value.

• It helps create your culture:

The new EFQM Model is an innovative culture creator, valuing core quality beliefs and shared goals at the heart of organisations whilst allowing them to remain... Continue reading "EFQM Model and ISO 9001:2015 Quality Management Principles" »

Trip to Denver: Global Professional Search – what employers look for.Skills: Language Proficiency and other “Power Skills”Language skills-second language/Lack of set skills (now referred to as “power skills”)-writing: business, english language-tolerance for ambiguity-cultural intelligence (competing global mindset: 3 elements)-problem-solving and decision-making (work in teams and operate in situations of conflict)-self-confidence.The monoglot ceiling.The Expatriate (Expat) – what is an expat?Today, regardless of the size of an org.(entre,small,medium) there exists a need for expats that possess a specific skill-set. expat: someone who works(live) abroad representing an org . HR execs look for 2 primary determinants that form their... Continue reading "Global Professional Search: Skills Employers Look For" »

Understanding Comprehensive Community Planning

Comprehensive planning involves the identification of community goals, the development of plans to implement these goals, and the use of governmental tools to influence and shape private and public decision-making to serve these goals. While the formal role of planners is advisory, they can have a substantial influence on community policy. In smaller cities, planners may be primarily tasked with the day-to-day administration of the zoning and subdivision control ordinances.

Limitations on Planners and the Role of Zoning

There are some limitations on the influence of planners. First, many important decisions in community development are made by private enterprise rather than by government. Real estate... Continue reading "Community Planning, Taxation, and Fiscal Stress in Government" »

Characteristics of a Financial Plan

• It's a roadmap that can be used to guide a company into the future.
• Can be used to attract investors.
• Explains how a business will manage its records and why.
• Describes any legal agreements that influence the way records are kept.

Six Things an Effective Plan Contemplates

• Identifies the assets that need to be purchased.
• Describes the amount of money a business needs to start and operate.
• Describes the expenses the business will incur and explains how a business will cover its expenses.
• Describes how a business will document and report financial reports.
• Forecasts finances to project future profitability.
• Explains how the business will acquire money to grow or expand.

Startup Capital

Startup capital is the money used to... Continue reading "Financial Planning and Accounting for Startups" »