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

Chapter 9.1: Introduction to International Political Economy

Expanding membership—cultural criteria and institutional workability

• What makes a country “European”?
• Wealth gap: Luxembourg $102,000 vs. Moldova $1,900
• Comparison: Massachusetts $65,000 vs. Mississippi $31,800

The study of the interactions between states and markets in an increasingly globalized world.

What is Globalization?

The process of increasing integration of the world in terms of economics, politics, communications, social relations, and culture.

Increasingly seen as undermining traditional state sovereignty.

Mercantilism

• 15^th–18^th Century: European states dedicated to pursuit of economic wealth
• Encourage exports over imports
• Industrialization over agriculture
• Protect domestic

Types of Taxes

• Income Tax: A percentage of individual earnings filed with the federal government.

• Corporate Tax: A percentage of corporate profits taken as tax by the government to fund federal programs.

• Sales Tax: Taxes levied on certain goods and services.

• Property Tax: Based on the value of land and property assets.

• Tariff: Taxes on imported goods, imposed to strengthen domestic businesses.

• Estate Tax: A rate applied to the fair market value of a property at the time of death.

Understanding Tax Fraud

Tax fraud involves failing to pay the government (e.g., town council, provincial government) the taxes corresponding to income or benefits obtained during a specific period.

• Tax Evasion: Involves concealing income (either domestically or in other countries,

Core Business Terminology

Retrenchment: This occurs when a business cuts its workforce and closes factories; it is also referred to as downsizing.

Commission: A form of payment to an agent, often calculated on a percentage basis of sales made.

Regional trading bloc: An organization of countries that have formed economic alliances for mutual benefit.

Corporate Social Responsibility (CSR): A voluntary approach by businesses that recognizes they have an obligation to assess and take responsibility for the organization's effects on the environment and on social welfare.

Economies of scale: A decrease in the cost per unit produced as the total scale of the production facility increases.

Empowerment: A form of non-financial reward and a motivational technique... Continue reading "Essential Business Management and Growth Strategies" »

Foreign Investment Strategies

• Foreign Indirect Investment (Portfolio Investment): Specific assets and intermediate products transferred between two independent economic agents. In this instance, control over the resources is relinquished by the seller to the buyer, and only financial resources are transferred.
• Foreign Direct Investment (FDI): Investment made outside the home country of the investing company in which control over the resources transferred remains with the investor.

Corporate Integration Models

• Vertical Integration: When various stages of the production process are incorporated into one firm. This occurs because a corporation wants to ensure security of supply or reduce transaction costs. Example: BP may own oil wells in the Middle

Incoterms: Understanding Responsibility and Risk in International Trade

Exam Questions

GDP

GDP fails to measure changes in "the quantity of existing products that don't cause a change in price". Whenever there is inflation, the increase in nominal GDP will overstate growth in the economy

True

Unemployment

Assume the US unemployment rate is 4.9%. If 10,000 working age immigrants enter the country all looking for work and 9.000 find a job, what happens to the US unemployment rate?

Increases

Assume the US unemployment rate is 4.9%. If 10,000 working age immigrants enter the country all looking for work and 9.000 find a job, what happens to the US labor force participation rate?

Increases

A recent college graduate who is still looking for their first job would be considered as

Unemployed

The eligible population is: 200,000. Employed:

What is an ethical dilemma in a company?

One knows when they have a significant ethical conflict when there is a presence of:

• Significant value conflicts among differing interests
• Real alternatives that are equally justifiable
• Significant consequences on stakeholders in the situation

An ethical dilemma exists when one is faced with having to make a choice among these feasible, comparable, and relevant alternatives.

Social Marketing Concept:

Economic Liberalism

Humans act rationally to maximize self-interest.

• When individuals act rationally, markets develop to produce, distribute, and consume goods.
• Markets enable individuals to carry out necessary transactions to improve their own welfare.
• If there are many buyers and sellers, competition ensures prices as low as possible.
• Low prices mean increased consumer welfare.
• Markets must be virtually free of government interference.

Pro-market interventionism: When governments step in to create the conditions for markets to function.

Note: Laissez-faire economic policy was not favored by Adam Smith, contrary to common belief.

Later versions posit both economic and political advantages: economic wealth comes with the formation of an international... Continue reading "Core Principles of Economic Liberalism and Trade" »

This text tries to make known the changes that capitalism has had in the last thirty years, second the opinion of several authors. It makes a comparison between different texts of the 1960s, where  family capitalism is criticized, and the texts of the 1990s, where there are already large planned organizations, hierarchies.

Objective Management in 1960

In relation to Objective Management in 1960, two major problems arise:

• Strong dissatisfaction on the part of the “Cadres”
• Management problems that are linked to the giant size of companies.

Cadres, it is the meaning of the value they have for a company. On the one hand, we have the role of “technical expert” and on the other the “relay management” the transmission of orders from above... Continue reading "Changes in Capitalism: 1960s vs 1990s" »