The role and form of government intervention in international business are subjective because different countries operate their economies successfully with varying levels of government involvement in business affairs. For example, in America and many western countries, government involvement in business is kept at a minimum because of the belief in...
According to Optimal Currency Area Theory, a range of criteria exists intended to determine the conditions under which monetary union is desirable and highly likely to have a positive effect. The theory was established by Canadian economist Robert Mundell, who published his reflections in this regard in 1961. He proposed...
The development of the global economy since the seventeenth century has passed several stages. It includes the growth of international trade, the emergence of the capitalist system, and the split of the economy into socialism and capitalism. The relation of the global economy to political and social struggles is manifested...
I believe that the best tool for the UAE is economic diversification because of various reasons. Firstly, despite making significant steps towards a diversified economy, the UAE has used a largely conservative approach in the past two years. As a result, the nation has not seen the best diversification yet....
Gross Domestic Product (GDP) is a key government statistic, which measures the total economic activity of the United Arab Emirates (UAE) as a country. It refers to the sum of all products and services the country produces within a single financial year. An increase in GDP indicates significant improvements in...
Leontief’s paradox can be explained by the skills-based approach. In particular, in the early fifties, the United States exported labour-intensive goods because the productivity of American workers could be much higher than in other regions of the world, even in Europe. Therefore, American labour-intensive products were more competitive in terms...
The concept of an international firm has evolved considerably in the course of history. For instance, one can speak about the era of mercantilism that spanned from the sixteenth to the eighteenth century. In this case, much attention should be paid to the role played by chartered trading companies. In...
In a decentralized model of procurement, each division of the company (departments, ministries, etc.) conducts the purchases necessary to meet their needs independently. For this purpose, specialized purchasing departments or other units similar in function are created in its structure. The centralized model provides for the creation of a kind...
AUSFTA was signed in 2004 between the Howard government of Australia and the United States of America. It was a kind of bi-lateral free trade treaty for ensuring conducting of trade smoothly between these two countries. With the continuous efforts of Australia to soothe the setbacks from GATT and other...
The Transatlantic Trade and Investment Partnership (TTIP) refers to a trade agreement between the U.S. and the European Union. It aims at promoting trade and international economic growth, strengthening the relationship between the U.S. and the EU, and increase jobs. However, the negotiations on the TTIP have entered a complicated...
Absolute advantage and comparative advantage trade theories help countries make decisions concerning the production of goods, imports and exports, specialization, and resource allocation. Absolute advantage shows which country can produce a given good more effectively, ceteris paribus. In turn, comparative advantage indicates the country’s ability to produce a given good...
The devastating effects of COVID-19 have overburdened the less developed and developing economies, making it challenging to cover their debts. The G-20 established a debt relief framework to help these countries deal with the pandemic. The actors agreed that an eight-month debt suspension period would be offered to states with...
There are three possible ways to achieve higher productivity in comparison with free trade equilibrium in a small importing economy. The methods include imposing import tariffs, import quotas, and voluntary export restrictions (VERs). As for the ranking, it is preferable to use import tariffs, then import quotas, and then VERs....
The distribution of total fertility rate and gross national income in both countries with the highest TFR and lowest TFR appear to have a negative relationship. The scatter plot and trend line confirm that the total fertility rate and gross national income per capita have a significant negative relationship in...
Demographic trends of population mobility, high density, overexploitation of natural resources, household size, and aging people increase pandemics’ vulnerability. The movement of people within and between countries enhances the spread of pandemics. In the Spanish pandemic of 1918, the soldiers’ mobility during the first-World War contributed to the spread of...
An interest rate, usually expressed as a percentage, is an amount charged to the borrower on the principal by the lender for the usage of the lender’s assets. The rates are usually computed annually, bringing the term annual percentage rate (APR). The assets could be large assets like a building,...
Both the International Monetary Fund (IMF) and the World Bank perform important functions in the global economy. The IMF is charged with the responsibility of fostering global economic growth and stability. Also, the IMF provides financing and policy advice to members faced with economic difficulties. Also, the IMF collaborates with...
FedEx (Federal Express) in 1973 initiated overnight delivery via flights by a cargo aircraft. At first, Memphis served as a central collection point for sorting the packages. From this central location, the packages were later delivered to their different destinations. These delivery missions were done overnight such that by the...
City bonds are usually called municipal bonds (or munis) and they are issued when a city government needs to finance new projects for public purposes such as schools, highways, or hospitals. Explanation: Before answering the question of why a city would issue bonds, it is necessary to answer the question...
