Welfare State: Objectives, Expansion, and Key Actions
Objectives of the Welfare State: Key Actions
Safety and equality are two basic dimensions that have historically served three priorities: providing economic security, reducing inequality, and fighting poverty.
The balance of resources allocated to these objectives has varied throughout the different stages of welfare system development across countries.
The three objectives can be summarized as follows:
Objective: Financial Security
Maintaining a standard of living for citizens, not as a charitable gesture,
Read MoreDeflation, Fiscal Policy & Aggregate Demand Impacts
Understanding Deflation and Saving
Deflation is a persistent fall in the average price level within an economy, representing a negative rate of inflation (where the price level, P, falls).
Saving is defined as income that is not spent; it is present consumption forgone. Saving acts as a withdrawal from the circular flow of income, often involving money stored in financial institutions.
Recession, Aggregate Demand, and Unemployment
During an economic recession, there is typically a reduction in Aggregate
Read MoreHaiti’s Poverty Trap: Causes, Consequences, and Solutions
Haiti’s Poverty Trap: A Self-Reinforcing Cycle
The poverty trap in Haiti is characterized by a self-reinforcing cycle where poverty fuels instability and weak governance, which in turn perpetuates poverty.
Characteristics of the Poverty Trap
- Socioeconomic Inequality: High levels of inequality create barriers to economic and social mobility, trapping marginalized groups in poverty.
- Weak State Capacity: The government’s inability to provide basic services, such as security, education, and healthcare,
Accounting for Investments: Equity, Control, and Fair Value
Accounting for Investments: An Overview
- Provision for recovery (used to adjust the cost of the investment at market value).
- Gain / Loss Unrealized holding gains, net (like the provision for recovery, reported as part of shareholders’ equity).
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The entry to record the sale of securities available for sale, has two parts:
- The cash account will be debited for the amount received, the investment account will be credited for the original investment value, and the difference will be debited Loss on Sale
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The entry to record the sale of securities available for sale, has two parts:
Understanding Investment Resources, Financial Intermediaries, and Money Supply
Investment Resources and Financial Intermediaries
Investment of Resources
Value for money: Resources available through asset operations, including assets and rights, are recovered on mutually agreed terms.
Loans
Banks grant funds to individuals or companies, with the commitment to return them within a specified time. Types of loans include:
- Personal Loans: Designed to finance the acquisition of consumer goods.
- Mortgage Loans: House purchases remain the guarantee of repayment; ownership transfers to the
Understanding Firms, Business Survival, and Demand Elasticity
Understanding Firms and Business Dynamics
The Firm: A Focal Point of Production
A firm is a central element in a country’s production system. It uses its resources to produce goods, sometimes borrowing resources and paying for their use (e.g., land, labor, capital). A firm is an organizational unit, while a plant is a technical unit. The primary goal of a firm is to maximize profit.
In business economics, a firm is viewed from two perspectives:
- Theoretical: A firm is a fundamental component of production,