Fundamentals of Economics and Microeconomics

Posted by on Jan 25, 2025 in Economy | 0 comments

Economy: The economy is the study of how nations use scarce resources to produce valuable commodities and distribute them to different groups.

Microeconomics: A behavioral analysis of specific components, such as industry, business, etc.

Pitfalls in Economic Reasoning

  1. Not Keeping Other Things Constant: The key step to isolating the effect of a variable is to keep the others constant.
  2. The “Post Hoc” Fallacy: The fact that event A is observed before event B does not prove that A caused B.
  3. Fallacy of Composition:
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Understanding Trade Barriers and Tariffs: Impact and Types

Posted by on Jan 25, 2025 in Economy | 0 comments

Trade Barriers

  • A government-imposed restriction on the free international exchange of goods or services.
  • Economic areas like the E.U. do not have them.

Tariffs

  • A tax.
  • It adds an extra cost to the cost of imported goods.
  • One of several trade policies that a country can enact.

Tariffs: Most Common Reasons

  • Protecting Domestic Employment
  • Protecting Consumers
  • Infant Industries
  • National Security
  • Retaliation

Protecting Domestic Employment

  • The levying of tariffs is often highly politicized.
  • The possibility of increased
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Business Operations: Procurement to Taxation

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Procurement

Procurement is the process of purchasing materials for a business and storing them until they are used or sold. It is divided into:

  • Shopping: This involves researching product features, identifying suppliers, providing products, and negotiating contracts with vendors.
  • Storage: This involves sorting, storing, and classifying the stock.
  • Inventory Management: This involves tracking the entry and exit of products.

Production

Production aims to capitalize on the company’s capital. It involves monetizing

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Financial Balance and Solvency Analysis for Businesses

Posted by on Jan 25, 2025 in Economy | 0 comments

Financial Analysis of Balance

Financial Balance

Financial balance refers to finding a suitable proportionality between the masses reflecting financial sources (net and liabilities), internally and in comparison to the investments made by the company.

You should consider:

  • A relevant proportionality between personal and external resources, which enables the satisfaction of interest and principal of the debts contracted as they produce their maturities.
  • Adequate resources other than proportionality between
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Key Economic Concepts: Demand, Production, and Monetary Policy

Posted by on Jan 25, 2025 in Economy | 0 comments

Demand and its Determinants

D = Pa, Y, Pb, GO = Pa, r, z, H

Real normal demand increases with increasing income.

  • Luxury goods: Demand increases with increasing income.
  • Necessities: Demand decreases with increasing income.

Substitute Goods: Demand increases with an increase in the price of a connected good.

Complementary Goods: The quantity demanded decreases with an increase in the price of a connected good.

Production Possibilities Frontier (PPF)

The PPF illustrates three concepts:

  • Resource Scarcity: The
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Business Financing: Internal and External Sources

Posted by on Jan 25, 2025 in Economy | 0 comments

Self-Financing

Self-financing consists of funds generated by the company and intended to expand or continue its activities. During a fiscal year, the company generates a certain amount of resources that may have two origins:

  • The result of the exercise: If the firm is profitable, it can assign a portion of the profits to investments in the company.
  • The repayments made: In each fiscal year, the company estimates the loss of value suffered by the plant and records it as an expense that is not an immediate
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