Bank Loans, Credits, and Guarantees
Bank Debt and Asset Operations
Bank debt is the source of funds that banks and other financial institutions invest in their assets.
Factors Affecting Asset Operations
Banks’ core business is taking deposits and lending money to customers through various asset operations (loans, credits, discounts, etc.).
This financial intermediation involves the risk of borrowers defaulting. Therefore, institutions must assess the creditworthiness of customers—their capacity to repay the borrowed amount plus interest.
Read MoreMacroeconomic Fundamentals: Demand, Supply, and Economic Policies
Aggregate Demand (AD)
The total amount all sectors of the economy are willing to spend during a given period for a given average price level.
AD = Consumption + Investment + Government Spending + (Exports – Imports).
Aggregate Supply (AS)
The relationship between the average price level and the quantity of goods and services supplied in an economy.
Factors Affecting Aggregate Supply
Average Price Level: If prices and costs remain constant while profits decrease, production lowers.
Production Costs: Rising
Read MoreLatin American Debt Crisis of the 1980s: Economic Policies and the IMF
Summary
In 1979, creditor banks grew concerned as Latin American countries faced a debt crisis. Reckless lending had resulted in debt exceeding repayment ability. The situation worsened in the 1980s with rising interest rates. Banks pressured debtors, refusing new loans. Countries adopted economic policies to increase exports, decrease imports, and combat high inflation.
1979 also saw three external shocks impacting Latin America:
- Second Oil Shock: Tripling oil prices significantly increased import
International Trade: Factors, Principles, and Capital Accounts
Read MorePrinciples of International Trade
This document explores the factors that influence international trade.
Our country represents 0.2% of the global population. Countries engage in international trade because it offers mutual benefits, often due to several key factors:
- Variations in production conditions across different regions.
- Differences in individual tastes and consumption patterns.
- Leveraging existing economies of scale.
- Variations in Production Conditions: Production conditions, including climate,
State Intervention and Fiscal Policy Explained
State Intervention and Fiscal Policy
Keynesian Economics
Keynesians, followers of J.M. Keynes, reject the assumption of a self-regulating economy reaching full employment. They advocate for monetary and fiscal policies to stabilize economic fluctuations.
Monetarist Economics
Monetarists, influenced by Milton Friedman and the Chicago School, follow classical economic thought. They believe in the free market’s ability to achieve full employment through supply and demand adjustments. For example, decreased
Read MoreBusiness Management Fundamentals
Item 1: Company Analysis
Balancing Acts
Gutenberg’s Balancing Acts
- Top of Productivity: Ratio of output to input (technical efficiency).
- Principle of Economists: Relationship between production value and commodity value (economic efficiency).
- Top of Profitability: Relationship between company results and invested capital (economic efficiency of production resources, related to profit).
Well Balancing Acts
- Top of Satisfaction
- Top of Organizational Development
- Principle of Balance of Power
Systems and Subsystems
System
Artificial,
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