International Trade Dynamics: Policies and Agreements
International Trade Fundamentals
International trade is the exchange of goods, services, and capital between countries. Several factors affect the production capabilities of different countries:
Key Factors in Production
- Weather conditions
- Mineral wealth
- Technology
- Available quantity of labor, capital, and land
Benefits of Free Trade
Some benefits associated with free trade include promoting competition, specialization, and technological advances. It can also increase productivity, enhance consumer welfare
Read MoreUnderstanding Wage Payment Structures and Regulations
Wage Receipt Requirements
Wage receipts must be delivered using the official model and conserved in detail for six years. A wage receipt should include: Wages + Accessories – Deductions = Net Pay.
Wage Structure Components
Base Salary
The base salary is the worker’s pay, set by unit of time, labor, or both, without regard to circumstances that warrant allowances.
Accessories
Accessories are amounts added to the base salary, fixed in response to circumstances relating to the worker, the work done, or the
Read MoreUnderstanding Government Financing, Debt, and Fiscal Policy
Government Financing: Taxes and Debt
Government financing is typically achieved through taxation and public debt. While taxes are a primary source of revenue, raising taxes can be unpopular. Another option is deficit spending financed by issuing government bonds. However, public debt also has limitations.
Public Deficit and Debt: A Closer Look
Deficit and surplus are flow variables, while public debt is a stock variable, representing the total amount owed by the state at a specific time. Public debt
Read MoreGlobalization, Trade, and Sustainability: Key Concepts
Globalization: A process of growing integration and interdependence of nations, characterized by the intensification of international links of all types – commercial, financial, cultural.
Globalization: Globalization at a lower price.
Trade and Economics
Direction of Trade Statistics (DOTS): Presents the value of merchandise exports and imports disaggregated according to a country’s primary trading partners.
Gravity Model: Predicts bilateral trade flows between two countries/regions based on their
Read MoreFirm Supply Decisions, Market Equilibrium, and Monopoly Power
Firm’s Short-Run Supply Curve
The firm’s decision to produce in the short run depends on whether the price covers average variable costs.
- Below point 2 (minimum Average Variable Cost, AVC), the price does not cover variable costs, so the firm shuts down and produces nothing. There are no profits, and losses equal fixed costs.
- From point 2 upwards, the firm’s short-run supply curve corresponds to its Marginal Cost (MC) curve above the minimum AVC.
- Between point 2 (min AVC) and point 1 (minimum Average
Small Business Essentials: Structure, Franchising, Location
Defining Business Types
Entrepreneurial Venture
The principal objectives of the owner are profitability and growth.
Small Business
A small business is independently owned and operated and is not dominant in its field.
Profit Motive
Expecting to make a profit is the reward for taking the risk of starting and running the business.
Contribution of Small Business
Small businesses contribute significantly by:
- Encouraging innovation and flexibility
- Maintaining close relationships with customers and the community
- Keeping