Notes, abstracts, papers, exams and problems of Economy

Tema.la Commercial Function

Analysis of the Trading System

The Market

Marketing occurs when individuals or companies desire a product or service and have the economic capacity to satisfy that need. We can distinguish between:

• Consumer Market:
  • Difficult to quantify potential consumers.
  • Purchases meet subjective needs.
  • Prices are determined by the market.
  • Small volume transactions.
  • Manufacturing based on market demand.
• Industrial Market:
  • Easy to quantify due to planned dimensions.
  • Prices are negotiated.
  • Large volume purchases.
  • Manufacturing based on demand and consumer behavior.

Demand

Demand encompasses all activities and organizations involved when individuals seek, evaluate, use, and dispose of goods or services to meet their needs. These activities are:

• Complex
• Vary

Company

Definition: A company is an organization with a performance objective, producing goods and services. It is the basic unit of production. Companies work to select products and combine factors of production to achieve their objectives.

Through production activities, raw materials and intermediate products are transformed into end products using capital, labor, technology, and knowledge.

Business Classification Criteria

1. Goods and Services Produced

Businesses are classified according to the goods and services they produce.

2. Economic Sectors

Businesses are categorized by their economic sector.

3. Sub-sectors

Companies are defined by their specific activity within a sub-sector.

4. Legal Status

• Individual Companies: Private companies, often small

Value Added Tax (VAT) in Spain

What is VAT?

VAT (Value Added Tax) is an indirect tax levied on the consumption of goods and services in Spain. It applies to the delivery of goods and services but does not apply to the Canary Islands, Ceuta, or Melilla, which have their own indirect tax systems.

Taxable Events

The following are considered taxable events for VAT purposes:

• Delivery of goods and services
• Intra-community acquisitions made by employers and professionals
• Imports of goods made by entrepreneurs, professionals, and individuals

Transactions Not Subject to VAT

The following transactions are not subject to VAT:

• Provision of services arising from labor relations or administration
• Delivery of free samples without commercial value for promotional purposes
• Delivery

After the First World War, most of the belligerent countries had suffered serious economic losses. The United States was the only exception, consolidating its position as a great world power.

The return to the pre-war economy presented many difficulties. These included:

• Dependence of European governments on the U.S. economy
• Increasing protectionism
• Rising inflation caused by an increased money supply during the war
• Rising unemployment
• A tendency towards overproduction in the economic system

The Roaring Twenties and the 1929 Crash

In the 1920s, America best reflected confidence in the future because it was the only country experiencing significant economic expansion. For this reason, much of the population took out loans and speculated on the New York... Continue reading "The Great Depression: Causes and Consequences" »

Domestic Growth Strategies

Domestic growth involves productive investments within the enterprise to increase productive capacity, also referred to as asset growth. This is achieved in several ways:

Major Domestic Strategies:

1. Market Penetration: Increasing sales by improving product quality, advertising, promotion, and price reductions.
2. Market Development: Introducing the company's current products into new markets.
3. Product Development: Remaining in the current market but developing new products related or complementary to existing ones.

Diversification Strategies

Diversification involves adding new products and new markets, expanding the company's portfolio of businesses. Key types include:

1. Horizontal Diversification: Adding new complementary or substitute

Economic Variables and Their Impact

Macroeconomic analysis often begins with the work of John Maynard Keynes, a prominent economist of the 20th century. Keynes identified three fundamental questions to minimize the negative impact of economic fluctuations:

• How to mitigate lower production and employment and reduce unemployment?
• What causes widespread price increases, and how can they be controlled?
• How can a country increase its rate of economic growth?

Economies experience alternating expansive and contractive phases, known as economic cycles. Economic policy aims to achieve long-term prosperity by focusing on production, pricing, and capacity.

Key indicators include:

• Gross Domestic Product (GDP): Measures production.
• Consumer Price Index (CPI): Indicates

Spain's Economy: Autarky and Intervention (1939-1959)

During the first decade, the priority was to rebuild the country, which was demographically and economically devastated. However, isolation and non-participation in the Marshall Plan made recovery difficult. Hunger forced rationing. To cope, Spain opted for a model of autarky and state intervention:

• Agencies were established to control prices, wages, and trade. Agriculture was controlled, factories were converted to producing basic goods, and the INI was created in 1941 to promote industrialization. Public companies emerged in strategic sectors, such as ENDESA, SEAT, and IBERIA, constantly receiving state aid, which generated huge public spending. The INI covered the deficiencies of the industrial

Remuneration and Social Security in Spain

Assessing In-Kind Compensation

Housing:

• 10% of the property's rateable value.
• 5% over the revised rateable value (effective from January 1, 1994).
• 5% over 50% of the wealth tax value if no rateable value exists.

Vehicle:

• Delivery: Purchase cost, including taxes.
• Use: 20% of cost and charges, or if not owned, the market value of a new equivalent vehicle.

Other In-Kind Payments:

• Loans with sub-legal interest rates: The difference between the actual and legal interest.
• Meals, lodging, travel, and tourism: Employer's cost, including taxes.
• Insurance premiums and fees: Employer's cost, including taxes.
• Worker's study costs: Employer's cost, including taxes.
• Pension plan contributions and liabilities: Full amount.
• Other:

Demand: The quantity of a good or service that consumers are willing and able to purchase at a given price and time. Factors influencing demand include:

1. Price of the Good: Changes in price can increase, decrease, or maintain demand.
2. Prices of Other Goods:
   • Substitutes: Demand increases when the price of a substitute good rises.
   • Complements: Demand decreases when the price of a complementary good rises.
   • Independent: Demand is unaffected by changes in the price of other goods.
3. Consumer Income:
   • Normal Goods: Demand increases with higher income.
   • Inferior Goods: Demand decreases with higher income.
4. Consumer Tastes and Preferences: Popularity increases demand.

Supply: The quantity of a good or service that producers are willing and able to sell at a given price... Continue reading "Understanding Market Demand, Supply, and Competition" »