Understanding Money Supply, Central Banks, and Inflation
Money Supply
The money supply is the set of means of payment that circulate in the economy at a given moment.
- A) To increase the money supply, the Fed can:
- Mint and issue more bills
- Reduce the reserve ratios of banks
- Increase loans to banks
- Make purchases on the open market
- B) To reduce the amount of money, the Fed can:
- Withdraw notes and coins from circulation
- Reduce loans to banks
- Perform sales transactions in the open market
Monetary policy is the use of these instruments to increase or decrease the money
Read MoreProduct Classification, Development, Branding, and Pricing Strategies
Product Classification at United Nations
The International Standard Industrial Classification of All Economic Activities (ISIC) is the international reference classification of productive activities. Its main purpose is to provide a set of activity categories that can be used for the collection and reporting of statistics according to such activities.
The Central Product Classification (CPC) constitutes a complete product classification covering all goods and services. It serves as an international
Read MoreKey Concepts in Business Pricing and Distribution
Key Business Concepts
- Variable Costs: Those that vary with the volume of production.
- Fixed Costs: Those that remain constant.
- Total Cost: The sum of variable and fixed costs.
- Unit Cost: Variable costs plus fixed costs divided by expected sales units.
- Break-Even Point: Where income equals cost, with no profit or loss.
Pricing Strategies
- Method to Fix a Quote Price: An expected value model.
- Pricing Promotion: Conveys a message about the product, sometimes instead of advertising.
- FOB Origin Price: When the
Market Structures: Competition, Monopoly, and Oligopoly Explained
Market Structures: Competition, Monopoly, and Oligopoly
Perfect Competition
In a perfectly competitive market, a large number and dispersion of buyers and sellers prevent any of them from having a major influence on price.
- Many small merchants exist, so none will have any significant influence on the price of a certain good or service.
- The product is homogeneous throughout the market; therefore, it is indifferent for consumers to buy from one dealer or another.
- Buyers are well-informed about prices and
Corporate Investment Categories and Accounting Methods
Goal 1: Understand the Three Major Categories of Corporate Investment
- Three Categories of Investments in Securities
- Passive Investments
- Investments Made with the Intention to Exercise Significant Influence Over Another Corporation
- Significant influence may be indicated by:
- Joining the Board
- Participating in Policy Formulation and Decision Making
- Transactions Between the Two Companies
- Exchange of Personnel Management
- Technological Dependence
- In the absence of a clear distinction based on these factors, it
- Significant influence may be indicated by:
Accounting Framework: Annual Accounts, Principles & Elements
Conceptual Framework of Accounting: Annual Accounts
The annual accounts include: the balance sheet, the profit and loss account, statement of changes in equity, and a memory in SMEs. Annual accounts show a true and fair view of assets, financial position, and results of the company.
Requirements for Information in Annual Accounts
The information contained in the annual accounts must be true and relevant. Information is reliable when it is free of errors and must be integrated. The information must
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