Executive Summary MM Proposition has for decades been used to explain the connection between firms’ market value and capital structure. The first proposition (Proposition I) states that the market value is independent company capital structure, whereas proposition II holds that a firm’s total cost of equity is the sum of...
Outsourcing is when a company gives out part or all of its operations to a third party, known as an Outsourcing vendor,while enabling the company to concentrate in its core business. The major aim of outsourcing is to improve efficiency within an organization,by surrendering the operations that are within the...
Abstract After the world war had come to an end, the business world experienced a crisis in trade transactions due to lack of the systematic framework to govern trade. As a result in the year 1944, 45 countries within Europe sat in the New Hampshire to structure the An economic...
Introduction Dubai is a very populous city in the United Arab Emirates (UAE) and is one of the seven Emirates in the United Arab Emirates. The city lies on the Persian Gulf located in the Arabian Peninsula. Historically, it is believed that the city has been in existence at least...
Minimum Wage law is legal body that protects employee’s rights from being exploited by employer. The laws protect workers by making sure that they are paid hourly, daily or monthly wages according to the required laws. The issue of globalization has put a critical view on the existing minimum wage...
Introduction Any large business house, consumer expenditures or government schemes may borrow public money in the form of selling shares.1 It is the function of large financial institutions, such as banks, to issue or generate credit transactions. A smooth inflow of credit between the borrower and the lender is what...
Introduction There are various market structures in the economy, which affect the prices and the nature of goods that are available. Scholars have come up with different market structures and according to the, each of these market structures are based on particular assumptions. According to Arrow (1959) a perfect market...
Introduction to US Economy- Historical Review According to estimation, the economy of US is considered to be the second largest one in the world. But now it seems that the power of the dollar is deteriorating. At the time of Laissez Faire it was considered that modest or low profile...
Any government has the power to regulate the economy of the country and not only does it regulate the economy, it has a vital role to ensure that the economic condition remains stable. It is the responsibility of the government to ensure that all the aspects of the economy maintain...
Reasons for increasing minimum wages and the aftermath in cities of New York and Los Angeles The Government regulates the operations of businesses to ensure fair competition within the market and protect the interest of the consumers. Also the government aims at ensuring that business owners respect and protect the...
Introduction Demand can be defined as a schedule that shows various quantities that consumers are willing and able to buy at a given time, other factors being constant. Below is a schedule of demand and a corresponding demand curve. The Law of Demand The law states that ‘if the price...
Introduction The United States of America and global house market has been encountering problems for a number of reasons. These problems have been negatively affecting business activities in the US and around the world weakening most of the financial systems. The failure of the major financers in America has affected...
Executive Summary Oil is a mineral that since time immemorial has a powerful influence on the political and economical strength of a country. Nations that produce large quantities of crude oil can boast their influence to the way the economy of the world is run because, after all, they are...
The warning signs that were troubling economists since the beginning of 2008 have been confirmed – the US economy is in recession (Schaefer). The signs of the recession that had been widely debated were increasing unemployment, and declining inflation-adjusted household earning, which eventually led to a decline in consumer demand....
Introduction Saudi Arabia’s socio-political development in recent decades cannot be discussed outside of this country’s economy becoming fully specialized to serve the needs of oil consumers in Western countries. Saudi Arabia’s export of oil accounts for 45% of the country’s GDP and for 90% of actual revenues, associated with the...
Introduction This report is an assessment of the U.S fiscal policy, economic indicators, current state of the economy, the changes that have occurred over time that are responsible for the current state of the economy. It also highlights the different recommended initiatives to ameliorate the current situation. This paper is...
The theory of comparative advantage is the most important concept in international trade and has been one of the major reasons behind the existence of WTO and its worldwide success. The theory in the context of international trade explains the benefits of trade between two countries without any barrier even...
Introduction Economic policies are built of structured principles and theories. In the process of drafting these policies, economists base their arguments on theories and models. Policy formulation has become more systematic and procedural. Aside from these established mechanisms, policies are developed to be flexible (Rodrik, 1996). The presence of time...
What have been the main demand and supply factors that have determined the general increase in global food prices over the last four years? To start with, the prices of major food commodities such as grains and vegetable oils have increased dramatically in recent four years, and to record highs...
This paper attempts to explain the characteristics that can be used to identify a developing country. It also discusses the aspects of development (social, political, and economic aspects) It finally explores the relationship between democracy and development and also the three aspects of development. A developing country according to most...
Factors Affecting Demand and Supply for Products Demand and supply of the products and services are the two factors that are responsible for determining the price. It generally depends upon the quantity of the products consumers want to buy or the quality of products they can buy and also on...
Industrial Regulation Industrial regulation is a set of governmental activities aimed at controlling and influencing market economies of industries, firms, and enterprises. Such activities may include “reforming company law, promoting unified markets, enacting mergers legislation, and a variety of other measures” (Sugden, 1993). Such kind of regulations, consisting in imposition...
