Notes, abstracts, papers, exams and problems of Economy

Understanding Purchasing Power Parity

General Idea

A country's currency value, with respect to another, is determined by its purchasing power.

Two Applications of Purchasing Power Parity

1. To determine the exchange rate parity of purchasing power and use it for comparisons of social accounting.
2. As a theory that explains the relationship between price levels and the exchange rate.

Factors Influencing Exchange Rate Fluctuations

Parity Adjustments

Persistent or fundamental imbalances in the balance of payments can lead to changes in monetary parity, or the external exchange value of a currency. Parity can be adjusted upwards (revaluation) or downwards (devaluation), depending on whether there is a surplus or a deficit.

Devaluation allows exporters to receive... Continue reading "Understanding Purchasing Power Parity and International Monetary Systems" »

CRM

CRM is an integrated information system that is used to plan, schedule and control the pre-sales and post-sales activities in an organization. CRM embraces all aspects of dealing with prospects and customers, including the call center sales-force, marketing, technical support and field service. The primary goal of CRM is to improve long-term growth and profitability through a better understanding of customer behavior. -CRM aims to provide more effective feedback and improved integration to better gauge the return on investment (ROI) in these areas.

CRM: Support, sales, service, orders, analysis, mkt, strategy.

Strategic CRM is focused upon the development of a customer-centric business culture. –This culture is dedicated to winning and keeping... Continue reading "Understanding CRM: Strategies, Models, and Relationships" »

Key Economic Terms

GDP (Gross Domestic Product): GDP is the monetary value of all final goods and services produced within an economy over a specific period. It's calculated by summing the value of production across all sectors of the economy, subtracting the value of intermediate goods used in the production process.

Income per Capita: This economic measure is derived by dividing the total income earned by the entire population of a country or region.

Multinational Corporation: A company with production or distribution operations in multiple countries. Multinationals can expand their operations globally and relocate industrial plants from one country to another.

Balance of Payments: A document that records all economic transactions between a country... Continue reading "Key Economic Terms: GDP, Income, Trade, and Industry" »

Coordination and Control Bases

In the model of team production, activities are coordinated and determine the productivity of team members. Determining the individual productivity of team members is hampered by technical issues and opportunistic behavior. This requires mutual monitoring and production standards, often overseen by a supervisor to prevent avoidance. This incurs costs for the company.

To produce efficiently, companies must manage two types of costs:

• Costs of collective action
• Control costs

Thus, there are two lines of organizational guidelines:

• Hierarchical organizational solutions
• Participatory organizational solutions

Hierarchical solutions are based on mutual surveillance among members or supervision by a higher authority. When a supervisor... Continue reading "Coordination, Control, and Agency Problems in Organizations" »

Understanding the IMF and Global Debt

The International Monetary Fund (IMF) was initially created to rebuild Europe after World War II. The U.S. provided aid to Europe, especially England and Germany. The IMF is formed with representatives from all member countries.

Funding for the IMF, the Paris Club, the Inter-American Development Bank (IDB), and other central banks (BCOs) comes from various sources, including private entities.

John Maynard Keynes was a key figure in the establishment of the IMF.

Debt Restructuring in Argentina

Amado Boudou served as Minister of Economy.

Lavagna achieved a reduction of external debt through a Debt Exchange Plan, also known as an Operation Exchange.

This involved restructuring approximately $170 billion in debt,... Continue reading "Understanding the IMF, Debt Restructuring, and Argentina's Economy" »

MA 1

What Is a Company?

Companies are the foundation of our economic system. A company is an entity that integrates a set of items organized and operated to achieve a set of goals through the implementation of a particular economic activity.

All this must be addressed and organized by a figure known as the entrepreneur.

• Types of Companies: Depending on the size (small, medium, and large), scope (local, national, and multinational), or economic activity (primary, secondary, tertiary).

Sole Trader: A person who conducts a business activity on their own.

Functions and Objectives of a Company

Features:

• Creation of value: New gadgets, mobile devices, etc.
• Social function: Companies provide the necessary income to live through wages paid to employees or the

Advertising

: publicidad

Brand

: marca: a commercial name

Budget

: Presupuesto: an amount of money to be used

Company profile

: perfil d la empresa

Competitors

: competidores: company selling similar products to you

Consumer goods

: bb d consume: a product for normal life

Customers

: clients

Employ

: dar trabajo: to give job

Employees

: empleados: people who work for a company

Expand

: xpandir: to become bigger

Figures

: cifras: a company total annual sales

File

: archivo: to organize papers and documents so they are easy to find

Financial advise

: asesoramnto financero

Found

: fundar: to create

Head office

: sede

Household white goods

: electrodmstics electrodomestical appliances used at home such at a fridge (nevera)

Improve

: Mejorar: to make something better

Launch

: lanzar... Continue reading "Business Vocabulary and Definitions" »

Company Financial Cycles

Companies constantly carry out investments. A business begins with the input from one or more members of a sum of money with which to make different investments. The company acquires, on the one hand, elements of fixed assets: plant, machinery, etc. And, secondly, circulating elements: raw materials and other supplies. With these investments and hiring labor, the company begins its activity. Thanks to the production and marketing functions carried out, it manufactures and sells a product. When the company charges the amount of sales, it returns to money. This process is repeated continuously throughout the life of the company. This gives rise to two cycles: the long cycle and the short cycle.

The Long Cycle

The long cycle... Continue reading "Understanding Company Financial Cycles and Resources" »

Economic Goods

Finished Goods: These are products that consumers purchase to satisfy their needs.

• Free Goods: Abundant in nature (e.g., water, soil, air).
• Economic Goods: Limited in quantity, requiring financial sacrifice to obtain (e.g., oil, timber, gold).

Services and Assets

Services: Intangible assets (e.g., bartender services, healthcare, education).

Assets: Tangible products (e.g., tables, clothing, food).

Types of Produced Goods

• Goods Used in Production: Used to create finished products.
• Part of the Product: Consumed during production (e.g., furniture-making materials).
• Not Part of the Product: Used but not consumed (e.g., ovens, machines).

Consumer Goods

Consumer Goods: Finished products ready for consumption (e.g., clothing, televisions).

Goods

Crisis Management

What is a Crisis?

A crisis is an extraordinary event or series of events that negatively impact an organization's product integrity, reputation, or financial stability, or the health and welfare of workers, the community, or the general public.

Examples of Crises:

• Product recall
• Plane crash
• Public sexual harassment complaint
• Hostage situation
• Product contamination
• Market/stock crash
• Indefinite strike
• Lawsuits

Crises are not always unexpected. Often, the organization is aware of the situation before the public.

Types of Crisis Responses

1. Defensive Responses

These are less effective if the organization is held responsible for the crisis.

a. Attacking the Accuser

This involves questioning the crisis's validity, challenging the logic and facts... Continue reading "Crisis Management: Defensive & Accommodative Responses" »