Understanding Interest Rates, Inflation, and Cash Flow
Theme I: Interest Rates and Inflation
Interest: The price to pay for foreign capital available for a certain period.
Interest rate: The percentage of invested capital that is paid for using it in a given unit of time (usually one year).
Types of Interest Rates
- Lending Rate: The percentage that banking institutions, according to market conditions and provisions of the central bank, charge for different types of credit services to users. These are active because they are resources for the bank.
- Deposit
Marxist Economic Theory: Capital, Labor, and Value
Capital Accumulation and Its Consequences
The capitalist invests surplus in the means of production and wages, thus becoming a new capital. Therefore, it increases the existing capital: capital accumulation occurs. This leads to capital concentration and centralization, causing capitalism to fall into a vicious circle. For Marx, competition in production is due to the lowest price. The lowest price results from high work performance, and he resolves to use more powerful machines and more sophisticated
Read MoreUnderstanding Market Economy: Functions, Value, and Competition
Basic Functions of the Market Economy
In a society like ours, the Public Sector is assigned the following functions:
- Fiscal: The state is the only entity that can impose taxes and decide where to spend what is collected. Establishing and collecting taxes is a fundamental function of the state.
- Regulatory: Legislative behavioral rules in the form of laws, prohibitions, etc., are regulated. Examples include minimum wage, labor legislation, and pollution control.
- Redistribution: Compensating for the unequal
Business Finance: Sources, Costs, and Investment Strategies
Sources of Company Financing
Financing refers to liquid resources or means of payment available to a company to meet its monetary needs. It can be classified according to three criteria:
- Classification Based on Repayment Timeframe:
- Sources of financing in the short term (less than 1 year)
- Sources of financing in the long term (over 1 year)
- Classification Based on Source Origin:
- Internal financing (reserves)
- External financing (equity, loans)
- Classification Based on Ownership of Funds:
- Company’s own funds
International Monetary System Shifts: 19th Century to Interwar Period
Key Changes in the International Monetary System: 19th Century to Interwar Period
After the First World War, almost all European currencies were below par values, as inflationary financing and balance of payments deficits had caused currency depreciation, despite controls on the balance of payments. While all countries considered it desirable to restore the gold standard, only the dollar was able to do so quickly (1919), serving as a reference for the implementation of other currencies, as the pound
Read MoreUnderstanding Market Economy, Business, and Entrepreneurship
Long Questions:
The Market Economy System: Characteristics, Advantages, and Disadvantages
Features:
- Exchange
- Freedom of Free-Trade
- Free Enterprise
- Free Market
- Equality under the Law
- Property Accumulation of Capital (Savings Reinvestment)
- State Intervention Beyond Police and Justice
Benefits:
- Growth (Maximum Continuous), Production
- Low Prices
- Minimum Costs (No Waste)
- Null-Benefit in the Long Term
- Better Motivation and Innovation
- Fewer Taxes, Less Corruption
- Better Cohesion and Democracy
Disadvantages:
- Environmental