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

Goods and Services

Consumer goods are those directly employed by individuals to satisfy a need, therefore not requiring a subsequent operation process.

Intermediate goods are those used in the manufacture of other goods, not resulting in direct use for the satisfaction of needs.

Capital goods are those that, once made, will serve to produce other goods or services.

The corresponding service is in exchange for shares or serious efforts to repair, restore, or completely clean products that have imperfections or shortcomings for use in the satisfaction of needs.

Political Structure

• Sole Proprietorships (OPEs): Have a single owner. In this case, the individual is responsible for all contributions.
• Partnerships or Limited Partnerships: Two or more partners

Economic Policy

Economic policy involves state intervention in the economy to achieve economic objectives, such as economic growth, full employment, and price stability. Key organizations directly implement economic policy. Indirectly, various groups like banking institutions, large multinationals, and entrepreneurs' associations also play a role.

Types of Economic Policy

• Fiscal Policy: Intentional state action to increase or decrease economic activity through funds and taxes.
• Monetary Policy: Measures taken by the central bank to maintain price stability by varying the amount of money in circulation.
• Foreign Policy: State interference to regulate transactions with other countries, such as changing the currency exchange rate.
• Rental Policies: Aim

Foreign Currency and Market Functions

What is Foreign Currency?

A foreign currency is defined as a deposit or bank balance held in a financial institution, denominated in a currency different from the national currency.

Functions of the Foreign Exchange Market

The foreign exchange market performs several crucial functions:

• Allows for the transfer of funds between countries.
• Provides instruments for financing international trade.
• Enables the management of investment risks, arbitration, and speculation.

Understanding Exchange Rates

Exchange Rate Definition

The exchange rate of a currency is its price expressed in units of another currency.

Bid and Ask Prices

Exchange rates are typically quoted with two prices: a bid price for the buyer and an ask price for... Continue reading "Foreign Exchange Fundamentals and Financial Instruments" »

Balance Sheet Components and Structure

Assets Classification

• Non-current Assets (Intangibles)

  Definition: Industrial Property, APIs, Development Costs.

• Non-current Assets (Tangibles/Equipment)

  Definition: Buildings, Furniture, Machinery, Real Estate Investments.

• Current Assets (Inventory)

  Definition: Goods (Stocks).

• Current Assets (Receivables)

  Definition: Customers, Financial Investments, Trade Receivables, Debtors, Public Administration Debtors.

• Current Assets (Available Cash)

  Definition: Banks (Cash).

Equity and Liabilities

• Equity (Net Assets)

  Definition: Capital, Reserves, Income, Profits.

• Non-current Liabilities

  Definition: Suppliers of Non-current Assets, Bills Payable, Debts to Credit Institutions (Long-Term).

• Current Liabilities

  Definition: Suppliers,

Light Industry

Definition

Light industry refers to the sector that produces goods for direct consumption using raw materials or semi-finished products. It's also known as 'light' because its facilities are smaller (compared to heavy industry) and require less investment and labor for general production. These industries are generally less polluting than heavy industries and are often located near consumption centers with easy access to sales markets (e.g., food, textiles, furniture).

Trends

• Development of cutting-edge industrial technology: Industries are constantly evolving and adopting new technologies to improve efficiency and competitiveness.
• Industrial Concentration: Companies are associating or merging to become more competitive. This allows

Understanding Economic Activities

Economic activity refers to any process by which we obtain the products and services that meet our needs. Economic activities encompass three stages: production, distribution, and consumption.

Benefits, Assets, and Services

A benefit is the result of the difference between revenues and expenditures from economic activity. If expenses exceed revenue, losses will occur.

An asset is any object that fulfills a need and possesses value.

A service is a benefit intended to satisfy a personal or social need, but its production does not result in a tangible object.

Investment and Companies

Investment is the allocation of money intended to start a business or maintain and improve an existing one, with the goal of generating... Continue reading "Understanding Economic Activities: Production, Distribution, and Consumption" »

The Origins of the Capitalist System

Mercantilism

Mercantilism is an economic theory driven by the need to build national wealth, understood as the accumulation of wealth, gold, and silver. As countries generally do not possess large natural reserves of these precious materials, the only way to accumulate them was through trade. This meant developing a positive trade balance, or in other words, ensuring that exports exceeded imports, as international payments were made in gold and silver.

Physiocracy

Physiocracy is an economic theory that considers the primary sector to be the only genuinely productive sector of the economy, capable of generating a surplus upon which all else depends. It is the only sector capable of creating wealth.

Economic Liberalism

Economic... Continue reading "Understanding the Capitalist System: Origins and Principles" »

Taxes

Payments required by law with no specific benefit the taxpayer receives in return.

Public Budgets

An annual financial document that determines the amount of money to be spent and provides income for those expenses. When referring to other entities, it is called a public budget.

Public Debt

The total amount of money owed by the government at a specific point in time, resulting from past borrowing or fiscal policies.

Fiscal Policy

A set of measures carried out by governments concerning public spending and taxes, aimed at facilitating economic growth, employment, price stability, and managing deficits.

Transfer Costs

Expenses devoted to redistributing money to help the most disadvantaged groups.

Foreign Currency

Currency found in one country but which... Continue reading "Essential Financial and Economic Concepts Explained" »

The main purpose of the marketing plan is to be a concrete instrument for directing and coordinating the marketing effort of the company. The marketing plan is a document regulating commercial policy across the enterprise, goals, concrete actions, and timetable which take place.

Stages of Marketing Plan Development

• Analysis of the Situation. It is necessary to collect, analyze, and evaluate basic data for proper development of the plan. This analysis involves: Analysis of the actions undertaken by the company in prior periods; Study of the environment; Company image, products, sector, etc.; Staff qualifications (management, etc.); Distribution network (type of outlets, etc.); Competition (market share, etc.); Product (developed technology, costs,

Market Dynamics: Competition and Demand

Pure monopoly is a rare case. More frequently, several companies compete in markets. Suppose, for example, that four companies producing toothbrushes face the market demand curve shown in a graph. These companies produce a total of 20,000 toothbrushes daily, selling each for $1.50.

At this price, the market demand is inelastic, with an elasticity of -1.5.

Market vs. Firm Demand Curves

The graph (A) shows the market demand for toothbrushes. Graph (B) shows the demand for toothbrushes as seen by Company A. While the market demand elasticity at $1.50 is -1.5, Company A faces a much more elastic demand curve (Da) due to competition from other businesses. At a price of $1.50, Company A's demand elasticity is -... Continue reading "Market Dynamics: Firm Demand and Monopoly Power" »