Money Demand and How Banks Create Money
Money Demand
People demand money to meet expenses and are also interested in holding some of their wealth in the form of money because of its purchasing power, i.e., the amount of goods that can be bought with it.
The public is not interested in the *amount* of coins and notes held, but rather the *amount of goods* they can buy with them (purchasing power).
The reasons why money is demanded are:
- To purchase goods and services (individuals).
- To pay for raw materials and salaries (companies).
Several factors
Read MoreBusiness Ethics and Corporate Responsibility
Cardinal Duties
These are rules of right behaviour that help protect the company, its people, and its reputation.
- Obedience: Follow the law and company rules. If your boss tells you to break the law, you must follow the law first; they can be personally responsible. Laws always come first (if illegal, don’t do it).
- Loyalty: Always act in the company’s best interest, not your own. Avoid conflicts of interest, don’t use company secrets or resources for personal gain. Don’t take business opportunities
Economic Insights: Globalization and Oil Prices
Globalization: Benefits and Drawbacks
Introduction
The goal of this study is to analyze the benefits and drawbacks of globalization. This report examines two key dimensions: firstly, the benefits of globalization, and secondly, its drawbacks.
Benefits of Globalization
- Employment Opportunities: Companies establishing operations in new countries create job opportunities.
- Educational Access: With institutions globally, it’s easier to pursue education abroad, leading to cultural integration.
- Increased Exchange:
Essential Economics Definitions
Macro Variables
Macro Variables are the key measures for assessing the overall health of a country’s economy. They represent economic activity and the sums of economic variables.
- GDP
- Labour Market
- Inflation Rate
- Interest Rate
- Government Expenditure
- Exchange Rates
- Balance of Payments
Final Good
A final good is an item bought by its final user during a period of time.
Intermediate Good
An intermediate good is an item produced by one firm, bought by another firm, and used as a component of a final good or service.
Read MoreKeynesian Economics: Core Tenets, Policies, and Critiques
Keynesian Economics: An Introduction
Keynesianism emerged as a liberal reaction to the inability of neoclassical orthodoxy and laissez-faire capitalism to automatically solve the serious economic imbalances that were accumulating in industrial countries after World War I.
Historical Context: The Post-1929 Era
The economic instability following the 1929 crash spurred a search for solutions, leading to three primary reactions:
- Marxist: Aimed to attack capitalism from the outside.
- Neoclassical: Sought to
Economic Rationality: Households, Firms, and Public Sector Roles
Economic Rationality: Core Principles
This concept describes the behavior of households and firms, considering they use their scarce resources to maximize their own utility or benefits.
Households or Families
The domestic economy is composed of individuals, singly or grouped into families, whose primary function is to satisfy their needs through the consumption of goods and services. With their income (household income), families must decide how to distribute it: how much to spend and on what types
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