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

Unemployment Types and Dynamics

Unemployment is a multifaceted economic phenomenon, categorized into several distinct types based on its underlying causes.

Frictional Unemployment

Frictional unemployment arises because both workers and firms need time to locate each other and to digest the information about the value of a potential job match. It is a natural part of a dynamic labor market.

Structural Unemployment

Structural unemployment occurs if the skills or characteristics of persons looking for work do not "fit" the jobs available. This mismatch can be due to technological changes, shifts in industry, or geographical immobility.

Cyclical Unemployment

Cyclical unemployment arises because the economy has moved into a recession. During such periods,... Continue reading "Labor Market Concepts: Unemployment, Wages, and Discrimination" »

The 2008 Economic Crisis and Unemployment

In 2008, a significant economic crisis began, impacting the entire world, especially Europe. The most noticeable consequence has been high unemployment.

Understanding the Unemployment Rate

The unemployment rate is the percentage of the total labor force that is unemployed but actively seeking employment and willing to work.

Unemployment Trends in the European Union (2008-2014)

In the European Union, between the start of the crisis in 2008 and 2013, the unemployment level rose to a rate of 10.9%. However, since 2013, it has begun to decrease, reaching 9.9% by the end of 2014, largely due to the slow recovery of the economy.

European Countries with Varying Unemployment Rates

Currently, countries with lower unemployment... Continue reading "Unemployment in Europe: Crisis, Youth, Long-Term, and Brain Drain" »

·MONOPOLISTIC ADVANTAGE:

Suggests that FDI is preferred by MNEs because it provides the firm with control over resources and Capabilities in the foreign market, and a degree of monopoly.

Differences Between Products and Services and Marketing Plan Considerations

What are the major differences between products and services, and how must these differences be taken into consideration when preparing your marketing plan?

The Four Key Differences Between Products and Services

1. Intangibility

• While products are tangible, services are intangible (they cannot be touched or tested before purchase).
• Buyers look for evidence of quality by drawing inferences from the place, people, equipment, communication material, symbols, and price.
• Service marketers must transform intangible services into concrete benefits. This requires choosing strong brand elements (logos, symbols, characters, and slogans).
• All aspects of the service delivery process can

Cornell Enterprises Project Evaluation

Use the following information for questions 1-4. Cornell Enterprises is considering a project with the following cash flow data, assuming an interest rate of 11%.

• Year 0: -$700 (Initial Investment)
• Year 1: $300
• Year 2: $350
• Year 3: $400

1. Calculate the Project’s NPV

To find the Net Present Value (NPV), we input the cash flows and the interest rate into a financial calculator or formula.

Inputs:

• CF0 (Initial Cash Flow): -$700
• C01 (Cash Flow Year 1): $300
• F01 (Frequency Year 1): 1
• C02 (Cash Flow Year 2): $350
• F02 (Frequency Year 2): 1
• C03 (Cash Flow Year 3): $400
• F03 (Frequency Year 3): 1
• I (Interest Rate): 11%

Result: The project's NPV is $146.81.

2. Calculate the Project’s IRR

Using the same cash flow data, we can compute... Continue reading "Calculating NPV, IRR, Payback, Stock Splits & Repurchases" »

Economic and Monetary Union

The Economic and Monetary Union (EMU) is an instrument to further the objectives of the European Union and improve the lives of citizens in the Member States. The operations and management of the EMU are designed to support sustainable economic growth and high employment through appropriate economic and monetary policy-making. It involves four main economic activities:

• Implementing an effective monetary policy for the euro area
• Coordinating economic and fiscal policies
• Ensuring the smooth operation of the single market
• Supervising and monitoring financial institutions

Monetary Policy

Monetary policy involves influencing interest rates and exchange rates to benefit a country's economy. It is managed through the European... Continue reading "Economic and Monetary Union: Understanding EU Financial Stability" »

Dimensions of Corporate Social Responsibility (CSR)

ETNOR Model

The ETNOR Model establishes the dimensions of CSR based on the type of responsibility that the action generates and the social expectations generated by each of them:

1. Philanthropic Responsibility

• Resources provided by companies with social, educational, recreational, and cultural purposes
• Contribute to the community in which they are located
• Desired by some stakeholders of the company

2. Ethical Responsibility

• Obligation to do what is right even if companies are not required by law
• Expected by some stakeholders

3. Legal Responsibility

• Obey laws, adhere to regulations
• Required by some stakeholders

4. Economic Responsibility

• Be profitable
• Maximize return on sales
• Minimize costs
• Make appropriate

Advertisement

Item of publicity to promote a product or service in newspapers, magazines, on TV, etc.

Advertising Agency

Marketing services firm that assists companies in planning advertisements.

AIDA

Attention, Interest, Desire, Action - the aim of all advertising.

Benefit

Advantage of a product or service.

Billboard

Signboard or wooden structure used to display advertising posters.

Broadsheet

Newspaper printed in a large format.

Campaign

Organised course or plan of action.

Circulation

Average number of copies of newspapers or magazines sold over a period of time.

Classified Ads

Small advertisement in newspapers or magazines divided into categories.

Commercial

Advertisement on radio or television.

Coupon

Part of a printed advertisement to be used to order goods... Continue reading "Advertising Glossary: Key Terms and Definitions" »

The EU Single Market: Driving Economic Growth and Prosperity

The European Commission estimates that EU GDP is 1.8% higher thanks to the Internal Market. Additionally, employment is 1.46% higher, which means that around 2.5 million extra jobs have been created.

Economic Impact and Regional Cohesion

Over the last ten years, the Internal Market has increased the Union’s GDP by €877 billion. These figures are likely an underestimate of the full impact of the Internal Market. The combination of the Internal Market and cohesion policies has ensured that these benefits have not missed the poorest regions of the Community, as many feared they would. In fact, the opposite has happened, as many of these regions have actually enjoyed the highest growth

Depreciation

Decline in value of long-term tangible assets such as buildings, furniture, or equipment. It is systematically recognized by accountants as depreciation expense over the useful lives of the affected assets.

Accrued Expense

Expenses that are recognized before cash is paid. An example is accrued salaries expense.

Book Value

Historical (original) cost of an asset minus accumulated depreciation to date.

Callable Bond

Bonds that the issuer, at its option, may pay off prior to maturity.

Amortization

(1) Systematic and periodic allocation of the costs of intangible assets to expense over their useful lives; (2) periodically transferring the discount on a note or a bond to interest expense.

Cash Equivalent

Investments securities that are for short-... Continue reading "Understanding Financial Accounting: Key Terms and Definitions" »