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

Developing Export Strategy

Companies develop this strategy when customers in other countries request their goods.

Step 1: Identify a Potential Market

A company should conduct market research and analyze the results. Example: ART BRZ

Step 2: Match Needs to Abilities

Determine whether the company can meet the needs of the market. Example: Air conditioning

Step 3: Initiate Meetings

Build trust and develop a cooperative environment among all parties. Example: Arizona Companies

Step 4: Commit Resources

Allocate the company's human, financial, and physical resources to the project.

Export/Import Financing

1. Open Account

Export/Import financing where an exporter ships merchandise and later bills the importer for its value. Example: MGT briefcase

2. Advance Payment

Export/... Continue reading "International Business Strategies: Exporting, Financing, and Entry Models" »

Inflation and Deflation

Inflation is an increase in prices, reducing purchasing power. It occurs when the price of goods and services rises faster than salaries. Consequently, demand falls, leading to reduced production and a decrease in GDP.

Deflation is when prices fall more than wages. This leads to increased demand, increased production, and a rise in GDP.

World Trade Dynamics

World Trade Without Restrictions

• Higher prices
• Fewer consumer choices

World Trade With Restrictions

• Protection of national defense and citizen health
• Protection against dumping. Dumping occurs when manufacturers export a product to another country at a price either below the price charged in its home market or below its cost of production.
• Potentially lower prices for consumers

Business Markets & B2B Buying Behavior

Understanding Business Markets

Business buyer behavior refers to the buying behavior of organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others.

Business buying process is the process where business buyers determine which products and services are needed to purchase, and then find, evaluate, and choose among alternative brands.

Market Structure & Demand

Business Decision Process Characteristics

• More complex
• More decision participants
• More professional purchasing effort
• Buyer and seller more dependent

Supplier development is the systematic development of networks of supplier-partners to ensure an appropriate and dependable... Continue reading "Business Markets & B2B Buying Behavior Explained" »

Fundamentals of Markets and Exchange

Defining Business and Market

A business is a specialized unit that coordinates the production of goods and services.

A market is a place where buyers and sellers meet to facilitate the exchange of products and services.

Key Elements of a Market

We identify three important elements in a market:

1. Sellers: Normally businesses, who produce products or services in order to sell them in exchange for money. They usually sell them to final customers, but also to other businesses.
2. Buyers: Normally families, although companies can also buy from other companies. Buyers acquire goods and services with money in order to satisfy their needs.
3. Products and Services: Goods, both tangible and intangible, that are exchanged between

Types of Taxes

• Income Tax: A percentage of individual earnings filed with the federal government.

• Corporate Tax: A percentage of corporate profits taken as tax by the government to fund federal programs.

• Sales Tax: Taxes levied on certain goods and services.

• Property Tax: Based on the value of land and property assets.

• Tariff: Taxes on imported goods, imposed to strengthen domestic businesses.

• Estate Tax: A rate applied to the fair market value of a property at the time of death.

Understanding Tax Fraud

Tax fraud involves failing to pay the government (e.g., town council, provincial government) the taxes corresponding to income or benefits obtained during a specific period.

• Tax Evasion: Involves concealing income (either domestically or in other countries,

Incoterms: Understanding Responsibility and Risk in International Trade

Exam Questions

GDP

GDP fails to measure changes in "the quantity of existing products that don't cause a change in price". Whenever there is inflation, the increase in nominal GDP will overstate growth in the economy

True

Unemployment

Assume the US unemployment rate is 4.9%. If 10,000 working age immigrants enter the country all looking for work and 9.000 find a job, what happens to the US unemployment rate?

Increases

Assume the US unemployment rate is 4.9%. If 10,000 working age immigrants enter the country all looking for work and 9.000 find a job, what happens to the US labor force participation rate?

Increases

A recent college graduate who is still looking for their first job would be considered as

Unemployed

The eligible population is: 200,000. Employed:

What is an ethical dilemma in a company?

One knows when they have a significant ethical conflict when there is a presence of:

• Significant value conflicts among differing interests
• Real alternatives that are equally justifiable
• Significant consequences on stakeholders in the situation

An ethical dilemma exists when one is faced with having to make a choice among these feasible, comparable, and relevant alternatives.

Social Marketing Concept:

This text tries to make known the changes that capitalism has had in the last thirty years, second the opinion of several authors. It makes a comparison between different texts of the 1960s, where  family capitalism is criticized, and the texts of the 1990s, where there are already large planned organizations, hierarchies.

Objective Management in 1960

In relation to Objective Management in 1960, two major problems arise:

• Strong dissatisfaction on the part of the “Cadres”
• Management problems that are linked to the giant size of companies.

Cadres, it is the meaning of the value they have for a company. On the one hand, we have the role of “technical expert” and on the other the “relay management” the transmission of orders from above... Continue reading "Changes in Capitalism: 1960s vs 1990s" »