The Organization of Petroleum Exporting Countries (OPEC) is an intergovernmental organization established at Baghdad, Iraq in September 1960 that coordinates the petroleum policies of eleven oil-producing member nations. Its founding members are Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Between 1960 and 1975 the organization expanded to include Qatar (1961),...
Abstract The world economy is in recession, the worst of its kind in the 21st century. Triggered by the United States subprime mortgage crisis that saw major defaults in mortgage repayments, the crisis quickly spread to Europe and other parts of the world. This has caused a rapid rise in...
The world paper industry is dominated by the US, Canada, Finland and Latin America. “The US is the world largest paper consumer, and is home of the three world’s largest paper companies” (Paper industry.com). Demand and supply are the forces determining extend of resources allocation in any industry. In market...
The purpose of this study is to have a look into the factors which affect monetary policy. The study also involves bringing to light the role of a central bank in stabilizing an economy and economic indicators like unemployment, poverty, interest rates, and inflation. Role of the Phillips Curve Phillips...
Abstract The world economy is probably going through its worst phase right now, the subprime mortgage crisis and many other factors have impacted the world economy. The period of recession is going on and there is very little growth. The scope of growth is minimal. This paper will throw light...
The meaning of a bubble in the economy Over the last few years, there has been tremendous growth in the Chinese economy. Financial analysts the world over have likened this growth to a bubble waiting to explode. The person who set off this “bubble debate” was the perceptive financial mind...
Normally a country’s Gross Domestic Product (GPD) is one of the ways used in measuring how to size the economy is. The simplest definition of the Gross Domestic Product of a country is that it is the market value of possibly all final products and services produced within a given...
Economists have differentiated among four different types of market competition: perfect and monopolistic competition, monopoly, and oligopoly (Collins 2012, p. 27). However, the dominant types among these are monopolistic competition and oligopoly, types that have some similarities, differences, advantages and disadvantages for potential clients. Monopolistic Competition Versus Oligopoly The structure...
Key Ideas in the Three Theories of Development: Structuralism, Neo-Marxism, and Neo-Liberalism The structuralist theory of development has fallen down the pecking order as a theory explaining economic development. However, it is still used in economic development debates, and it has a long-lasting impact. The structuralist theory proposes five key...
Introduction The concepts of price elasticity of demand of a commodity is of great essentiality in economics as it shows how much the demand of a commodity will change as a result of price deviations. In other words it shows how the demand of the commodity responds to a price...
Financial Calculations In the first place, it is essential to understand the mechanisms of GDP growth, as it defines the country’s wealth and recognition in the global arena. According to the case, it is vital to calculate the growth rate if real GDP was $13.1 trillion in 2013 and $13.3...
Introduction Natural resources are regarded as a principal factor that influences the development of an economy. When discussing natural resources, it is important to understand the term “land.” In economic terms, the land is seen as that part of the earth that encompasses forest wealth, minerals, climate, and water resources...
Introduction The data exercise entails collecting and analyzing data for Estonia. The data analysis is carried out for a three year period, that is between 2009 and 2010. Some of the data that will be collected and analyzed are GDP, components of GDP, inflation, unemployment rate, and alternative measures of...
Introduction Globalization can be defined as the mass movement of people, goods and services resulting in greater interaction of people. Globalisation has actually resulted in opening trade and less restriction on trade since it can be seen as though people are living in a borderless world. With globalization, you find...
Introduction Economic development is the visible, measurable and quantifiable aspects of progress and growth of any given state or nation. The visible aspects of economic development involve: Infrastructure like roads, housing/buildings, reacreational facilities, medical facilities, educational facilities, scientific innovations and technologies. On the other hand, the measurable and quantifiable aspects...
Economic Development: Definition and Understanding Economic development means different things to different people. It also signifies distinct and variable aspects to governments and economic scholars. However, they all boil down to almost the same conclusion. Economic development encompasses growth and incremental measures in many fields of the economy. Economic growth...
The great recession, whose deleterious effects were felt in the last decades, saw individuals and families lose their jobs and homes. The adverse effects have not completely been eradicated; recovery though slow is still in progress. Poverty levels in America increased, new individuals and families entered poverty. The aftermath of...
In recent years, researchers have concentrated on discussing the median household income as an indicator of success in relation to the development of the metropolitan areas’ economies. The other factor which is discussed as influencing the progress of the U.S. metropolitan areas is the factor of immigration because its rates...
Unemployment is a major issue that is affecting economic development of various countries. A country that is facing low levels of unemployment faces the problem of poverty. Before looking at causes and effects of low unemployment levels in Australia, it is very important to define what low unemployment means. Basically...
