Financial Institutions Explained: Mutuals, Lending & Credit Services
Understanding Financial Institutions
This document outlines key aspects of financial institutions, focusing on mutual insurance entities and various credit institution activities.
Mutual Insurance Entities
Mutual insurance entities operate as a form of voluntary insurance, funded by fixed or variable premium contributions from mutualists or other protective persons or entities. Their key features include:
- Non-profit operation: Mutuals are fundamentally non-profit organizations.
- Inseparable status: The
Public Finance, Consumer Protection & Economic Systems
DIPRES (Budget Discussion): Institutional Mission
Its mission is to ensure the efficient allocation and use of public resources within the framework of fiscal policy through the implementation of systems and financial management tools, programming, and management control.
This involves formulating the Budget Law, making changes to the current budget through decrees, preparing monthly cash programs, and recording monthly expenses, both cash-based and institution-accrued.
Strategic Objectives
- To advise
Tax Systems & Welfare State Models Explained
Understanding Tax Systems and Welfare State Models
Key Tax Definitions
- Value Added Tax (VAT): A tax levied on the price of goods or services paid by the consumer.
- Income Tax: A tax levied on the income received by individuals or businesses, such as salaries.
- Company Tax: A tax levied on the profits of a company.
- Social Security Contribution: A tax paid by employees and employers to fund social benefits.
Tax System Breakdown: Who Pays and Who Benefits?
| Aspect | Value Added Tax | Income Tax | Company Tax | Social Security |
|---|
Microeconomics Principles: Market Dynamics and Resource Allocation
Circular Flow Model: U.S. and Global Economy
The circular flow model illustrates the economy, showing the circular flow of expenditures and incomes resulting from decision-makers’ choices and their interactions.
Households are individuals or people living together as decision-making units. Firms are institutions that organize the production of goods and services.
A market is where goods and services are exchanged. We have:
- Factor markets: Where factors of production (e.g., labor, capital, land) are
Key Economic Concepts: Profit Theories, Investment Drivers, and Keynesian Employment
Understanding Theories of Profit
Profit is the reward earned by an entrepreneur for organizing and managing the factors of production. Economists have proposed various theories to explain the origin and nature of profit. Each theory highlights a different aspect of entrepreneurship. The six major theories of profit are explained below:
1. Rent Theory of Profit – F.A. Walker
- This theory compares profit to rent.
- Just like landowners receive rent for using more fertile land, entrepreneurs earn profit
Key Economic Concepts Explained
Monopoly Market
A monopoly market is a market structure where a single firm or entity has complete control over the production, distribution, and sale of a particular product or service.
Key Characteristics
- Single Seller: There is only one seller or producer in the market.
- No Close Substitutes: The product or service has no close substitutes, making it difficult for consumers to switch to alternative products.
- Barriers to Entry: There are significant barriers to entry, making it difficult for new firms