Corruption occurs as a result of poverty in the whole world. Corruption occurs at all ranks of the society from the businesses, the government, the judiciary, and the civil society. The poorest are the most affected by corruption may they be in rich or poor economies. All elements of the...
Macroeconomics is best described as the study of the world’s economy as it considers and analyzes large-scale financial relations, general process and patterns of economic behaviour. Macroeconomics also studies the mechanisms of activity and interdependence of countries, regions, and large non-state actors in the global economy. Explanation: The entire science...
As evident from the graph, the growth of the tourism industry was very rapid in the 1950s-1980s but slowed down towards the end of the 20th century. This can be explained by three factors. First, the rapid growth of demand was highly influenced by the fact that after the Second...
“Global city is a relatively new phenomenon that has been generated in the present period by the development of an all-encompassing world system that is termed as late capitalism, post-industrialism, or the informational age.” The characteristics of global cities include expansion of marketing system through internalization of commerce and technological...
Marshall had the fear that mathematical concepts were more likely to become the Ricardian vice. He warned that while mathematics is good, mathematical economics and mathematical theory were not likely to yield good economics. He argued that mathematical methods were only a good tool if it was to be used...
Table 1 shows that historical trend starting from the year 1950 to 2010. Based on the historical data, it can be concluded that a direct correlation exists between the international tourism arrivals (Y) and the international tourism receipts (X). A linear regression model can be used to forecast the trend...
There is no denying the importance of the fact that Australia’s merchandise trade is differentiated by regional parameters. It should be noted that among the leading trade partners are the majority of developed and developing countries of East Asia and the Asia Pacific, such as China, Japan, Korea and New...
Table 1 analyses the changes in the world tourism trade from 1986 till 2006 in the number of exports. To begin with, the most evident conclusion from this table is that developed countries of the West such as Germany and the United States were dominant tourist countries during the last...
Americans are obviously not happy about the ever-increasing price they have to pay for gasoline. Therefore, many are advocating that the solution lays in the government enforcing price controls for the price increase is due to the company’s greed. There are disadvantages and advantages of price control on gasoline. To...
The demand and supply in the tourism industry are affected by a wide variety of factors, including political, economic, social, technological, legal, and environmental. For instance, the post-9/11 legislation influenced the immigration policies in many countries, making it harder for the tourists to enter, whereas the development of aircraft technologies...
Currently, Rashid Enterprise is willing to receive payment in British pounds for the monthly exports it sends to the UK. While all of its receivables are denominated in pounds, it has no payables in pounds or in any other foreign currency. Yasmeen, the owner of the firm, wants to assess...
The currency is one of the most fundamentals of human invention. The currency is the basic quality of general acceptability, it acts as the medium of exchange, a measure of value. Standard of deferred payments and the store of value. The most vital characteristic feature distinguishing the currency from the...
Sometimes, economies enter crises as a result of the combination of various circumstances. Governments may try to address these situations by implementing laws, which become known as stabilization policies. The advantages of such an approach are apparent when the efforts to rescue the nation from its issues come to fruition....
Full employment refers to an economic condition where everyone can find work and get employed. There is no shortage of labor resources, and they are used efficiently in all sectors of the economy, which means that both skilled and unskilled workers can get work. It also implies that everyone who...
The labor market has seen numerous changes in most countries recently, including the UK and the US. The changes in employment rates are among the most prominent trends in the UK labor market currently. According to the UK Office for National Statistics, the levels of employment reached 76.0% in the...
Global interest rates will remain low in developed countries this year. There is a high chance that the global interest rates will remain low due to a savings superfluity. The logic behind this supposition is that developing nations such as China are saving more money than they require. Consequently, the...
Human resource (HR) is defined as the assignment of the most trained military personnel to the right place at the proper time, based on their experience, skills, knowledge, and qualities. Human resource management (HRM) is provided through the personnel management system in the U.S. Navy. Such an approach is essential...
A feature of the American social security mechanism for service members is its implementation through specially designed programs. Many members of the U.S. Navy believe that the system of their social and legal protection is imperfect. Dexter argues that after conducting a survey, several issues were revealed. For instance, these...
For military missions in the Navy, soldiers are trained in physical fitness basics and prepared to withstand stress throughout their service as officers, especially when in a difficult situation. One of the basic requirements for physical fitness is the development of the need for daily exercise. For instance, one of...
