Monetary Policy and Central Bank Roles
Interest Rates and Monetary Policy
In analyzing interest rates on money demand, we should first discuss the role of interest rates with the flow of international capital, especially in short-term movements called “capital flight.” These are exclusively financial interests where resources go to foreign countries that offer attractive interest rates and affect the national economy through exchange rate variations.
In Chile today, interest rates are higher than in most developed countries. This attracts
Read MoreOptimize Purchasing: Process, Policies, and Supplier Relations
Stages in the Buying Process
Stages in the buying process: To know the market, analyze information concerning the production, distribution, and sale of a certain material to determine the purchasing policy. Sources of information include the internet, government agencies, journals, and databases. Then, assess needs by analyzing what to buy, when, and the order quantity. Companies centralize purchases through the purchasing department, which receives applications via an internal newsletter detailing
Read MoreMastering Marketing Mix: Product Strategies for Success
The Marketing Mix
The integrated marketing mix involves decisions on product attributes, pricing, distribution channels, and communication to reach and engage the market. The marketing mix consists of the 4Ps:
- Product: Key features to attract customers, including design, quality, branding, and packaging. Decisions on modifying existing products or introducing new ones are also included.
- Price: Analyzing product costs, consumer price sensitivity, and competitor pricing.
- Place (Distribution): Strategies
Economic Stability: Production, Consumption, and Fiscal Policy
Production and Consumption Imbalance
Lack of Equilibrium: When production doesn’t match consumption.
Causes:
- Overproduction: Excess goods lead to unsold inventory, price drops, and layoffs.
- Underproduction: Shortages cause higher prices (inflation).
Impact: Overproduction can cause recessions; underproduction leads to inflation. Balance is crucial for stability.
Investment Determinants
Interest Rates: Lower rates encourage investment; higher rates discourage it.
Business Confidence: Optimism boosts investment;
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Item 12: Banks, Money, and Monetary Policy
12.1 Money: Concept, Factors, Types, and Characteristics
Concept: Money is a generally accepted means of payment.
Functions: Money has four key features:
- Medium of Exchange: Universally accepted for payments.
- Unit of Account: Used to assign value to goods and services.
- Store of Value: Serves as a means to accumulate wealth.
- Standard of Deferred Payment: Used to settle debts at a future date.
Types:
- Legal Tender: Money issued by a central bank (e.g., banknotes and
Understanding Company Heritage and Accounting
1. The Economic Concept of Company Heritage
A. Elements and Economic Patrimony
Companies require resources, both human and material, to conduct their activities. These material resources, which constitute the company’s heritage, include:
- Buildings and Premises
- Machines
- Vehicles
- Goods
- Furniture and Fixtures
- Money
A company’s heritage is classified into three groups: property, rights, and obligations.
- Property: Tangible resources like buildings, machines, and money.
- Rights: What the company can claim from others