Economics Key Concepts: GDP, Interest Rates, and More
Key Economic Concepts
- GDP Deflator: The broadest price index, covering all output.
- Real Interest Rate: The nominal interest rate minus the anticipated rate of inflation.
- Bracket Creep: The movement of taxpayers into higher tax brackets as nominal incomes grow.
- Income Changes: If your rent increases from $1,000 to $1,100 over a period of one year and your income rises from $6,000 to $7,000, your nominal income has increased, and your real income has increased.
- Money Illusion: Experiencing a rise in income
Insurance Risk Types: Technical, Investment, and Non-Technical
Insurance Risk Types
Technical Risks
- Risk of Diversion: Statistical deviations in risks, such as changes in mortality, morbidity, life expectancy, crime rates, wages, prices, and interest rates.
- Insufficient Risk Premium: The risk that premiums are too low, potentially overlapping with the risk of diversion when premiums are inadequate despite careful appraisal.
- Risk Valuation of Technical Reserves: Incorrect risk assessment leading to insufficient technical reserves to meet insurance contract obligations.
Understanding Theoretical vs. Capitalization Value & Tax Implications
Understanding Theoretical and Capitalization Value
Theoretical Value: This represents the value each partner would correspond to if society were closed out. The theoretical value is calculated as follows:
Theoretical Value = (Total Social Capital + Reserves) / Number of Shares
Theoretical Value = Total Social Capital / Number of Shares + Reserves / Number of Shares
Theoretical Value = Nominal Value + Reserves / Number of Shares
Increased reserves cause the theoretical value to rise above the nominal
Read MoreClearing, Settlement & CNMV in Spanish Markets
Clearing and Settlement
Clearing and settlement are fundamental processes in financial markets. After a trade is executed, the record is submitted to the clearing agency, which matches the buyer and seller records and confirms that the counterparts agree to the terms. The agency reports discrepancies to traders in case the reports do not match, who then try and resolve them. After the clearing process is performed, through settlement, agencies fulfill the delivery requirements of the securities object
Understanding Business Cycles: Sales, Billing, and Payroll
Classification of Lists
- Finished Products: Goods originating from a manufacturing or processing intended for sale.
- Product in Progress: Goods that have not been fully completed to produce finished goods.
- Raw Material: Properties acquired with the goal of making finished goods.
- Factory Supplies: Inventories required to carry out the production process.
- Packing Material: Materials used for packaging the final product.
- Goods in Transit: Purchased goods for which the property is owned.
Billing Process
The
Read MoreACC 202 Test 1: Key Topics and Exam Breakdown
There are 40 questions on the test. The specific topics for each question are as follows:
Chapter 1: 9 Questions
- Customer Value Propositions: Customer value propositions tend to fall into three broad categories: customer intimacy, operational excellence, and product leadership.
- CMA Ethical Requirements: Competence, Confidentiality, Integrity, Credibility.
- Difference Between Financial and Managerial Accounting: Financial accounting serves the needs of those outside the organization, whereas managerial