Devaluation takes place when a state lowers the value of its currency compared to other currencies. A country’s currency can be devalued due to the prevailing rate of inflation. When maintaining the fixed exchange rate of a state becomes difficult, the country has to buy its home currency back using...
If a large part of the population is uninsured, the impacts of this situation on the healthcare system can be significant because the higher number of uninsured patients creates conditions for increasing healthcare costs. It is important to state that the healthcare system is directly connected with the insurance system...
The exploration of the causes of business cycles grew interested after an increase in the severity of economic depression caused concern in the late 19th and early 20th Centuries. Sunspots have been blamed to be the causes of recessions in that they affect the quantity and quality of the goods...
A market can be described as efficient when the prices of securities being traded in the market reflect all available information at a given time. The information reflected in the market must be relevant to the security in question meaning that all information that comes to the market will be...
Keynes and Friedman are a bit similar to one another owing to their interests in monetary theory, interventions, and the general way that economies operate. On top of the latter, these two economists were responsible for introducing relatively new and bold ways of looking at macroeconomics hence their recognition both...
Derivatives are contract agreements enforceable at a specified future date and whose value wholly depends on the value of the underlying asset. This means that a derivative cannot have an independent value from one of the underlying assets. The underlying asset may be bonds, stocks, cash, intellectual property, or receivables....
Derivative markets are believed to have been the cause of the last world financial crises. This is so because derivative markets come up with an inflated value of market capitalization which is very high compared to the same value when calculated by other means. Derivatives have also been criticized for...
Many taxpayers consider the current federal income tax system highly complicated and would hope to deal with a much simpler system to facilitate effectiveness in the administration of taxes. However, the complexity in the current system is understandable and justifiable because one of the objectives of an ideal system of...
Different stakeholders utilize government financial reports, and the three main categories of users include investors and creditors, oversight and legislative officials, and the citizenry. Moreover, government financial reports are used for various reasons, such as in the process of making social, political, and economic decisions. Considering the variations with regard...
A recession is defined as a slowdown in economic activity. Recessions in the economy customarily come about because of a reduction of the GDP growth rate of the same nation. They are, in most cases, characterized by a decline in business investments, a fall in sales, and a decline in...
The rapid increase in U.S. imports in 2010 was too high to compare with the macroeconomic indicators. In fact, the surge in imports came in handy to help the world overcome the 2010 recession. This is because recession would cause people to spend more due to the high inflation rates,...
According to BBC news, the IMF required the Irish government to come up with “austerity measures” aiming at reducing the Ireland output by 11%, in which the country’s budget would be 3% down. The international monetary fund (IMF) also required that Ireland should reduce the benefits of the unemployed and...
According to NCB, the export sector is the main driving force of the economy as the export increased by 6.7% in 2010, in which the Irish exporters association based the growth of exports to the United States by 18%, Germany by 42% and to Canada by 27%. In addition, competitiveness...
Financing the deficit doesn’t have offsetting effects. Some economists believe that government financing of deficit spending offsets the deficit’s expansionary effect. They believe that government borrowing increases interest rates and crowds out private investment. Crowding out is the offsetting of a change in government expenditures by a change in private...
According to the law of demand, consumers tend to purchase more of a particular product if its price declines and buys less if the price increases. Using price elasticity of demand, it is possible to measure the consumers’ responsiveness toward price changes. The price elasticity of demand varies depending on...
The primary goal for taxation is ensuring that there is the transfer of resources from one group to another while considering existing economic goals. In addition, taxation shifts purchase power among economic classes in a region; it may shift purchasing power from the private sector to the public sector. In...
The tax mix obtained by Abijanville city does not show any form of tax equity. As compared to Comparator, it has a high taxation rate on personal income. It imposes a very low-income rate on corporate investors. However, the movie is favorable to corporate investments as the city fails to...
Insurance is the most worrying issue concerning insurance due to the significant number of uninsured or underinsured Americans. Without comprehensive insurance, individuals face major financial risks if they should become seriously ill or injured. Some services cannot be provided by hospitals unless someone has a comprehensive insurance cover. This has...
Tax issues that concern both ordinary citizens and the richest people in the country have always been a controversial topic. However, the belief of many that reducing payments to the state can improve the standard of living is wrong. Leopold argues that today, the American tax system is characterized by...
Interest rate is a very powerful economic variable in macroeconomic theories. According to Robert Johnson and Patricia Kuby, interest rates play very fundamental roles in determining preferences for liquidity and investment decision. There are different types of interest rates including variable rates, fixed rates, partially fixed rates, and introductory notes....
