Economy and Public Finance: A Comprehensive Guide
Economy and Public Finance
Introduction
This document explores the fundamentals of economy and public finance, covering key concepts, historical perspectives, and practical applications.
Economy
Definition and Scope
Economy, derived from the Greek words “Oiko” (administrator of a home) and “Nomos”, encompasses the study of monetary, credit, and banking systems, as well as foreign investment. It is broadly divided into formal science (logic and mathematics) and factual science (natural, bio-physical,
Read MoreFiscal and Monetary Policy Under Fixed & Flexible Exchange Rates
Fiscal and Monetary Policy Under Fixed and Flexible Exchange Rates
Perfect Capital Mobility and Flexible Exchange Rates
Fiscal Policy
Under perfect capital mobility and flexible exchange rates, expansionary fiscal policy aimed at increasing aggregate demand through higher production can face challenges. If domestic interest rates rise above international rates, it attracts capital inflows, leading to currency appreciation. This appreciation can harm export competitiveness and reduce foreign demand,
Read MoreBusiness Financing: Own and External Resources
Business Financing
Own Resources
These are the most stable resources and the company does not have to repay them. They carry more risk in a bankruptcy because partners are the last to receive their share during liquidation.
Types of Own Resources:
- Capital: Formed by contributions from partners. Capital increases can occur through individual contributions or from high-risk companies.
- Reserves: Come from retained earnings and are part of internal self-financing. There are three types:
- Legal: Amount fixed
Code of Ethics and Project Management
CODE OF ETHICS
Set of Rules
Set of rules that guide engineers in decision-making. A code of ethics that is based on the basic lines of:
- Truth
- Honesty
- Loyalty
- Equity
- Openness
- Competition
- Responsibility
CUSTOMER OBLIGATIONS
Service Attitude
The engineer should always keep an attitude of service to their client, defending their interests as if they were their own. In the use of their business, combining the higher levels of technical capability, autonomy, independence and integrity, maximizing results of the work
Read MoreInternational Accounting Standards (IAS) Overview
The State of Flow
The state of flow is the basic financial statement showing the effect generated and used in operating, investing, and financing activities.
Purpose of the State of Flow:
- Provide appropriate information to management so that it can measure its accounting policies and make decisions.
- Provide information to administrators, allowing them to improve their operating and financing policies.
- Project where the cash on hand has been spent.
Accrual Principle
The accrual principle requires the determination
Read MoreInternal and External Recruitment: Advantages, Disadvantages & Process
Internal and External Recruitment
Internal Recruitment
Disadvantages:
- Potential Tension: Tensions may arise between eligible partners if the selection process is not handled properly. This can demotivate employees and reduce their confidence in management.
- Limited Candidate Pool: The recruitment procedure significantly reduces the number of candidates as it’s limited to the company’s existing workforce. This can lead to missed opportunities to access a wider talent pool.
External Recruitment
In this mode,
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