Notes, abstracts, papers, exams and problems of Economy

Reserve System

Market: The Intersection of Supply and Demand

• Job Market:

  This comprises job offers from organizations in a specific location and time. Increased organizational presence leads to higher employment rates.

• Human Resources Market:

  This encompasses individuals employed in a specific location and time, categorized by specialization (e.g., lawyers, engineers, skilled workers).

Therefore, the Human Resources Market reflects the Labor Market; when one is abundant, the other is in demand, and vice versa.

Recruitment: A Proactive Approach

Recruitment involves actively inviting individuals from various organizations to participate in the selection process. This ensures a wider pool of applicants, leading to better choices.

External Recruitment:

The foreign trade balance. The current imbalances in international trade

China leads the last 20 years growing at an average rate of 10 percent annually and has hardly been affected by the great recession plaguing the world since 2007. It is therefore the main character and now we need the argument, which is none other than economic globalization. China has become the economy grows faster and is helping to further the transformation of economic structures with the opening of goods and capital markets and globalization. China saves 52 percent of the income it generates, while in the U.S. and saving for many years has been 0 percent. The success of China, is to become the world's factory, where export-oriented model. China's success places significant... Continue reading "The Impact of China's Trade Surplus on Global Economy" »

Industrial Production Growth Analysis

Developments in Industry

Stress Analysis of Industrial Production Growth from 3 Aspects:

• Respect to the Overall Economy
• Regarding Environmental Factors
• Domestic Demand Considerations

Since 1985, the contribution of the industry to economic growth has significantly decreased, reflected in its reduced participation in the Gross Value Added (GVA) at current prices concerning employment (see Table 2, p. 168). From this perspective, the industry no longer plays the central role in Spain's economic development that it did in the 1960s, when its presence in GDP increased significantly, consolidating the industrialization process in Spain.

However, this does not mean that the Spanish economy is experiencing deindustrialization,... Continue reading "Industrial Production Growth Analysis: Spain's Economic Shift" »

New Figures Show First Contraction in 16 Years

New figures released in Britain confirm that the economy has weakened sharply. Gross domestic product (GDP) fell by 0.5% in the third quarter of the year. Here's our Economics Correspondent, Andrew Walker:

The news comes in the same week that the country's Prime Minister and Central Bank Governor both said that Britain is facing a recession. The new figures, which could be revised, are consistent with that assessment, although they don't confirm it.

Recessions in developed economies are often defined as two consecutive quarters of declining GDP, and this was the first. Most economists do, however, think there will be further falls in output.

This was the first contraction in the British economy for... Continue reading "UK Economy Shrinks: Recession Looms as GDP Falls" »

Comparison of Legal Forms

Sole Trader

Basic Features:

• No required minimum capital.
• Unlimited liability.
• Pays income tax.
• The employer has total control of the company.

Advantages:

• It's a perfect business form for the operation of small-sized companies.
• The employer has complete freedom of choice and total control of the company, as they do not need to agree with any partner.
• This form requires the fewest steps and procedures to carry out activities since there is no process to acquire legal personality.
• There is no minimum capital for start-up.
• It can provide tax credits to pay income tax, meaning that a progressive rate applies that increases as profits rise. In contrast, corporations have to pay a fixed tax rate of 25% or 30%. This means that companies

Financial Ratios Summary

Fund of Operation:

• AC - PC: The company has working capital, is in financial and asset balance, is not in default, and has no problems dealing with short-term debt.

Ratio of Availability:

• Available / PC: If the ratio is between 0.1 and 0.3, there are idle resources available.

Liquidity Ratio:

• AC / PC: If the ratio is between 1.5 and 1.6, the company has a revolving fund and is not in default.

Ratio of Warranty:

• Total Assets / Total Liabilities: If the ratio is 2, the company is in bankruptcy and cannot guarantee payment of its debts to creditors.

Human Resource Management

Human resources are managed for any organization and business. It is essential to have an area responsible for the administrative functions of staff, staff... Continue reading "Financial Ratios and Human Resource Management Best Practices" »

Marketing

Marketing is a set of activities, the objective of which is to satisfy needs and desires. A need is a sense of lack of something. If you cannot meet the needs, you cannot fulfill the wish. Consumers are those that satisfy the needs and desires, also called applicants. The market today is the place where the applicants or consumers are. All this is done for profit. Marketing is a social and administrative process; it is a process that has administrative functions: planning, managing, and controlling. It produces the product the consumer wants. The target market is the market where the company wants to go. A company has to think of the competitor to give confidence to the customer.

Marketing Objectives

• To maximize the benefits of the company

Factors Affecting Income Balance and Interest Rates

An increase in the money supply shifts the LM curve rightward, decreasing the interest rate and increasing income.

This increase in the money stock creates excess money supply, decreasing the interest rate. As the interest rate falls, investment demand rises, leading to increased revenue and consumption, induced by higher income. Conversely, a decline in the money stock shifts the LM curve leftward, decreasing equilibrium income and increasing the equilibrium interest rate.

Another factor shifting the LM curve is a change in money demand.

Curve Analysis

Fiscal policy variables shift the IS curve, affecting equilibrium income and interest rates. Income growth is driven by increased aggregate demand:... Continue reading "Determinants of Income, Interest Rates, and Economic Policy Effectiveness" »

Company Financing: An Overview

Funding is essential for a company to cover its expenditures and investments. We can distinguish different sources of funding:

Sources of Funding

By Ownership

• Self-financing: Resources belonging to the company's owners.
• External Financing: Funds from third parties.

By Source

• Self-financing: Funds generated by the company's activities.
• External Funding: Inputs from outside sources.

By Duration

• Permanent Resources: Integrate net worth and liabilities.
• Short-Term Resources: Make up current liabilities.

When choosing a source of financing, a company must consider the item being financed and the cost of financing.

Disadvantages of Self-Financing:

• The lack of explicit cost may favor unprofitable investments.
• Conflicts can arise between

Theories of the Firm

Business economics studies the existence of firms by examining how agents decide to use their scarce resources.

In a market-regulated pricing system, an agent can buy or sell at a price equilibrium. If the market worked efficiently, the existence of firms might seem unnecessary. However, companies exist because the market doesn't always function perfectly.

There are four major areas in the theories of the firm: transaction cost theory, agency theory, strategic management, and business organizational cooperation.

Theory of the Firm: A Basic Production Unit

The theory of the firm views the company as the basic production unit, aiming to maximize profit. It utilizes productive factors and sources of supply of goods and services.... Continue reading "Understanding Theories of the Firm: A Comprehensive Analysis" »