A stock exchange plays various crucial roles and functions that influence the economy in a significant manner. First, it facilitates the regulation of the buying and selling of shares, bonds and securities. A stock exchange defines policies that facilitate fair trading practices and ensures that the activities of its various...
The theories developed at different times. This means that they base on continued study of macroeconomics over time. Although none explains all the macroeconomics complications comprehensively, each of the theories addresses a portion of the delicate and complicated field. As an economist, the view of the macroeconomic environment is well...
The government-wide financial statements are the statements that focus on the whole government. In the preparation of these statements, there is no consolidation since there is always a need for intra- entity transactions that should be eliminated. In the preparation of the government-wide statements, the most commonly used basis is...
Governmental fund financial statements demand the accrual basis of accounting as well as the focus on financial resources at the time. In addition, governmental funds such as general funds and special revenue funds are financed with aids, taxes, and other sources. In this case, there is no possibility of matching...
The concept of arm’s length transaction states that the people who are involved in the transaction should bargain in order to benefit themselves as individuals but not members of the group. In addition, transactions not made at arm’s length involve an element of related party provisions or relationships such as...
Both East Asia and West countries have passed their unique path of economic and cultural development. The main difference between these two rivals and partners simultaneously is their characteristic views on the ways of achieving economic prosperity and well-being. While the Asian governments rely on active and direct participation in...
Tax exemption is the exemption from all or some of the taxes as stipulated in the laws of that country or state. The exemption reduces the tax obligation due from an individual or organization and the tax is foregone. The exemption process will vary in each particular country or state....
Between the 17th and the 18th centuries, mercantilism emerged as a dominant economic philosophy. This particular economic philosophy advocated for aggressive efforts towards increasing exports and severe restrictions towards reducing imports. Nations would, therefore, become rich by exporting more than they imported. By developing the absolute advantage theory, Adam Smith...
Economists use the gross domestic product (GDP) as an indicator of prosperity in the country. To put it simply, GDP is the state’s annual income; therefore, GDP per capita is the amount of money the national economy produces per person per year, which demonstrates the country’s standard of living. GDP...
Absolute advantage is manifested in a country’s ability to produce goods using fewer resources than other countries. Сomparative advantage refers to a country’s ability to manufacture some products at a lower cost than others. Explanation: Absolute advantage and comparative advantage are elements of trade theory, which explains the mechanisms of...
Currency exposure risk is the risk or the possibility of incurring financial losses in the future payments from economic transactions, as a result of deviations of exchange rates from the expected future rates of exchange. Multinational organizations are usually prone to such risks, given the fact that they cannot operate...
A national economy is an extremely important factor shaping the country’s profile, its power, the level of the population’s welfare, and the state’s role in the international arena: “A national economy is the organized process of developing markets for natural resources, industrial production, agricultural output, and technological innovations. All nation-states...
Macroeconomics is a branch of economics that focuses on the decision-making process, performance and structure of the economy as a whole. It utilises tools such as GDP and price indices to analyse the economy. Various schools of thought have participated in macroeconomic development. They explain various phenomenons chronologically. The origin...
Interest rates are the equilibrium price in a financial market through which borrowing and lending of money occur. A country’s central bank is responsible for implementing the state’s monetary policy. The monetary policy provides the central bank with the necessary tool to manipulate the interest rates. The integrity of a...
Assessing citizens’ views on the role of their state in the world arena is a tool that allows characterizing specific beliefs from the perspective of social, economic, and other factors. Concerning American identity, one can agree that the United States is at the top of the world rankings, and various...
Planned aggregate expenditure Economically, aggregate expenditure (AE) can be described as the total expenditure on goods and services that are produced in an economy over a given period. Aggregate expenditure is composed of other expenditures including consumption (C), investments (I), government spending on goods and services (G), and net exports...
Generally, the credit card issuer indicates the monthly payment due date on which the cardholder is supposed to make the payment. The payment should include both the principal and interest on the debt, and the payment should be made in full. In the event of non-payment or late payment, the...
All the three-taxation system recognize the need to have an effective taxation system, but their point of contention is on how to achieve this goal. The current system of taxation taxes individuals according to their level of income. It has a graduated taxation system that ensures that those earning higher...
As the world recovers from the world crisis that hit it at the end of the year 2007, China is facing another duty of combating the corruption levels in the country. This is mostly in the public sector as well as the private sector. It is estimated that over 10%...
