Key Economic Concepts: Unemployment and GDP Explained
Understanding Unemployment Types
Frictional Unemployment
This type of unemployment occurs when people are temporarily between jobs, searching for new ones, or entering the workforce for the first time.
- Example: A recent graduate looking for their first job.
- Example: Someone who voluntarily quit their job to find a better one.
Structural Unemployment
This results from a mismatch between the skills workers have and the skills demanded by employers, often due to technological changes, industry shifts, or
Read MoreIndian Entrepreneurship Support, Projects & Management
Institutional Support and Policies
Part A: Short Answer Questions
SIDO Administered Institutions and Centres
- Small Industries Service Institutes (SISI): Provide training, consultancy, and technical assistance to entrepreneurs.
- Product-cum-Process Development Centres (PPDC): Focus on R&D, innovation, and technical improvements.
- Regional Training Centres (RTC): Conduct quality awareness programs and provide testing facilities for small-scale industries.
Central Government Entrepreneurship Support Projects
- Startup
Financial Ratio Analysis: Understanding Key Performance Indicators
Financial Ratio Analysis
Financial ratios are used to evaluate a company’s performance across several key areas:
- Liquidity: Measures the company’s ability to meet its short-term obligations.
- Management (Activity): Measures the efficiency of asset utilization and turnover.
- Debt (Leverage): Relates resources and commitments, indicating the level of financial risk.
- Profitability: Measures the company’s ability to generate wealth.
Liquidity Ratios
(1) Overall Liquidity:
A ratio of 2.72 indicates that current
Read MoreUnderstanding Key Accounting Terms: Cash, Receivables, and Inventory
Understanding Key Accounting Terms
Cash and Cash Management
Availability: Those assets of the entity that stand out for their immediate liquidity, i.e., they are means of payment.
Cash (Box): Used to record the movement of funds done with paper money or currency in circulation or current checks. The use of this account depends on the level of the company:
- Small business: cash payments made and deposited in banks.
- Medium and large companies: the cash is deposited in the bank, and check payments are made.
Understanding Public Spending, GDP, and Price Indices
Public spending includes all expenditures of the public sector intended to pay the payroll of its employees plus the costs of goods and services purchased by the sector. This should not be confused with the private sector.
National accounts measure public expenditure in the Government’s budget. Net exports are also important. To obtain an accurate measurement of GDP, we must add that part of Spanish production acquired by foreigners (total exports) and subtract the purchase of Spanish goods produced
Read MoreUnderstanding Taxes, Money, and Economic Systems
Taxes: An Overview
Taxes: A tax is a payment demanded by public administrations without direct compensation to the taxpayer.
Types of Taxes
- Direct Tax: Levied directly on people and companies based on income or ownership of goods.
- Indirect Tax: Levied on the consumption or use of goods.
Specific Tax Examples
- IRPF (Personal Income Tax): Tax levied on individual income from work and capital.
- IS (Corporate Tax): Paid by companies on profits, proportional to the benefit obtained.
- IVA (VAT – Value Added Tax)