Understanding Economics: Markets, Labor, and Government
Income and Capital Markets
Income
Income represents the value or price of a factor of production in a given period. Income receives different names depending on the productive factor generating it: income from work is called salary, income from natural resources is called rent, and income from capital is called interest.
Capital Market and Interest
Capital market interest is the value of services or capital, more specifically, the price of money.
- Demand (Borrowing): This is formed by different economic
Market Factors of Production: A Comprehensive Guide
Market Factors of Production
7.1 Introduction
Income represents the value or price of production factors over a period. The circular flow of income involves relationships and flows between different economic actors. Labor income is called wages, rental income is derived from natural resources, and interest originates from capital. The factor market for production can be divided into three submarkets based on the nature of the factor: the natural resources market, the capital market, and the labor
Read MoreCFA Program Curriculum: A Comprehensive Overview
CFA Code of Ethics & Standards
I. Professionalism
A. Knowledge of the Law
B. Independence and Objectivity
C. Misrepresentation
D. Misconduct
E. Competence
II. Integrity of Capital Markets
A. Material Nonpublic Information
B. Market Manipulation
III. Duties to Clients
A. Loyalty, Prudence, and Care
B. Fair Dealing
C. Suitability
D. Performance Presentation
E. Preservation of Confidentiality
IV. Duties to Employers
A. Loyalty
B. Additional Compensation Arrangements
C. Responsibilities of Supervisors
V. Investment
Read MoreIntroduction to Economics: Principles and Concepts
Introduction to Economics
Definition
Economics is the science that studies the efficient management of scarce resources to satisfy the needs and wants of society by producing and distributing goods and services among its members.
Key Concepts
Opportunity Cost
Opportunity cost is the value of the next best alternative forgone when making a decision.
Needs, Goods, and Services
- Primary Needs: Essential for survival (e.g., food, shelter). They affect livelihood and child development.
- Secondary Needs: Non-essential
Inventory Management and Optimization
Inventory Management
Inventory Management is an activity that coexists in the three types of costs associated with inventory flows and processes. This structure arises while preserving the classical structure of costs by nature, as classified in the following two major groups:
Operational Costs
Costs associated with the investment classification of purely logistical costs, which has been mentioned so far, is the most frequently used in “the profession”. We have already mentioned in the paragraph above
Read MoreEconomics Principles: Markets, Externalities, and GDP
Supply, Demand, and Economic Policy
Price Controls
Buyers always want lower prices, while sellers want higher prices, creating conflicting interests. A maximum price is the highest legal price at which a property can be sold. When the government imposes a price ceiling, two outcomes are possible:
- The equilibrium price is below the maximum price, making the price ceiling irrelevant.
- The price ceiling is below the equilibrium price, restricting market forces. The market price cannot exceed the ceiling,