Foreign Direct Investment and Industrial Revolutions
Foreign Direct Investment (FDI) and Economic Theories
Foreign Direct Investment (FDI) is the purchase or establishment of income-generating assets in a foreign country that entails control of the operation or organization. FDI occurs in different types of economies:
- Developed economies (main investors of global FDI, e.g., Andorra)
- Economies in transition
- Developing economies (all others except Hong Kong)
International Business (IB) must be regulated to avoid tax havens, exploitation in developing and
Read MoreUnderstanding Macroeconomic Variables and Concepts
Exogenous and Endogenous Variables
Exogenous Variables: Variables taken in/given out by models.
Sticky vs. Flexible Prices
Sticky Prices: Resistance of prices to change despite changes in the broader economy.
Flexible Prices: Adjust in the long run to market shortages/surpluses.
Gross Domestic Product (GDP)
GDP: Measures the
Read MoreOPEC, IEA, and Global Energy Dynamics
OPEC vs. Non-OPEC Countries
OPEC countries generally attempt to control the oil market by restricting production, though their success varies. Non-OPEC countries are often viewed as free-riders. OPEC, a coalition of 12-14 countries, is primarily driven by business and politics. The common belief that Saudi Arabia solely adjusts production to stabilize the market has been proven inaccurate on multiple occasions, although cooperation within OPEC persists despite past conflicts and failures since its
Read MoreOligopoly and Market Dynamics: A Detailed Analysis
Oligopoly: Definition and Characteristics
An oligopoly is a market or industry dominated by a small number of sellers or producers. Because there are few participants, each oligopolistic firm is acutely aware of the actions of the others. The decisions of one firm significantly affect or influence the decisions of others. By exerting market power, they cause higher prices and reduced production. These companies maintain that power, partly by avoiding intense competition.
Types of Oligopoly Behavior
Non-
Read MoreMicroeconomics vs. Macroeconomics: Key Economic Concepts
Microeconomics vs. Macroeconomics
| Microeconomics | Macroeconomics |
| Studies Individual Income | Studies National Income |
| Analyzes Demand and Supply of Labor | Deals with Aggregate Decisions |
| Studies Individual Prices | Studies Overall Price Level |
| Analyzes Demand and Supply of Goods | Analyzes Aggregate Demand and Aggregate Supply |
Factors of Production
Factors of Production is the technical term economists use for resources. All things used in producing goods and services are called resources:
- Land: Everything on the earth
Labor Economics: Key Concepts and Applications
Key Concepts in Labor Economics
- The marginal product of labor tells us the additional [output produced by hiring one more worker].
- Diminishing marginal returns [occur because] hiring more employees means that each has less capital [to work with].
- Referring to [a] table… diminishing [returns set in with the] fourth [worker].
- [Referring to a table, the statement] which is INCORRECT [is that] the marginal revenue from selling [an additional unit of output is constant].
- [Referring to a table,] if wages