Macroeconomic Models: Classical Theory & Policy Interactions
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.
Read MoreMarketing Fundamentals: Concepts, Strategies, and the Mix
Understanding the Nature of Marketing
Marketing is a group of activities designed to expedite transactions by creating, distributing, pricing, and promoting goods, services, and ideas. It creates value by allowing individuals and organizations to obtain what they need and want. Importantly, marketing is not about manipulating consumers or merely selling and advertising.
The Exchange Relationship in Marketing
Exchange is the act of giving up one thing in return for something else. This includes the
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