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

1) Business and New Technologies

Working from Home

Nowadays, new technologies are transforming the business landscape. This composition will explore some of these impactful technologies.

Firstly, working from home has emerged as a prominent trend. This new technique allows individuals to work for a company remotely, eliminating the need to be physically present in the workplace. Working from home offers both advantages and disadvantages.

Advantages of Working from Home

• Cost Savings: Working from home allows individuals to save on various costs associated with commuting to work.
• Flexibility: Workers can enjoy the flexibility of choosing their own work hours, lighting, and overall work environment, enabling them to work in a framework that maximizes

Cost Accounting

Cost Accounting is a branch of accounting and has been developed due to limitations of financial accounting. Financial accounting is primarily concerned with record keeping directed towards the preparation of Profit and Loss Account and Balance Sheet. It provides information regarding the profit and loss that the business enterprise is making and also its financial position on a particular date. The financial accounting reports help the management to control in a general way the various functions of the business but it fails to give detailed reports on the efficiency of various divisions. The limitations of Financial Accounting which led to the development of cost accounting

Objectives of Cost Accounting

1. To analyse and classify

Business Combinations

1- Horizontal Combination

• Advantages: minimization of costs, maximization of profits, reduction of the possibilities of overproduction.

2- Vertical Combinations

Entrepreneur is a person who recognizes opportunities and takes risks while operating a business.

Free Enterprise freedom of private business to organize and operate for profit in a competitive system without interference by government

Capital is the money or property owned or used for business

Opportunity Cost is the value of what must be given up to get something else

Business Plan Elements :

• Idea/product : Know what the product is and what it does, Is it realistic or practical? Will it fill a gap in the market?
• Market Research : How can you use customer feedback? You can use that to implement changes to be successful.
• Production : What is the production cost? How will you test the quality of the product? How will you make it ?
• Finance : Know the

Business Structures and Liability

Sole Proprietorship

A business owned by only one person.

Partnership

A business owned by two or more persons who share the risks and rewards.

Corporation

A business treated by law as separate from its owners.

Cooperative

An organization or business owned and operated by its members, who pool their resources and share the benefits.

Unlimited Liability

Full legal and financial responsibility for a business.

Limited Liability

Financial responsibility of business owners only for what they invested in the business.

Nonprofit Organization

A business whose main purpose is to provide a service rather than to make a profit.

Supply Chain, Operations, and Ownership

Producer

A business that gathers raw materials in their natural state.... Continue reading "Essential Business Definitions and Legal Compliance" »

Understanding Key Macroeconomic Balances

National Accounts & Economic Identities

• Current Account Balance + Capital Account Balance = Net lending (+) / Net borrowing (–)
• CAB + Capital Account Balance = Financial Account Balance – Errors and omissions
• Gross Domestic Product at market prices (GDPmp) = Final Consumption Expenditure (FCE) + Gross Fixed Capital Formation (GFCF) + Exports (X) – Imports (M)
• Gross National Income (GNI) = GDPmp + Net Primary Income with RoW (NPI)
• Gross National Disposable Income (GNDI) = GNI + Net Secondary Income with RoW* (NSI)
• * net current transfers with RoW
• GNDI = GDPmp + NPI + NSI
• GNDI = FCE + GFCF + X – M + NPI + NSI
• X – M + NPI + NSI = Current Account Balance
• Domestic Demand = FCE + GFCF
• GNDI – Domestic Demand

Product Differentiation

Product differentiation involves making a product distinctive so that it stands out from competitors' products in consumers' perception.

Niche Marketing

Niche marketing involves identifying and exploiting a small segment of a larger market by developing products specifically to suit its needs.

Direct Competitor

A direct competitor refers to businesses that provide the same or very similar goods or services.

Societal Marketing

Societal marketing is an approach that considers the demands of consumers and the effect on all members of public society involved in some way when firms meet these demands.

Mass Marketing

Mass marketing involves selling the same products to the entire market with no attempt to target specific groups within... Continue reading "Essential Marketing & Business Terminology Defined" »

Labor Market Metrics and Definitions

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• Labor-Force Participation Rate: (Employed + Unemployed (Labor Force)) / Adult Population.
• Unemployment Rate: (Unemployed) / (Labor Force).
• Employment Rate: (Employed) / (Adult Population).

Types of Unemployment

1. Frictional: Temporary unemployment arising during the job search process (voluntary).
2. Structural: Unemployment caused by restructuring of the economy or institutions. This includes sectoral shifts (changes in industrial structure) (involuntary).
3. Cyclical: Unemployment related to the business cycle (economic fluctuations). This rate is zero at full employment.

Why the Unemployment Rate Underestimates Unemployment Status

The unemployment rate does not fully capture the status because it excludes discouraged... Continue reading "Key Labor Economics and Monetary Policy Concepts" »

Which of the following is a flow variable? income

Which of the following is a component of money?

Which of the following is a component of money?