Notes, abstracts, papers, exams and problems of Economy

Business Classification Criteria

Businesses can be classified according to several criteria:

• Economic Sector: Primary, secondary, and tertiary.
• Capital Ownership: Private, public, and mixed.
• Operational Area: Local, national, and multinational.
• Size: Micro-enterprise, small business, medium business, and large enterprise.
• Legal Form: Individual entrepreneur (sole proprietorship or community property) and corporate entities (civil societies, corporations, cooperatives).

Functions of the Human Resources Department

The Human Resources (HR) department has several key functions:

• Organize and Plan the Workforce: Align the workforce with the company's organization by designing jobs, defining responsibilities, and outlining staff duties.
• Recruit and Select:

Services are activities offered for sale.

Types of Services

Service highlights include:

• Banks and similar institutions
• All types of insurance
• Clinics, hospitals, and gyms
• Spiritual care services
• Rental services for private or industrial properties, apartments, and offices
• Transportation, storage, and communication services
• Classic business services: maintenance, cleaning, and information
• Freelance professional activities, such as architects
• Information management services: TV and film
• Hotel and restaurant services
• Marketing services, advertising agencies, and market research

Classification of Services

Nature of Service

• Depending on who or what receives the service:
  • Person or consumer: consumer services
  • Animal: veterinary services
  • Object: automobile repair
  • Company:

1.4) Economic Development under Franco (1939-1959)

1.4.1) Self-Sufficiency & Liberalization (to 1959)

Until 1959, the Spanish economy was marked by stagnation and a focus on agriculture. The 1959 Stabilization Plan initiated economic expansion.

a) Autarky, Stagnation, and Rationing (1939-1951)

Economic policy aimed for self-sufficiency. The primary goal was to prevent famine.

• Agricultural Policy: Focused on production recovery and returning expropriated land.
• Industrial Policy: The 1941 National Institute of Industry aimed to boost basic industries, hindered by resource and equipment shortages.

Autarky and interventionism led to:

• Emphasis on light industry over basic industry.
• Increased monopolies.
• Significant state investment.

b) Beginning of Liberalization

Classical Economics

Adam Smith (1723-1790)

Key Work:

Inquiry into the Nature and Causes of the Wealth of Nations or The Wealth of Nations (1776)

Core Principles:

• Personal Freedom
• Private Property
• Private Companies
• The benefit of one is the benefit of all
• Minimal government intervention in the economy
• The invisible hand regulating the economy
• Natural order dictates minimal state intervention
• Laissez-faire, laissez-passer (let it be, let pass)

Role of Government:

• Protection against injustice and oppression
• Sustaining public institutions
• Infrastructure development

Theory of Value:

• Use value (value of goods)
• Exchange value (ability of an asset to be exchanged for others)

David Ricardo

Key Work:

Principles of Political Economy and Taxation

Core Ideas:

• Political economy

Item 14: International Trade, Balance of Payments, and Exchange Rates

1. International Trade

International trade is the exchange of goods and services between countries.

2. Barriers to International Trade

Some countries place restrictions on international trade through protectionist measures that restrict or distort trade. This may be done to protect strategic sectors, maintain employment, or compensate for imbalances when imports exceed exports.

• Tariff: A tax on imports of goods from another country.
• Quotas: Limitations on the number of goods that can be imported.
• Measures of equivalent effect: Barriers to imports through complex bureaucratic procedures, eventually reducing imports.
• Dumping: A company sells its products at a loss to eliminate competition.

Factors Influencing the Effectiveness of Fiscal Policy

1) The Flexibility of Aggregate Supply:

Aggregate supply must be flexible enough to absorb demand-pull. Otherwise, expansionary fiscal measures may increase production, but at the expense of generating inflation. In rigid situations, fiscal policy may be ineffective in achieving internal balance.

2) The Nature and Flexibility of Intermediate Objectives:

Net external demand is a standalone component that should not be regarded as an intermediate target of budget policy stabilization. By contrast, the behavior of exports and imports is a determinant of economic growth.

[And domestic demand... is it better to act on consumption or investment?]

Private Fixed Capital Formation (FBC) is not raised... Continue reading "Fiscal Policy Effectiveness: Key Factors" »

Tax Quotas, Deductions, and Filing Requirements

How are state and regional liquid quotas calculated?

The liquid state share is derived from the full state share, after applying a percentage of total deductions (e.g., 67% of general deductions in 2009) and deducting for rent of residence. The result cannot be negative. The liquid regional share is calculated by subtracting from the regional share a percentage of state deductions (33%), the regional portion of the deduction for primary residence investment, and the amount of autonomous deductions.

How is the differential fee calculated?

The differential fee is obtained by adding the liquid state and regional assessments, and then subtracting deductions for double taxation of dividends, international... Continue reading "Tax Quotas, Deductions, and Filing Requirements Explained" »

Supply Chain Management

Effective supply chain management ensures product availability in the required quantity and quality, at the right time, and under optimal financial conditions. It involves three key functions:

Core Functions

• Purchasing: Acquiring necessary raw materials, products, and/or services in the right amounts, timing, quality, and at the lowest cost.
• Storage: Ensuring timely access to items in adequate quantities and qualities.
• Inventory Management: Maintaining optimal stock levels to maximize service and minimize costs.

Purchasing Decisions

Key parameters considered in purchasing decisions:

Decision Parameters

• Quality: Product characteristics ensuring suitability for intended use.
• Price: Total cost of the purchased product, aiming for

Key Economic Indicators

Introduction

Economic indicators help us understand the national economic situation. But who studies these indexes?

• Microeconomics: The study of how households and firms make decisions and interact in the market.
• Macroeconomics: The study of phenomena that affect the whole economy.

Consumer Price Index (CPI)

The CPI is an indicator of the cost of goods and services purchased by a typical consumer.

How is the CPI Calculated?

1. The basket is set.
2. Prices are found, and the value of the basket is calculated.
3. A base year is chosen, and the index is calculated.
4. The inflation rate is estimated.

Dollar

The dollar is the most widely used foreign currency in Chile and is responsible for various transactions, mainly abroad.

Gross Domestic Product

Assets

Current Assets

Cash

Money in the form of bank notes, coins, checks, credit card receipts, bank drafts, postal orders, etc.

Bank Deposits

Value of deposits held in financial institutions.

Inventory

Goods purchased for resale.

Accounts Receivable

Amounts owed to the business by customers for goods sold on credit.

Notes Receivable

Written promises to pay a specific sum of money, such as bills of exchange and promissory notes.

Other Receivables

Amounts owed to the business by individuals or entities other than customers.

Non-Current Assets

Land

Property owned by the business.

Buildings

Structures owned by the business.

Furniture and Equipment

Desks, chairs, tables, bookcases, scales, display cases, etc.

Computer Equipment

Central processing units, monitors, keyboards,... Continue reading "Understanding Business Accounting Elements" »