International Trade, Globalization, and Environmental Policy
Ricardian Model of International Trade
The Ricardian model explains international trade as a result of differences in labor productivity. It highlights:
- Market mechanisms that allow specialization in sectors with a comparative advantage.
- How international trade is organized for mutual benefits.
Let’s imagine that the world only produces cheese and wine, and is composed of two countries: the domestic and the foreign one. There are obvious gains from trade if the domestic country can only produce cheese
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Classical Economic Principles
In the classical system of economics, the major determinants of output and employment are supply-side factors such as:
- Labor
- Capital
- Technology
- Natural Resources
According to classical economists, these factors determine the aggregate supply, which in turn decides the level of output and employment in an economy. They believed in the concept of full employment, meaning all resources, including labor, are fully utilized. The labor market is assumed to always clear due to flexible
Read MoreNational Economic Measures: GNP, GDP, and Balance of Payments
Gross National Product: Definition and Scope
Gross National Product (GNP) is defined as “the value of all final goods and services produced by the country’s factors of production and sold in the market in any given period” (Krugman, 2015).
To measure a country’s total output, we sum the market value of all goods and services produced.
Avoiding Double Counting in GNP
When calculating GNP, it is crucial to avoid double counting. This means not accounting for intermediate goods.
For example, if a
Read MorePublic Finance and Economic Policy Mechanisms
Understanding State Budgets and Public Finance
What are General State Budgets?
General State Budgets are a set of documents containing the planned expenditures and revenues that the central public sector has projected for a year. Public spending refers to commitments to pay for public sector contracts that arise from its intervention in the economy. A detailed analysis of both allows us to ascertain the political priorities of a country’s government program.
Classifying Public Spending
Classification
Read MoreUnderstanding Key Banking Operations and Financial Instruments
Understanding Key Banking Concepts
Differences and Similarities Between Loans and Credit Facilities
Here’s a breakdown of the key distinctions and commonalities between bank loans and credit facilities:
Similarities
- Both are funds that the bank provides to customers.
- In both, interest and various expenses are charged.
- There is a contractual relationship that specifies the agreed-upon debt and interest terms.
- In both, a guarantee is typically required.
Differences
- In a loan, the bank delivers the full awarded
Core Business Concepts: Product, Pricing, Promotion, Supply & Demand
Packaging Fundamentals
Packaging is the physical container or wrapping for a product. Its key functions include:
- Protects and transports the product.
- Improves selling appeal.
- Displays product information.
- Ensures suitability for the product and easy dispensing.
- Promotes brand image.
Brand Concepts
Brand Name
The unique name of a product that distinguishes it from other brands, giving it an identity of its own.
Brand Loyalty
When customers consistently purchase a particular brand instead of a competitor’s brand.
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