Key Macroeconomic Concepts: Definitions and Explanations
Key Macroeconomic Concepts
Marginal Propensity to Consume
Marginal propensity to consume: is a metric that quantifies induced consumption, the concept that the increase in personal consumer spending (consumption) occurs with an increase in disposable income (income after taxes and transfers).
Planned Investment
Planned Investment: includes all types of fixed capital investments and planned inventory investments. This depends negatively on the interest rate and on existing production capacity; it depends
Sole Proprietorship Financial Records: 2008
Assumption 19
The sole proprietorship “CRAFTSMAN”, devoted to the purchase and sale of handicrafts, presents the following stocks balance as of November 30, 2008:
Checking Balance as of November 30, 2008
Acct. | Title | Balance | Acct. | Title | Balance |
210 211 216 218 300 327 406 407 430 4310 4311 4315 436 440 460 472 570 572 600 602 621 625 626 628 640 642 694 706 708 709 | Land and Natural Resources Constructions Furniture Transport Elements Goods Packaging Containers to be Returned to Suppliers Advances to Suppliers Customers Commercial Paper in Portfolio Trade |
Market Structures and Economic Concepts: Competition, Monopoly, and More
Item 6: Perfect Competition Market
It is difficult to find markets in reality that perfectly align with the ideal of perfect competition.
Features:
- Many buyers and sellers in the market.
- Atomization of the market and concentration of homogenous products.
- There is perfect and transparent information.
- No brands.
- Free entry and exit of firms.
Note: Possible barriers to entry include high initial costs. The tendency is for production and profits to be zero.
Monopoly
A market where there is only one buyer (monopsony)
Read MoreUnderstanding the Welfare State: Successes and Failures
Welfare State: Successes, Failures, and Debates
What is the Welfare State?
The welfare state describes a system in which the state takes responsibility for protecting the health and welfare of its citizens and for meeting their social needs. The state does this through its provision of services and benefits.
Types of Welfare Provision
Welfare issues provoke much heated debate among sociologists, politicians, and the media because they involve important questions about how our society tackles inequality
Read MoreWorking Capital Policies and Credit Sales Strategies
Alternative Investment Policies of Working Capital
- Conservative Policy: This policy alternative has high liquidity, and a large proportion of its capital is in current assets. This type of policy is risk-averse.
- Moderate Policy: This policy manages capital in a rational way. Its growth is higher than that of a conservative policy and has sustained growth over time.
- Aggressive Policy: Companies that implement these policies have low liquidity because they believe that it is unnecessary to have too much
Understanding Credit Opening Agreements: Benefits and Obligations
1. The Opening Credits
The opening of credit through this agreement allows the bank to commit to making available to the client a sum of money as a partial ceiling. The customer can access and be reimbursed by withdrawing funds, applying interest on the amounts actually used. It’s an evolved form of a loan, offering more flexibility. It’s a common banking operation today. Its economic purpose differs from a loan, where the funding amount is set beforehand. The opening of credit is designed to better
Read More