Aggregate Demand and Supply, GDP, and Market Dynamics
Aggregate Demand and Supply
Aggregate Demand (AD): Definition & Components
AD: The total demand for goods and services in an economy at a given price level. It’s the sum of:
- Consumption (C): Household spending on goods and services. Advanced Note: This is influenced by factors like disposable income, consumer confidence, and interest rates.
- Investment (I): Business spending on capital goods (machinery, equipment, etc.) and changes in inventories. Advanced Note: Investment is sensitive to interest
Inventory, Markets, Products, and Marketing Essentials
Functions of Inventory
Companies keep inventories for several reasons, based on the functions they accomplish:
- Security against uncertainty: Buffers against fluctuations in sales and supply.
- Production and distribution differentiation: Useful in cases of highly seasonal demand.
- Economies of scale: Purchasing materials in large quantities allows for quantity discounts and lower transport and transaction costs.
- Protection against inflation: Hedges against price variability.
Market Types
Perfect Competition:
Airline Economics and Fleet Planning Essentials
Key Concepts in Airline Economics and Fleet Planning
1. The Inverse Relationship Between Price and Quantity Demanded: The Law of Demand states that there is an inverse relationship between price and quantity demanded.
2. Non-Price Determinants of Airline Economics:
- The preferences of passengers
- The number of passengers in a particular market
3. Determinants of Airline Passenger Elasticity:
- Competition
- Travel distance and related price
4. Passenger Price Sensitivity: Leisure/pleasure passengers are elastic
Read MoreEconomic Operators, Resource Allocation, and Economic Theory
Economic Operators
Economic operators are the decision-makers within an economic system, engaging in core activities to produce, consume, and accumulate. These include:
- Families: Make decisions about consumption and savings, determining what goods and services to buy to meet their needs.
- Companies: Economic units that produce goods and services, combining and organizing factors of production to create end products.
- Government: Governs the operation of the system, influencing the economy through taxation,
Job Intermediation: Methods, Agencies, and Recruitment
Job Intermediation: Methods of Job Search
Methods of job search include:
- Friends, relatives, and acquaintances
- Internet and newspaper ads
- Employment agencies
- Red EURES: Job Search in Europe
- Temporary employment agencies (ETT)
- Search firms or direct recruitment firms
- Job boards of professional associations, universities, and business associations
- Unions
Job placement is a set of measures intended to bring together the supply and demand of work, providing workers with jobs suited to their characteristics and
Read MoreKey Concepts in Accounting: Financial, Managerial, and Cost
Financial Accounting
The use of accounting information for reporting to parties outside the organization.
Managerial Accounting
Specialists in using the tools of managerial accounting to help the organization and its managers operate effectively.
Chief Financial Officer (CFO)
The executive responsible for all accounting and finance functions in an organization.
Generally Accepted Accounting Principles (GAAP)
Accountants must follow GAAP (Generally Accepted Accounting Principles).
Activity Accounting
The