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

Macroeconomics: Key Factors and Impacts

Factors

Internal market forces: Population growth, investment spending, technological innovation.

External shocks: Wars, climate conditions.

Macroeconomic policies: Tax spending.

Resulting Objective Variables

• Economic growth
• Inflation
• Employment and unemployment
• Public deficit
• External deficit
• Exchange rate

Types of Unemployment

• Cyclical Unemployment: Occurs when there are idle workers and insufficient resources to employ them all.

• Seasonal Unemployment: Caused by changes in labor demand at different times of the year.

• Frictional Unemployment: Related to the normal functioning of the labor market.

• Structural Unemployment: Due to imbalances between the qualifications or location of the workforce and the qualifications

Perfect Competition

Perfect competition describes a market structure where numerous small firms compete against each other. In a perfectly competitive market, no single firm has any significant market power. As a result, the industry as a whole produces the socially optimal level of output, because no firm can influence market prices. The price is determined by the free interplay of supply and demand.

Monopoly

A monopoly is a market structure composed of a single company or group that dominates the entire supply of a particular good or service.

Oligopoly

An oligopoly is characterized by the existence of a limited number of suppliers who exert some control over the price and are mutually interdependent.

Monopolistic Competition

Monopolistic competition... Continue reading "Market Structures: Perfect Competition to Monopoly" »

Industrial Transformation and Early Innovations

The chemical industry underwent significant transformation to meet the demands of textile dyeing and the production of vast amounts of bleach. A notable development was the invention of the Roebuck lead chamber process by 1746, crucial for sulfuric acid production. The momentum for metal manufacturing, particularly machinery, originated from the needs of the textile industry. However, gradually spreading mechanization consolidated this new industry, dedicated to manufacturing machines. Another rapidly growing sector during this period was construction.

Economic Liberalism and Classical Thought

Economic liberalism emerged in the eighteenth century, championed by the Classical School of economists.... Continue reading "Foundations of Modern Industry and Economic Principles" »

What is Recommended for the Company's Shareholders?

A negative yield indicates that the financial returns from our assets are less than the cost of capital. Therefore, considering the company's viability, it is crucial to increase profitability, especially via the sales margin, which has deteriorated remarkably in recent exercises. Another solution, facing third parties like financial institutions, could be to increase the level of equity, thus reducing the company's indebtedness. By having less debt (and having profitability below the cost of capital), the financial profitability would automatically improve. However, this would be a fictitious improvement. It would improve the financial profitability of the company, but not that of the shareholders.... Continue reading "Improving Company Profitability and Shareholder Value" »

Classification of the Sources of Financing

Funding is used to obtain financial resources (money) to cope with the expenses and investments that the company needs to develop its activity. While selecting the most appropriate financing instruments, the cost, time, and purpose will be taken into account.

Two Types of Financing

Own Funding (Net)

Own funding sources belong to the company or its owners.

Advantages: No cost to the company.

Disadvantages: No sharing of profits or dividends, or reservations.

• Resources obtained: Profits.
• Grants: Funds received from public agencies and private losses.
• Enrichment of self: The distribution of reserves.
• Autofinancing maintenance: The funding is aimed at maintaining domestic production capacity.

External Funding (Liabilities)

Key Economic Concepts and Systems

Technology: Refers to the methods used to combine various factors of production to create a good or service.

Production Possibilities Frontier (PPF)

The PPF illustrates the maximum quantities of goods and services that a society can produce within a given time period, considering its available factors of production and technological knowledge.

Economic Growth

Economic Growth is the increased value of the production of goods and services by a company or economy over a period of time.

Productivity

Productivity is the relationship between the quantity of goods and services produced and the factors used in their production.

Concepts Illustrated by the PPF:

• Scarcity of Resources: Limited resources determine the number of

Job Offer

Understanding the aggregate job offer involves analyzing different curves that indicate the quantities of labor individuals are willing to exchange for a determined wage. This is closely related to the population. If there are many births, this causes an increase in the job offer. Conversely, if births decline, the population stagnates or falls, leading to a decrease in future labor supply.

• Migration will cause a drop in the labor supply in the country of origin and an increased supply of labor in the destination country.
• Societal values play a significant role in labor. One consequence of the equality of women and their changing roles is the incorporation of female social work outside the home. This causes an increase in labor supply.

Key Economic Concepts

Assumptions: Scenarios are taken as certain without testing them. Model: Partner assumptions and develop theories. Microeconomics: This branch of economics studies the behavior of individual entities (market, household). Macroeconomics: This is the behavior of the economy in general (unemployment, inflation). Positive Economics: Explains and analyzes the causes of economic behavior. Normative Economics: What should be. Factors of Production: Factors of production (goods or services) and primary products that are consumed. FP: Land, Labor, Capital and raw materials.Shortage: Limitation of resources. Economic good: A limited range.

Opportunity Cost: When we decide to use a resource in one way and not another. PPF: Maximum

1. MINIMUM STANDARDS

Rule 102 of the ILO: 100% of the workforce should be protected for at least 20% of the economically active population (PEA). 50% of the total population protected (PTA). 100% of the polar groups (risk groups), the very old or very minor (GP). 100% of excluded groups.

1. Describe the characteristics that motivate the German model and the English model.

   German model:

   The industrial revolution - Public assistance by Asin - there was not a labor law - the concentration of labor - Accidents at work.

   English model:

   - Unemployment - housing - death - the German model is limited to persons who had an employment relationship.

   Bismarck Model: Characteristics

   1. Tripartite
   2. Governance
   3. Specialized
   4. Compulsory employer and employee contributions

2. English Model:

Understanding Public Externalities

Public externalities are generated when an action has an effect on third parties. The externality can be positive or negative, depending on the effect generated.

• A public good is a good or service that is non-rival and non-excludable.
• For example, public education can be considered an externality. It is non-rival and non-excludable, generating a positive externality because its private cost is less than the social cost.

Real GDP and Economic Growth Measurement

Real Gross Domestic Product (GDP) measures a country's economic growth. The index indicating the annual percentage of GDP growth is the GDP deflator, which is obtained by dividing nominal GDP by real GDP and multiplying by 100.

The key difference between nominal... Continue reading "Key Concepts in Microeconomics: Markets, Growth, and Pricing" »