Notes, summaries, assignments, exams, and problems for 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" »

Investment Definition

To perform activities, a company needs a set of elements or factors of production. Thanks to the savings of different economic agents, companies can obtain the resources they need to carry out their investments and thus become eligible for benefits.

According to Pierre Massé: "Investment is the act whereby there is a change of instant gratification and a certain resignation to that for the hope that is acquired, of which the asset acquired is the support." Investment enables business growth.

Selecting Funding Sources

Several factors influence the selection of funding sources:

• The Type of Investment

  For financing current assets, funding sources may be short-term. However, if the asset is expected to remain with the company for

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

The Funnel Theory: Navigating Resource Scarcity

The Funnel Theory posits that businesses must innovate and adapt to declining resources and ecosystem services, coupled with increasing demand. This creates a challenging environment, a kind of funnel, through which businesses must navigate by being innovative, stakeholder-oriented, and long-term oriented.

Core Competencies for Sustainable Management

Effective sustainable management relies on several key competencies:

• Corporate Social Responsibility (CSR): This relates to enterprises managing stakeholder relationships and adhering to a code of conduct.
• Sustainable Development: This focuses on countries or global organizations addressing environmental concerns and the impacts of globalization.
• Business

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

General Tendering Procedures

General Tenders represent a formal procedure for selecting suppliers. Any registered supplier may participate, provided they comply with the specific conditions associated with each selection process. In this process, pre-selection acts, the receipt of bids, and the public opening of economic bids are critical steps leading to the final decision.

Conditions for General Tenders

A purchase is made via general tenders if the purchase request meets any of the following conditions:

• For the purchase of goods or contracting of services with an estimated value exceeding €60,000.
• For construction works with an estimated value exceeding €180,000.

The Bids Commission

Commission Purpose and Structure

The Bids Commission is a committee... Continue reading "Optimizing Procurement: Tendering and Supplier Selection" »