Notes, abstracts, papers, exams and problems of Economy

Key Elements of Internal and External Organization

Internal and External Organization: Employees, shareholders, board, customers, unions, government.

Skills Hierarchical Levels:

• Upper Management: Conceptual skills
• Management Rating: Humanistic
• Line Management: Technical skills

Systems in the Organization: Highly interdependent subgroups, considers open, dynamic, stochastic systems.

Properties of Systems: Objectives, performance measures, decision-making process, information flow.

Organizational Structure: Refers to the way in which organizations divide, combine, and coordinate activities, focusing on relationships between managers and employees.

Why is an Organizational Structure Important?

• Dividing work
• Assigning tasks
• Coordinating tasks
• Grouping work

Six

Causes of Unemployment

The unemployed population comprises people who are able to work and seek employment but cannot find it.

Neoclassical Theory

According to neoclassical theory, if the labor market operated freely and wages were flexible, unemployment would not persist. Any excess supply of workers would cause the market mechanism to adjust by lowering wages. Lowering wages would encourage companies to hire more workers, and unemployment would disappear. However, in reality, wage rigidity prevents the adjustment of supply and demand. This is often attributed to the actions of unions and government intervention. Unions strive to improve working conditions for workers, and the existence of a minimum wage, set by the state to ensure that people... Continue reading "Understanding Unemployment: Causes, Types, and Solutions" »

General Tax Base

The General Tax Base is calculated by adding the following balances:

• a) Positive or negative balance resulting from integrating and netting income and imputations following income:
  • Performance of work.
  • Performance of real estate.
  • Performance from movable capital: intellectual property, technical assistance, rental property, business or mine, sublease, and assignment of rights of image.
  • Income from economic activities.
  • Allocation of income from: Real Estate, controlled foreign company regime, transfer of image rights, investment institutions.
• b) Surplus of integrating and netting of gains and losses, not from the transfer of assets and liabilities, such as the additions of property and rights to the assets of the taxpayer, from, for

Timeline of Inventions and Events

• 1732: Darby invented coke
• 1733: Invention of the flying shuttle
• 1769: James Watt invented the steam engine
• 1785: Invention of the loom
• 1829: Stephenson invented the locomotive
• 1864: International Association of Workers
• 1869: Invention of the dynamo
• 1885: Invention of the explosion
• 1889: Second International
• 1897: Invention of the transformer

Agricultural Innovations

Norfolk System: Replacement of fallow by suppression of herbage allowed to leave no piece of land at rest and obtain arable crops that feed livestock.

Economic Policies and Systems

Free Trade: Economic policy that removes barriers to the free circulation of products between countries.

Market Economy: It resulted in production not for subsistence but for sale in... Continue reading "Key Events and Concepts of the Industrial Revolution" »

Global Crisis Expansion

The U.S. crisis reverberated across Europe and the world. Capitalist prices plummeted, unemployment soared, and industry and international trade plunged.

The mechanisms for this crisis expansion were:

• Declining U.S. prices due to intense competition.
• Falling demand, reduced imports, and exports.
• Decreased investment and loans due to the stock market crash. U.S. capital repatriation spread the crisis.
• The collapse of world trade due to protectionist policies in the U.S. and other countries. International trade plummeted, affecting food-exporting countries in Latin America and Asia. Reduced income prevented loan repayments, further decreasing demand from industrialized nations. Japan and Latin America were also significantly

Elements Involved in Economic Activity

We assume that our economy is a mixed system. A country's economy interacts with other countries, leading to exports and imports. With these assumptions, the elements are:

• Families and consumers
• Companies and producers of goods and services
• Government
• Non-governmental organizations (NGOs) or non-profit institutions
• The rest of the world, which has commercial relations

These interactions produce a cycle with a series of activities that lead to cash flows and real flows. Real flows occur when property is transferred; money flows occur when money is handled. This activity should be quantified (i.e., expressed in monetary units), which we call accounting. This accounting is necessary to:

• Determine the level of development

Tax Exemption and No Liability

We have established that a taxable event gives rise to a tax. However, in cases of no liability, the taxable event is not completed, and therefore, no tax liability arises. This means that if no taxable event occurs, there is no liability.

An exemption occurs when a taxable event takes place, but the legislature has provided a factual assumption that prevents the tax liability from arising. Article 22 of the LGT defines exemption as follows:

"Exemptions are those assumptions that, despite being taxable, the law exempts from compliance with the principal tax liability."

Methods of Determining the Tax Base

The taxable amount is the monetary value resulting from the measurement and valuation of the taxable event.

There... Continue reading "Tax Exemption, Base Calculation, and Tax Liability" »

Stock Valuation

Purchase price and manufacturing cost: Purchase Price: This is the cost that includes the supplier's price and all additional costs incurred until the merchandise is in the buyer's stock. These expenses are:

• Transportation: the cost of transporting goods to the warehouse. This expenditure is called postage or freight. Also, include the costs of loading and unloading if these are borne by the carrier.
• Insurance: The goods to be transported can be insured to prevent possible incidents: breakage, shortages, accidents, etc. According to the market value, the insurance premium will be higher or lower.
• Packaging: the cost of the goods' packaging.
• Customs duties: when the goods come from a non-EU country, you may have to pay tariffs (taxes)

Economic Reasons for Trade

One usual chapter in any economy manual explains the benefits of trade. We know that trade between two countries is beneficial when one of them produces a product more efficiently, or when the destination country cannot produce it at all. For example, Equatorial Guinea can sell bananas to Finland, and Finland can sell reindeer meat to Equatorial Guinea. While it might be possible to grow bananas in Finland using greenhouses with adequate insulation, it doesn't make sense because it will always be cheaper to get them from Guinea, even considering the cost of transport. The same logic applies in reverse to reindeer meat.

There is also no doubt that international trade can provide Spain with oil, which in turn can offer... Continue reading "Economic Benefits of International Trade: Absolute & Comparative Advantage" »

Euribor

Euribor, an acronym for European Interbank Offered Rate, or European interbank offered rate, is the interest rate applied to transactions between banks in Europe. It represents the percentage rate a bank pays when another bank lends it money. This index is computed from the offer prices of the loans made to each of 64 major European banks. For example, 1.243%.

Simple and Compound Interest

• Simple: Characterized by the interest generated in each time period not accumulating to the capital. Consequently, the interest for the next period is always calculated on the initial capital.
• Compound: Characterized by the interest generated in each period being accumulated to the capital prior to calculating interest for the following period.

Discounting