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

Understanding Wealth Taxation

A wealth tax is a tax periodically levied on an individuals' net value of assets.

Definition and Scope

These assets, for example, include:

• Bank deposits
• Savings
• Real estate
• Luxury items (art, jewelry, airplanes, etc.)
• Personal trusts

Liabilities like mortgages, loans, or other debt are deducted from a person's wealth.

Global Implementation

Current Adopters

Currently, three countries have a wealth tax implemented in their tax systems:

• Norway
• Spain
• Switzerland

Tax characteristics vary from country to country and sometimes even within a country.

Specific Cases

Belgium recently implemented a form of wealth tax that, unlike in other countries, only includes financial instruments held in an individual's securities accounts.

France abolished... Continue reading "Wealth Taxation Explained" »

MANAGEMENT MODELS

Partial Models: specific elements of the Management process brought to the foreground

• Management by Exception – Management only in exceptional situations.
• Management by Delegation – Management by transfer of tasks.
• Management by Decision Rules – Default decision rules are given.
• Management by Results - Management by control of results.

* Total Models: Inclusion of all elements of the Management process

• Management by Objectives – Management by agreed targets.
• St.Gallener Leadership Model - overall integrating model.
• Harzburger Leadership Model - Management with autonomous employees.
• 7-S-Model - Mc.Kinsey Model - hard and soft factors.

* Management by objectives

-Description

o Management and employees agree jointly on targets.

o Employee... Continue reading "Management Models and Objectives: A Comprehensive Overview" »

Present Value Calculation

Present Value Calculation: The present value method has multiple applications in finance and refers to today’s value for a stream of future cash flows. Positive cash flows are called cash inflows and negative cash flows are called cash outflows.

The present value (PV) formula can be written as follows:

Where k is the discount rate and the expression is called the discount factor.

Net Present Value (NPV)

Net Present Value: It is defined as the difference between the present value of the future cash flows generated by the investment and the initial cash outlay.

Internal Rate of Return (IRR)

IRR: It is defined as the discount rate that makes the present value of future cash flows equal to the initial investment outlay. The... Continue reading "Financial Valuation Methods and Cost of Capital" »

Key Supply Concepts

The following terms are fundamental to understanding how supply operates in a market.

Supply Schedule Defined

Supply Schedule: A listing of the various quantities of a particular product that a producer would supply at all possible prices in the market.

Understanding the Supply Curve

Supply Curve: A graph that shows the quantities supplied at each possible price in the market.

The main thing to remember is that all normal supply curves have a positive slope that goes up when you read the diagram from left to right.

Changes in Supply

Change in Supply: A situation where suppliers offer different amounts of a product for sale at all possible prices in the market.

Factors Influencing Supply Changes

• Cost of resources
• Productivity
• Technology
• Taxes
• Subsidies
• Government

1. Purpose of Business

• Identify needs of consumers.
• Use scarce resources to produce goods and services.
• Meet the needs and wants of consumers profitably.
• Add value to resources so they become more valuable.

2. Benefits of Added Value

• Charge higher prices, thus earning higher profits.
• Create a point of difference from competitors, establishing a Unique Selling Point (USP).

3. How to Increase Added Value

• Increase the selling price.
• Create a luxurious retail environment.
• Use high-quality packaging.
• Promote the brand so it becomes a "must-have."
• Create a USP.
• Deliver great customer service.
• Reduce the cost of materials and wastage in production (being careful not to affect quality).

4. Characteristics of an Entrepreneur

• Innovative: Visionary with creative and original

Core Business Concepts

• Quality: An essential or basic characteristic or feature that belongs to something; how good or bad something is.
• Perishable Goods: Goods that may decay or be destroyed.
• Consumer: A person or organization that buys something or uses a service.
• Planning Regulations: Official rules governing development and land use.
• Tariffs: A schedule or list of charges or fares; a system of duties charged by a government on imports or exports.
• Capital: The wealth owned or used in business by an individual.
• Remuneration: Reward; pay; to pay for in money or the equivalent.
• Stakeholders: A person or group owning a significant percentage of a company's shares.
• Output: The quantity or amount of something produced in a specified period.

Motivational

MONEY

First of all, having money can show your status in our society: having a good car, wealthy possessions, living in an upper-class neighborhood and so on...can be representative of real happiness. Nevertheless, in our society we can see how families can't make ends meet due to their mortgage and the cost of living in general because we are having endless mortgages, and the standard of living has risen a lot over the last years.

In relation to what I would do if I become a millionaire, I think I would buy a house or a powerful car but not a sports car because it is a little uncomfortable since only two people can fit in it and you are with the roof on your head. So weighing up the pros and cons, I think the best option would be to buy a house... Continue reading "The Impact of Money on Society and Gender Differences in Financial Management" »

Urban Environment and City Life

• Alley: Callejón
• Lack of: Falta de
• Population density: Densitat de població
• Clear: Evident
• Land: Terra
• Quality of life: Qualitat de vida
• Commute: Viatjar
• Landmark: Punt de referència
• Resident: Resident
• Crime rate: Taxa de criminalitat
• Let in: Permetre
• Round the clock: Les 24 hores
• Destroy: Destruir
• Litter: Escampar brossa
• Set foot (in): Trepitjar
• Equal: Igual
• Mayor: Alcalde
• Skyscraper: Rascacels
• Facility: Instal·lació
• Neighbourhood: Barri
• Slum: Barri baix
• Free of charge: Gratuït
• Overcrowding: Aglomeració
• Trek: Excursió
• Giant: Gegant
• Pavement: Vorera
• Unemployment: Atur
• Housing: Habitatge
• Pay a fine: Pagar una multa
• Wealthy: Ric
• Isolation: Aïllament
• Picturesque: Pintoresc
• Block of flats: Bloc de pisos
• Pedestrian: Vian: Vianant
• Get around:

Telemarketing

It is a marketing action in which the telephone is used as the communication channel. It is aimed at contacting clients for commercial purposes, sales, or improving corporate image. It is part of a sales strategy of a company

Applications

1. Commercial applications: the goal here is to make a sale. How?

• Locating potential customers

• Arranging interviews for the sales team

• Keeping track of previous contacts

• Teleshopping

• Generating new sales of a product or a related one to the same customer (cross-selling)

• Renewing subscriptions (magazines, etc)

• Communicating new offers

• Attracting new customers

• Reactivating “silent” customers

• Follow-up, keep track of commercial offers received through postal mail or e-mail

2. Marketing applications, to gather information

Application of Multistage Games: The Entry Game

This scenario explores the strategic interactions between a potential entrant (Firm A) and an existing firm (Firm B) in a market. Firm B can choose to engage in a price war (play hard) or share the market (play soft). Despite the threat, Firm B has no incentive to play hard as it would earn less profit. The Nash equilibrium predicts Firm A entering the market and Firm B playing soft.

Managerial Decision Making with Risk-Averse Consumers

Criteria for Assessing Risk and Information Asymmetry

Managers employ various tactics to address risk-averse consumers, such as lowering prices, offering free samples, and utilizing advertising, particularly comparison advertising. Joining chain stores can also be... Continue reading "Managerial Economics: Key Concepts and Applications" »