Monetary System Shifts: Oil, Inflation, and Capital Flows
Key Shifts in the Monetary System
a) Abandonment of fixed parities.
b) Definitive disappearance of gold as a monetary reference.
c) Fixing the value of each currency in accordance with the provision of reserves and special drawing rights (SDR) under the value of other currencies.
d) Evaluation of the SDR in accordance with the trading of major currencies, not the dollar as before. And signed the death certificate of Bretton Woods.
Consequences of these Changes
A. Different countries may settle on the
Read MoreEconomic Fluctuations, Consumption, Savings, and Investment
Economic Reality: Fluctuations and Growth Factors
A country’s economic reality: The economy fluctuates from one year to another. These are periods of recession if they are mild, or depression if more severe. In the economic reality of a country, there are some factors that determine its progress or economic growth:
- External shocks to the market: These are situations that affect society, such as war or climatic changes.
- Internal market forces: These are the forces of demand and supply.
- Economic policies:
Monopoly Power, Public Spending, and Market Regulation
Bases of Monopoly Power
The bases of monopoly power are related to why monopolies are born. Knowing the cause that motivated the birth of a monopoly, that same cause is the source, the force that maintains its existence. So, then, knowing the reason for their appearance can determine the basis of its power. The causes for the occurrence of a monopoly are:
A- By the particular conditions of production of a good that make it uneconomical to have more than one manufacturer of a product in the same
Read MoreInternational Trade: Impact on Economic Development
International trade plays a significant role in economic development by:
- Increasing efficiency: Trade can lead to more and better products, and more efficient investment spending.
- Creating new economic opportunities: Countries can access goods and services that may not be available domestically, and middle-income countries can access the markets of rich countries.
- Increasing competition: Trade can lead to more competitive pricing and cheaper products.
- Improving the global economy: Large-scale trade
Inventory Management and Environmental Responsibility in Business
Optimal Order Model: Wilson’s Model
Wilson’s model helps determine the optimal volume or quantity of an order to optimize the inventory management system.
This model is applicable provided that:
- The company provisions batches of product (purchased from suppliers or made by the production department) of constant amounts, to be determined.
- The demand for the product (total amount purchased from the supplier or manufactured in production) is constant and known throughout the entire management period.
- The
Financial Ratios and Analysis for Businesses
**Rotation of Total Assets**
RAT = VTAS / TOTAL ASSETS
= 3000/2000 = 1.5 times
Measures the ability to generate transactions (sales), given the total assets. A comparison between companies in the same sector may suggest an insufficient number of operations that should lead the company to increase its level of sales, dispose of some assets, or perform a combination of both.
**Reasons for Debt Management (Leverage)**
The extent to which a company uses debt financing, or its financial leverage, has three
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