Understanding Microeconomics, Macroeconomics, and Key Economic Indicators
Microeconomics and Macroeconomics
- Microeconomics: Studies and analyzes the behavior of individual economic agents.
- Macroeconomics: Studies and analyzes the performance of the economy as a whole. It analyzes indicators such as GDP (Gross Domestic Product), unemployment rate (EPA), and CPI (Consumer Price Index) to diagnose the economic situation. Macroeconomics establishes relationships between quantities such as production, income, expenditure, and investment. It analyzes the causes and consequences
Essential Procedures for Auditing Assets and Liabilities
General Audit Procedures
Assets
Active Assets: Availability, accounts receivable, inventories, fixed assets.
Liabilities and Shareholders’ Equity
Accounts payable, provision for social benefits, and equity.
Availability (Cash and Bank Balances)
- Require bank reconciliations.
- Review documentary evidence in the cash books.
- Request direct balance confirmations from banks.
- Analyze the source of outstanding check collections and major reconciliations.
- Check the arithmetical accuracy of cash records.
- Verify the correct
Key Economic and Business Terms Defined
Macroeconomics and Microeconomics
Macroeconomics is the study of national and global economies.
Microeconomics is the study of the decisions made by individuals and businesses.
Market Dynamics
- Market Economy: An economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices.
- Market Price: The price at which the quantity demanded is exactly equal to the quantity supplied.
Economic Systems and Policies
- Mixed Economy: An economy that
Understanding Production Functions and Cost Management
7.1 Production Department: The production function of the business includes the entire set of activities that can produce a good or a service. These produce a final product with the use of some raw materials, machinery, and installations. Functions of the Production Department in charge of the productive function of the company:
- Provisioning: Provides the necessary materials for production.
- Manufacturing: Manages the production process from which some production factors achieve a final product.
- Storage:
The Impact of the 1929 Stock Market Crash on the Economy
Crack29: It originated in the United States and spread worldwide.
Background
During the First World War, the U.S. was placed in a privileged position compared to the rest of the world, making it the major supplier of raw materials, foodstuffs, and industrial products. Industrial growth was outstanding, based on the theories of Taylor and Ford regarding work organization and production. In contrast, agriculture did not experience parallel growth; agricultural prices were well below those of industry,
Read MoreEconomic Growth, Development, and Global Economics Explained
Economic Growth vs. Economic Development
Economic growth is a quantitative phenomenon, representing the actual increase in the product or income of an economy. The economic growth rate is calculated by comparing production across two periods.
Economic development is a qualitative phenomenon, representing the structural transformation that improves productivity and living standards. It includes economic and social changes, and progress for the people.
There’s a link between productivity and income.
Read More