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

Understanding Globalization (Definition and Scope)

Globalization is defined as economic growth through trade—the willingness of countries to internationalize their economies, driven by technological improvement.

Key Aspects of Globalization

It manifests itself in several key aspects:

• Commercial and Technological: Related to trade and productive regulatory frameworks.
• Cultural: The transfer of ideas and norms across borders.
• Financial: The rise of capital transfer, allowing investment not only in one place but across many regions.

Economic Manifestations of Globalization

Trade Liberalization and WTO

This is achieved through:

• The World Trade Organization (WTO).
• Trade agreements between countries.

Changes in Global Production

Globalization has led to significant... Continue reading "The Dynamics of Globalization: Economic Blocs and Global Challenges" »

Key Business Approaches

3 Approaches:

• Work and organizations (planning, organizing, controlling)
• People (communication, motivation, leadership, work group formation)
• Production and operations

Essential Entrepreneur Skills

5 Critical Entrepreneur Skills:

• Leadership
• Communication
• Decision-making
• Teamwork
• Strategic Vision

Common Entrepreneurial Mistakes

5 Mistakes:

• Unclear goals
• Trying to prove you're smart
• Greed
• Hiring people they like instead of need

The 3 C's of Business

3 C's:

• Company
• Customers
• Competition

Start-Up Costs

Start-Up Costs:

1. Expenses (legal structure, workspace, remodeling, stationery, logos, web page)
2. Purchase assets (inventory, office supplies)
3. Ongoing monthly expenses (rent, utilities, payroll, insurance)
4. Monthly sales projections

Business Plan Components

Executive

Understanding Demand and Supply

A shift in the demand curve signifies a change in the quantity demanded at any given price. This is visually represented by a shift of the demand curve to a new position, resulting in a new demand curve.

Movements Along the Demand Curve

A movement along the demand curve represents a change in the quantity demanded of a good as a result of a change in its price.

Shifts in the Demand Curve

• A rightward shift reflects an increase in the quantity demanded at any price level.
• A leftward shift reflects a decrease in the quantity demanded at any price level.

Supply Curve Dynamics

A shift in the supply curve represents a variation in the quantity supplied at any given price. This is reflected in a shift of the supply curve to... Continue reading "Demand and Supply: Shifts, Movements, and Market Equilibrium" »

Competitive Forces Shaping Industries

1. Degree of Rivalry Among Competitors

   The intensity of competition in a sector depends on the number of competitors and the market growth rate. The market growth rate also influences the degree of concentration in the sector, determining how the market is distributed among competitors. The greater or lesser competitive pressure often depends on the maturity of the sector.

2. Threat of New Entry

   The entry of new competitors increases competitive pressure. The easier it is for a company to access a major sector, the greater the competition. Factors that create barriers to entry include:

   • An established edge of differentiation.
   • Lower costs for existing firms.
   • Firms with long-standing products and strong experience in the

The Law of Supply

The Law of Supply illustrates the relationship between the price of a good and the quantity supplied.

The Supply Curve

The Supply Curve is an upward-sloping curve that illustrates the relationship between price and quantity supplied.

Market Supply

Market Supply refers to the sum of all individual supplies from all sellers of a good or service. Graphically, individual supply curves are added horizontally to derive the market supply curve.

Determinants of Supply

Key factors influencing supply include:

• Market Price
• Input Prices (Factors of Production)
• Technology
• Expectations
• Number of Producers

Changes in Quantity Supplied vs. Supply Changes

A change in the quantity supplied refers to a movement *along* the supply curve, resulting solely from... Continue reading "Understanding Market Dynamics: Supply and Demand" »

Public Budget and the Economic Cycle

Understanding Deficits

• Deficit: A flow of new debt created when the state spends more than it collects in taxes.
• During recessions, public transfers increase and tax revenues decrease, leading to an increased budget deficit.
• Cyclical Deficit: The portion of the budget deficit that fluctuates with the economic cycle. It increases during recessions (when production is below potential GDP) and decreases during expansions (when production exceeds potential GDP).
• Structural Deficit: The portion of the budget deficit that remains independent of the economic cycle, stemming from structural imbalances between revenue and public expenditure. This is the deficit that persists even when production reaches its potential

Understanding the Chart of Accounts

The Chart of Accounts is a fundamental framework born from the normalization of accounting practices. This standardization aims to establish consistent criteria for companies, enabling homogeneous, reasonable, and valid comparisons across different periods and entities.

EU Directives for Accounting Normalization

The European Union (EU) has issued a set of rules to implement accounting normalization in its participating countries. These directives are crucial for harmonizing financial reporting:

• The Fourth Directive: Also known as the European Accounting Plan, this directive establishes the financial information that corporate accounting should provide.
• The Seventh Directive: This directive sets the requirements

Understanding Macroeconomics: Objectives, Instruments, and GDP

Macroeconomics deals with the study of phenomena that affect the entire economy, among which are inflation, unemployment, and macroeconomic growth. To analyze the performance of the economy, macroeconomics focuses on the study of Gross Domestic Product (GDP) or the general price level to make it easy to set concrete targets and design macroeconomic policy. This integrated set of measures, designed by the government to influence the progress of the economy as a whole, aims for objectives such as the growth of production, employment, and price stability.

Key Objectives of Macroeconomics

• Production Growth

  Having an abundant amount of goods and services is something all countries desire.

Industrial Acceleration and Economic Structure Change

The U.S. accelerated the growth of its industrial production, which was accompanied by a profound change in the economic structure. The expansion of the U.S. economy was based on a profound transformation of production dominated by:

• Technical innovation and changes in work organization.
• New energy sectors, particularly the widespread use of electricity and oil.

The most representative example of this transformation was the automobile industry, the first to apply mass production through assembly lines. All this occurred amidst a process of business concentration, resulting from strong competition driven by lowering prices.

Productivity Gains and the Consumer Revolution

The consequence of these... Continue reading "The Roaring Twenties: US Industrial Growth and Speculation" »

The Entrepreneur

An entrepreneur is a person who takes the initiative and assumes the risk in a company. This individual may be referred to as an autonomous social agent and is a leader in a cooperative or commercial enterprise.

Concept of Business

A business is an economic production unit whose purpose is to create or increase the utility of goods and meet human needs. The end goal of the company is to achieve the objectives it has set, seeking to maximize its benefits.

Company Features

• Common: Accounting, financial, administrative, and HR.
• Specific: Commercial, production, research.
• Other: Technical, security, R&D.

Elements of a Company

• Internal:
  • Materials: Land, buildings and installations, machinery and transport elements, stocks, money, clients,