Notes, abstracts, papers, exams and problems of Economy

Setting the Initial Communication Strategy

Before choosing its communication tools, a company must determine its communication budget. This budget may be a flat fee or a percentage of total business, while also providing for the participation fees of different local partners. The company must choose between or combine several solutions, including:

Advertising Media

When opting for this means of communication, companies should pay particular attention to the following points:

• The choice between different media (TV, radio, press) depending on the nature of the product and the customs of the country.
• Compliance with regulatory constraints. There are three levels of constraints:
  • Banned advertising: This applies to products related to public health, such

Key Functions Assigned to Distribution

Distribution plays a crucial role in connecting producers and consumers. Its key features include:

• Reducing Contacts: It acts as an intermediary between the producer and the consumer.
• Supply Enhancement: The distributor often covers the functions of multiple producers.
• Matching Supply and Demand: Distributors purchase in large quantities and sell in smaller units to meet consumer demand.
• Creating Assortment: Facilitates the matching of products to purchase needs.
• Storage: Ensures product availability for consumers.
• Additional Services: Provides advertising, sets prices, and offers other services.

When are Distributors Favorable?

1. When a company cannot afford its own distribution network.
2. When geographical location

Unemployment: Situation and Types

Unemployment occurs when individuals are capable and willing to work but lose their jobs, either temporarily or permanently.

Types of Unemployment

• Total Unemployment: This happens when a worker ceases activity, either temporarily or permanently, in a developing sector and is deprived of their salary.
• Partial Unemployment: This occurs when working hours are temporarily reduced by at least one-third, with a proportional reduction in salary.

Coverage of Unemployment

The General Law of Social Security protects unemployed workers at two levels:

• Contributory Level: Unemployment benefits are provided to individuals who cease work or have their working hours reduced.
• Assistance Level: A subsidy is granted in situations

Labor Market Theories

Other Visions: Implicit Contracts: This theory suggests that companies guarantee stable worker salaries, regardless of the economic situation. During a recession, companies maintain higher wages than the market rate, preventing wage decreases and low production. This contrasts with market pressures that would push for lower wages and reduced output.

The Inside and Outside: This theory differentiates between employees within a company and those outside. It recognizes that internal workers possess company-specific training and knowledge, making them difficult to replace. External hiring involves rotation costs, including learning, training, and the expense of firing existing staff.

Efficiency Wages: This concept links worker... Continue reading "Labor Market Theories: Wages, Unemployment, and Economic Policies" »

Institutional Unit 5: Forms of Organizations

Six Models of Organizations

Organizations can be categorized based on whether momentous decisions are restricted to holders of the residual claim.

First Category: Decision-Making Concentrated in Ownership

In this category, owners do not delegate decisions to others, thus minimizing control costs. Property is not separated, and a single person or a small group bears the consequences of their decisions. This structure mitigates the agency problem or issues with common assets.

A) Sole Proprietorship

A single individual owns and operates the business.

Disadvantages:

• Limited investment horizon
• Lack of diversification

B) Partnerships

Several individuals, known as partners, share ownership and decision-making. This... Continue reading "Organizational Structures and Decision-Making in Businesses" »

Key Characteristics of Accounting Information

Accounting information must be presented publicly with priority, and be:

1. Significant: True, accurate, and clear.
2. Complete.
3. Economical: Benefits should outweigh the costs.
4. Timely: This relates to the principle of realization.

Financial Statements

• Balance Sheet: Presents the financial situation.
• Income Statement: Presents results, with expenditures detailed by function (abridged or detailed).
• Cash Flow Statement: Shows cash inflows and outflows.
• Statement of Changes in Equity: Details changes in equity.
• Notes to the Financial Statements: Provide additional explanations.

Users of Accounting Information

1. Internal Users: Managers, employees.
2. External Users: Tax authorities, banks, municipalities, customers, suppliers.

Inventory Management and Internal Control

Inventory means the sum of those items of tangible property which:

• Are available for sale in an ordinary commercial transaction.
• Are in the process of production for such sales.
• Are available for current consumption in the production of goods or services available for sale.

Internal Control

Successful companies are very careful to protect their inventories. The elements of good internal control of inventories include:

1. Physical inventory count at least once a year, no matter what system is used.
2. Maintenance of efficient purchasing, receiving, and shipping procedures.
3. Storage of inventory to protect against theft, damage, or decomposition.
4. Permitting access only to authorized personnel.
5. Personnel with inventory

Understanding the Balance of Payments

The Balance of Payments (BOP) is a systematic record of all economic transactions, both real and financial, between the residents of one country and the rest of the world during a specific period. The accounting is determined by specific criteria.

Accounting Criteria

The actual operations of the balance of payments are recorded in terms of income from payments and financial transactions, reflecting changes in liabilities and asset variations (VA). Balances are derived from these columns by calculating the differences between expenditure and revenue, and between changes in liabilities and asset variations. The annotation criterion used is a systematic record that departs from the double-entry method.

Effects

Financial Institutions and Payment Processing

Institutions confirming payments offer administrative payment solutions with expertise, formalizing transactions between DIXA and its suppliers. They act as external intermediaries, managing client payments, endorsing operational risks, and handling administrative tasks. These entities issue letters confirming vendor payments, often providing financing, and may not match payment dates with customer payments. They typically earn revenue through supplier information and future receipts, not directly from the client.

Funds and Investment Companies

Funds and investment companies are popular for buying and selling securities. There are two types of intermediaries in the securities market:

1. Specialized intermediaries:

From Autarky to Developmentalism: Spain's Economic Transformation (1939-1975)

The Autarkic Period in Spain (1939-1951)

After the Spanish Civil War, the Franco regime adopted an economic policy of autarky. This policy was highly dirigiste, interventionist, and characterized by isolation and self-sufficiency with regard to foreign markets. This resulted in widespread economic stagnation, shortages, famine, and the rationing of basic goods.

The adoption of autarkic policies was due to several factors:

• Significant material losses and the loss of human capital caused by the Civil War.
• Internal barriers, such as the Second World War.
• Condemnation of the Franco regime by the United Nations.

Both foreign trade and supplies hampered the opening of the Spanish... Continue reading "Spain's Economic Shift: Autarky to Development (1939-1975)" »