Law 19983 on
A) Business:Business is an economic activity of producing and selling goods or services to earn profit.B) Demand:
Demand is the quantity of a good or service that consumers are willing and able to buy at a given price and time.C) Inflation:Inflation is the continuous rise in the general price level of goods and services in an economy.D) National Income:National income is the total money value of all final goods and services produced in a country during a year.E) Law of Demand:Law of demand states
Read MoreOpportunity Cost and Production Possibility Frontier
Opportunity cost, or alternative cost, refers to the cost of investing available resources into one economic opportunity at the expense of other available alternatives. It represents the best unrealized value.
The Production Possibility Frontier (PPF)
The Production Possibility Frontier (PPF) is the set of combinations of productive factors or technologies that reach peak production. It reflects the maximum quantities of goods and services that a company can produce in a given period using specific
Read MoreKeynesian Multiplier and Fiscal Policy Effects
Keynesian Multiplier and Demand Changes
The idea of compensating changes in private demand with changes in public expenditure rests on the Keynesian Multiplier. An increase in public spending increases domestic production and, consequently, agents’ disposable income. In turn, these increased incomes finance consumer demand and investment, leading to a further increase in production, which generates more income, and so on.
Multiplier Conclusions
Conclusion 1: Haavelmo Theorem
An increase in government
Read MoreBusiness Structures and Global Trade Organizations
Types of Business Ownership
Sole Proprietorship: A business that is owned and operated by only one person. The owner makes all the decisions and keeps all the profits, but they are also personally responsible for all the business debts. If the business has problems, the owner must pay with their own money or property.
Examples:
- Bakery run by one person
- Freelance graphic designer
- Carpenter with a personal business
- Clothing seller at a market
Partnership
A business owned by two or more people. They share
Read MoreFundamentals of the Economic Enterprise and Firm Structure
Item 1: Introduction to the Firm
The Concept of the Economic Enterprise
The company is currently one of the fundamental pillars of the economic system. From an economic standpoint, the company is the “basic unit of production.” Families are economic agents whose primary function is consumption, but they also provide some of the factors of production.
Classification of Companies
Companies can be classified based on several criteria:
Classification by Size
Criteria: Number of employees / Annual Turnover
Read MoreFinancial System, Central Banks, and Monetary Policy Basics
The Financial System and Intermediaries
Financial intermediaries are banks (those whose indirect financial assets are generally accepted as payment) and non-bank institutions (those that issue non-financial assets, often referred to as narrow money).
The financial system consists of the set of institutions that mediate between applicants and suppliers of financial resources.
Components of the Financial System
- Financial Intermediaries (Banks): Bank of Spain, private banks, savings banks, credit unions,