Outsourcing- transfer of ownership of a process from a buyer to a third party/ supplier is taking the world by storm. It is believed that much of the momentum was in the mid 1990 and most companies relied on outsourcing specifically as a planning tool due to its lower cost,...
Unemployment is a situation where persons aged 16 years and above, who are ready, willing and able to undertake jobs and are actively searching for jobs are not working at any specified time. It is inversely proportional to the economic growth. However, it is undesirable as it increases loss of...
China and the U.S. are each other’s chief trade partners, so it is not surprising that the trade war between them has been very damaging to both. In prosecuting this war, the Trump administration hoped to address concerns about job loss, unfair and illegal practices such as intellectual property theft,...
The coronavirus pandemic is going to have a lasting negative effect on the U.S. economy. As the article “Economic Effects of Coronavirus Outbreak (COVID-19) on the World Economy” by Nuno Fernandes shows, the economists of leading American banks agree that Q2 2020 will see a sharp contraction in the economy....
During the past, in the U.K, the revenues from slavery and the slave trade filtered back into the Great Britain economy in indirect ways, the insurance companies, bankers, and financial institutions all participating as active traders for investment. The British manufacturing industry, according to historians, received the extra spur of...
Economic recession is a serious challenges faced by all of the world economy players. The major causes that leads to recession was falling prices in the property market, rising unemployment, increasing bankruptcy situations among the individuals as well as corporate organizations, down ward trend in the stock prices and decreasing...
In 2008–2009 most of the industries in the world have entered into a deep recession as a result of the financial crisis that had its origins in impulsive lending practices and distribution of mortgage debt in the United States. Sub-prime loans losses in 2007 exposed other risky loans and over-inflated...
Before the application of the theory and principles of International Economics to the case study of the UK, it is necessary to have a brief look at these theories. For the last hundred years, industries have appealed the governments for protection, and societies have debated the advantages and of free...
Industrial relations mostly cover such topics as corporate restructuring and economizing. In the mass media reporting of industrial relations, there are also topics and issues concerning changing relationships in the employment sector of both union and non-union settings. Another issue is that of work systems that are highly performing and...
In the 21st century, there is no doubt that the world is interconnected thanks to the new era of globalization. Many countries trade goods and services for their own benefit. Vast capital flows can transfer anywhere around the world. A connection exists between globalization, free trade, and trade liberalization. Global...
The incentives for future oil exploration As prices go up, life becomes very expensive, thus slowing down development. Being a natural resource, many countries will tend to explore this resource in their country. The development of alternative energy sources The rising oil price prompts governments across the world, from EU...
Effect of oil prices on demand for kilometers traveled The rising of oil prices prompts governments across the world, from EU countries to the United States, to increase or decrease interest rates so as to control their economies. Because of a continuous rise in the prices of petroleum products, the...
The time value of money assumes that the value of money today is greater than the value of money tomorrow. This theory is explained by the presence of inflation rates on market. In the case of salaries, the amount of salary paid is calculated based on the change of time...
There exist a number of yield curve theories: expectation theory, horizon premium theory, inflation premium theory, and market segmentation theory. Market segmentation theory assumes that investors limit their investments to certain segments of the market or segments of the yield curve. It assumes that it is costly for the investor...
Understanding the relationships among world currencies is very important to triumphant operations in a global economy. There is money to be made by managers who can efficiently manage currency exchange rates in the route of their business dealings. There is money to be lost by managers who fail to identify...
It is true that economic success is brought about by capitalism. Schumpeter explains that capitalism is not in motion rather it is fixed. This theory does not have the accumulation of capital rather the money is in a continuous circular flow. Capitalists have the least profit and they normally receive...
Economists disagree about how big the role of the government should be in a capitalist market economy. Some classical economists, such as Adam Smith, devised a set of concepts that remain strongly associated with capitalism. His theory of the “invisible hand” of the market, through which he states that the...
The United States department of agriculture’s economic research service defines an individual as poor if his or her income is not enough to purchase the basic necessities that are food, shelter, clothing, and other essential goods and services. There are several myths associated with people living in poverty in America....
Money is something which can get us some product or service. It is a medium of exchange that works as a liquid asset and works as a causative factor in any economy. During the early ages when ‘money’ as such was not in wider use, people used to interact in...
It won’t be an exaggeration if we say that ‘Economics’ is the key driver in carrying along with the resources, benefits, and people-to-people exchanges. It involves the study and analysis of various alternatives or options available before opting for one particular option, in such a way that the job is...