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

Return on Assets (ROA) Measurement Models

AECA Model

AECA considers the employed as the base for the measurement of Return on Assets (ROA). When an entity manages its trade payables as part of its trade policy, AECA is useful for estimating the investment requirements for the business. The AECA model reveals the effect of the cash policy on the net cost of finance (high liquidity negatively impacts the cost of finance).

DuPont Model

The DuPont model is very intuitive and useful for entities with a low level of liabilities and low financial expenses. Economic profitability here is meaningless because financial results distort the ROA.

PARES Model

PARES is more precise in measuring ROA because it avoids the disadvantage of DuPont by considering operating... Continue reading "Financial Analysis Metrics: AECA, DuPont, and PARES" »

PROFORMA INVOICE

It is a document without taxes value, the seller provides it to the buyer, contains most of the necessary information about an international operation. If the buyer accepts, it is understood that the buyer accepts and confirms the information indicated on it.

Freight Transportation Fundamentals

Importance of an Effective Transportation System

• Greater competition
• Economic Scale
• Reduced price

Service Choices and Their Characteristics

• Price
• Transit time and variability
• Loss and damage

Transportation Rate Profile

1. Volume related rates
2. Distance-related rates
   • Uniform rates
   • Proportional rates
   • Tapering rates
   • Blanket rates: meet the rates of competitors
3. Demand-related rates: Transportation rate is set by competitor

Transportation Charges

• Line-haul rate
  • By products
  • By shipment size
  • By route
  • Miscellaneous rates
• Special service

Line-Haul Rates

1. By products
   • Classification system was devised (T 6.4)
   • Class rates: once a product has a freight classification, line-haul charges can be determined. Zip codes are used for the location (T 6.5)
   • Break

What is Economic Growth?

Economic growth refers to the increase in the production of goods and services within an economy, typically measured over a long period, such as a year. It is expressed as a percentage increase in the real gross domestic product (GDP), which accounts for inflation.

Calculating GDP

There are two primary methods for measuring an economy's total production:

1. Expenditure Approach: This method sums up all spending on goods and services by households, businesses, governments, and foreign entities. The formula is GDP = C (consumer spending) + I (investment spending) + G (government spending) + (X - M) (net exports).
2. Income Approach: This method calculates the total income earned by all households within a nation.

The Expenditure

Strategic Approach to International Marketing

Internacionalizacija i globalizacija međunarodnih tržišta i konkurencija, Brz tehnološki razvoj, Skraćenje životnog ciklusa proizvoda, Sve teže ofržavanje konkurentske prednosti, Ekonomske integracije stranih tržišta, Višak punude nadpotražnjom > povećana moć kupaca i potrošača, Trgovci smanjuju broj dobavljača

Macroeconomic Environment

Ekonomski sustav, BDP, Stanovništvo i prihodi, Koncepcija ekonomskog napretka, Struktura potošnje infrasturuktura ostali pokazatelji

Hofstede

Hijerarhijska distanca, Individualizam i kolektivizam, Ženstvenost i muževnost, Izbjegavanje nesigurnosti, Kratkoročna i dugoročna orijentacija

Political Risk

Rizik opće nestabilnosti, neizvjesnost budućih... Continue reading "International Marketing and Macroeconomic Environment" »

Introduction to UK Unemployment Reduction Policies

To effectively address unemployment, the UK government can implement a combination of fiscal and supply-side policies. When analyzing such policies, it's crucial to discuss both types and consistently link them back to their impact on unemployment.

Key Considerations for Policy Analysis

• Define unemployment and state its significance as one of the four key UK macroeconomic objectives.
• Illustrate the impact of demand-side policies using an Aggregate Demand (AD) and Aggregate Supply (AS) diagram, showing AD shifting to the right (increasing).

Fiscal Policies to Combat Unemployment

Reducing Income Tax

One significant fiscal policy involves decreasing income tax. When income tax rates are lowered, individuals... Continue reading "UK Government Strategies to Reduce Unemployment" »

Economic Perspectives: Micro, Macro, Positive, Normative

Microeconomics examines the decision-making of specific economic units or institutions. In contrast, Macroeconomics looks at the economy as a whole or its major aggregates. Positive economic analysis deals with facts, while normative economics reflects value judgments.

Key Characteristics of the Market System

The market system is characterized by several key features:

• Private Ownership: Resources, including capital, are privately owned.
• Freedom of Choice: Individuals are free to engage in economic activities of their choice to advance their material well-being.
• Self-Interest: This is the driving force of such an economy.
• Competition: This functions as a regulatory or control mechanism.

In the... Continue reading "Core Principles of Microeconomics and Market Systems" »

The Paradox of Saving

As Blanchard states, when autonomous consumption falls (c₀▼), meaning consumers reduce their level of autonomous consumption, equilibrium income decreases. Consumption also decreases, so the level of saving remains unchanged. Mathematically, we can see this in the following formula: S = Y - T - C

We can also see that what really produces variations in saving are variations in investment, public spending, or taxes, and not the fall of autonomous consumption. Mathematically, we can see this in the following formula, where investment equals saving: I = Private Saving + Public Saving; I = S + (T - G), so S = I - T + G

In economics, this theory is known as the paradox of saving, which is closely related to Keynesian economic... Continue reading "Saving Paradox, Monetary & Fiscal Policy, Steady State" »

Court of Justice of the European Union (CJEU)

Composition: One Judge per Member State (MS).

Core Functions of the CJEU

1. Ensure proper interpretation of treaties and resulting laws.
2. Resolve disputes (direct and indirect).
3. Ensure law is interpreted and applies equally across the EU.
4. Check the legality of actions taken by EU institutions.

Types of CJEU Proceedings

1. Preliminary Ruling: A Member State court asks the CJEU for interpretation in case of doubt. The resulting decision is binding preliminary law.
2. Infringement Procedure: Initiated when a Member State or the Commission believes an MS is failing to fulfill EU law.
3. Procedure for Annulment: Initiated when an MS, the Council, the European Parliament (EP), or the Commission believes an EU act is illegal,

Essential Business Management Definitions

I. Leadership Styles

1. Leadership

   The art of motivating a group of people toward achieving a common objective.

2. Autocratic Leadership

   A leadership style that keeps all decision-making authority centralized within the organization.

3. Democratic Leadership

   A leadership style that promotes the active participation of workers in decision-making.

4. Paternalistic Leadership

   A style based on the approach that the manager is in a better position than the workers to know what is best for an organization.

5. Laissez-Faire Leadership

   A "hands-off" approach that delegates much of the decision-making to the workforce.

II. Motivation and Job Satisfaction

6. Emotional Intelligence (EQ)

   The ability of managers to understand their own emotions,