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

Key Business & Finance Terms

1. Bargain

Something that is of very good quality but relatively inexpensive.

2. Change

The money that someone gives back to you when you pay more than something actually costs.

3. Currency

The system or type of money that a country uses.

4. Discount

Something you buy that costs much less than normal.

5. Entrepreneur

Someone who starts a new business or arranges business deals in order to make money, often in a way that involves financial risks.

6. Fair Trade

The activity of making, buying, and selling goods in a way that is morally right.

7. Loan

An amount of money that you borrow from a bank, etc.

8. Mortgage

A legal arrangement by which you borrow money from a bank or similar organization in order to buy a house, and pay... Continue reading "Key Business and Finance Terms Defined" »

It was a decade of contradictions. It was not only a period of hedonism but there was another important aspect: transformation of American industry.

Transformation of American Industry

Transformation of American industry

• Consumption: major driver of American industry.
• Readjustment: military and army technological advances adapted for civilian uses.
• Mass consumption: helped to originate installment plans.

The Great Depression

The Great Depression

The Industrial Utopia in the 1920s

Charles Sheeler and Precisionism

Charles Sheeler was a painter of Precisionism, a movement where artists celebrated industrial capitalism in their paintings. Those examples represent the new Ford factory.

Economic Factors Behind the Crash

Economic factors behind the crash

Credit

The work of the Human Resources department

We all know that recruitment and selection is one of the tasks that the HR department fulfills. The other tasks will be discussed below:

• Recruitment and selection: Involves selecting and attracting the best workers.

Wages and salaries: Must be enough to motivate or attract workers.
Industrial relations: There must be effective communication between departments.
Training programmes: Must meet the training needs of employees and accomplish business objectives.
Health and safety: Must do things according to the law.
Redundancy and dismissal: Must obey all laws when firing workers.

Recruitment and selection

Workers are needed when a business starts up, expands or an existing employee leaves. Businesses use the... Continue reading "Human Resources Department: Recruitment and Selection" »

Dimensions of Corporate Social Responsibility

Philanthropic (Good Citizen)

Ethical (Be Ethical, Right from Wrong)

Legal (Obey the Law)

Economic (Be Profitable)

5 Barriers to Sustainable Consumer Behavior

• Lack of Awareness & Knowledge
• Negative Perceptions
• Distrust
• High Prices
• Low Availability

Measuring Brand Equity

Contributes to positive perceptions of product quality

Qualitative (Free Association/Projective Techniques)

Quantitative (Brand Recognition Research/Brand Recall)

4 Dimensions of BrandAsset Valuator

Differentiation (Brand's Point of Difference)

Relevance (Brand Relates to You)

Esteem (How Well Regarded the Brand Is)

Knowledge (Understanding of the Brand)

Role of Social Media in Branding

• Brand Advocates/Sharing Info/Seeing Discounts/Customer Services
• Allows

Strategic Exporting for Small and Medium Businesses

• Export Online: Small and Medium Businesses (SMBs), System Unibex, and Dun & Bradstreet.

Phases of International Market Entry

• Phase 1: Planning; Phase 2: Design; Phase 3: Development; Phase 4: Launch and Maintenance.

Motivations for Global Expansion

• General Motivations: Aggressive firms aiming to be more long-term and active in a large number of markets, willing to dedicate organizational resources to the management of foreign business.
• Proactive Motivations: Profit advantage, international sales, and unique products. Note: Profitability of international startups is often low due to high costs; there is a significant gap between perception and reality for those with no experience. Other factors

Perfect Competition: Meaning and Definition

A perfectly competitive market is one with a large number of buyers and sellers, all trading a homogeneous product without artificial restrictions, and possessing complete market knowledge.

In other words, a market is considered perfect when all potential buyers and sellers are immediately aware of transaction prices. Under these conditions, the price of the commodity tends to equalize across the market.

As Mrs. Joan Robinson stated, "Perfect competition prevails when the demand for the output of each producer is perfectly elastic."

According to Boulding, "A perfectly competitive market may be defined as a large number of buyers and sellers all engaged in the purchase and sale of identically similar commodities,... Continue reading "Perfect Competition: Definition, Characteristics, and Examples" »

The Costs and Benefits of Home Ownership

The recent financial crisis forced a critical reevaluation of home ownership. This analysis addresses three key questions:

• What are the costs and benefits of owning a house?
• How has the recent financial crisis affected the net dollar value of home ownership?
• What regulations should policymakers implement following the crisis?

The Impact of the 2008 Housing Crisis

During the recent financial crisis, homeowners found themselves in a very tough situation. After the housing bubble popped, house prices fell severely. Even though the market has recuperated somewhat since 2008, the net value of owning a house has not been the same since the crisis.

Many homeowners experienced negative equity, meaning the remaining... Continue reading "Financial Impact of the Housing Crisis on Home Equity and Regulation" »

As the number of eCommerce sites grows each day, more and more people prefer to shop online for convenience, choice, and ease of price comparison. The online shopping experience is now easier than ever before.

Benefits of Online Shopping

On the one hand, the vast majority of online stores offer prices that are much lower than what you will find in a physical store. There are several good reasons for this.

Most physical stores have a restricted array of services and products. They can only carry a limited number of items, and there are many policies affecting access to services and products. As an example, there may be a certain item that is only available to those versions of the business that you can get from the mall.

Shopping online enables... Continue reading "Pros and Cons of Online Shopping: A Detailed Analysis" »

Types of Negotiation

• Distributive Negotiation: Parties compete to determine a fixed sum of value. The focus is on who will claim the most value (win-lose scenario).
• Integrative Negotiation: Parties integrate their interests into an agreement, aiming for a mutually beneficial outcome (win-win scenario).
• Multi-Phase Negotiation: Negotiation takes place over several sessions or phases.
• Multiparty Negotiation: At least two negotiators in each group, and there can be more than two groups involved.

Distributive Negotiation

Getting the Other Side on the Table

1. Offer Incentives: Such as money, time, service, or support.
2. Put a Price on the Status Quo: Highlight the costs or disadvantages of not negotiating.
3. Enlist Support: Use allies to facilitate communication.

Cash Flows and Dividends

1. Norris Company Dividends: Norris Company declared cash dividends of $60,000, payable as follows: $20,000 at the beginning of the year and $25,000 at the end of the year. (Calculation: $60,000 + $20,000 = $80,000; $80,000 - $25,000 = $55,000)

2. Indirect Method Cash Flow Statement: On the statement of cash flows prepared by the indirect method, the amortization of premium or discount on bonds payable is added back to net income.

8. Cash Receipts from Issuance: Cash receipts received from the issuance of stock are classified as financing activities.

11. Ten-Year Bond Issuance: A ten-year bond issued at par for $250,000 cash is classified as a financing activity.

17. Inflow of Cash: Issuance of long-term debt represents... Continue reading "Accounting Principles and Financial Statement Analysis" »