Since after the WWII oil became a principal energy source, there aroused a need to regulate its production and consumption. With this aim, five countries supplying oil founded the Organization of the Petroleum Exporting Countries (OPEC) in 1960 to be joined by other members in the following years. The primary...
Summary The article deals with the issue of low oil prices and explores its effect on world economies. According to the author, the majority of the models offered by economists regarding the decline in the oil supply are based on the oversimplified premise and do not predict the development of...
Introduction The latest global financial crisis is a severe fiscal and monetary crisis that has been experienced globally since the 1930s Great Depression. The significant decline in economic growth and practices of financial institutions in 2007 and 2008 was mainly blamed on the subprime mortgage crisis, where it enabled the...
The 21st century has been a century dominated with economic growth and the rise of super powers such as the United States, china and Britain. Such powers play dominant roles in shaping the trend and nature of the global economy. This significantly affects the other nations still struggling with development...
Countries pursue international trade to achieve their intended national objectives. Notably, international trade services without restrictions and barriers provide countries with numerous economic benefits regarding consumers, producers, the government, and the world economy (Jackson, 2010). In reality, however, trade restrictions and barriers exist because countries use them as political policies...
Introduction Oil prices determine the strength of the world economy and are an important determinant of the global economic performance. In the early years, the upward and the downward movements in the oil prices could be predicted more easily. But now due the increased speculation in the commodities market and...
The theory of demand refers to the economic principle associated with the connections between the demand of customers for products and services and prices established for them. The more there are services and goods available, the lower is the demand as well as the equilibrium price. Demand theory, therefore, underlines...
Introduction The United States is a country with one of the largest organic food markets in the world. Containing almost no pesticides and other harmful substances, organic food is believed to possess numerous advantages over conventional products. The report focuses on factors determining demand and supply for organic foods in...
Introduction China has been one of the countries that have experienced unprecedented growth over the past couple of years. It has been a great achievement for China to become a global economic power, which currently ranks second after the United States of America (Guo, 2012). There are a number of...
The soft drinks sector is considered one of the most competitive markets in the food industry. It has a relatively low barrier of entry, wide availability of technologies that enable local producers to compete with international brands, and low requirements for research. Due to relative parity in taste and quality,...
The Concept “The Business Cycle” The business cycle refers to the different periods through which an economy undergoes alternating phases of booms and contraction in the economy. Business cycle is characterised by various aspects. Throughout the business cycle, the economy undergoes through the periods of contraction and expansion. This comes...
Introduction The international trade is a form of trade that comprises a number of countries, which import or export their products. The trade usually involves sell or purchase of finished products or raw materials and employs the use of foreign currencies among the involved countries. Initially, the trade was not...
Introduction The prosperity of every country depends on its social, political, and economic development. It equally refers to both developed and developing states, with Kuwait representing the latter group. Located in the Middle East, this state has a small but relatively wealthy economy. The country is located in a desert,...
The economy of Australia can be considered as amongst one of the largest capitalist economies of the world with an average gross domestic product of 1.5 trillion dollars annually. Australian economy has been rapidly expanding over the last few decades (Nieuwenhuysen et al., 2013). The development in its infrastructure, import,...
Economic Overview The UAE is a major player in the world energy markets and it has third rank in world’s largest conventional oil reserves and fifth rank in largest natural gas reserves. It is the Middle East’s second largest economy after Saudi Arabia. The UAE economy is relying on its...
Executive Summary The Russian market is very attractive for investors because of the size and purchasing power of its consumers. The recent government policies that opened the Russian market to international society have a positive impact towards having a strong economy. However, the financial system of the country has remained...
Introduction Significant contribution of small business everywhere in the world compels us to understand the causes of its failure. Recent studies have endorsed the fact that there is increased interest in the output of the small firms. After knowing the affairs of the small business firms, policy makers would be...
Introduction Demand and supply are the fundamentals of economic analysis as the interaction of the two forms a market. The law of demand and supply works in opposite ways in the sense that, when the prices of commodities change, demand and supply also change in opposite direction holding other factors...
This present essay outlines China’s reformed economic system from a purely planned economy to a partial market economy, which includes certain Chinese characteristics. Also, the reasons for the change in the economic system are discussed. Finally in the end different challenges are mentioned that China is facing today to sustain...
Introduction Today China stands as one of the most important countries of the world because it is China that has not only participated in the world economy but also contributed in bringing social and political growth in the world economy and has contributed as a significant participant in the world...
Arguments in favour of a free market system of resource allocation Free market of system is also referred to as the capitalistic economy. In this kind of market economy, the resources are controlled by private sector (Zhang & Zhao 2011, p.106). This further implies that the government has little control...
Introduction Ever since the Second World War ended, a majority of the countries that were affected by the war have had to rely on other governments and international banking institutions for funds to be able to handle their economic problems. For this reason, the problem of international credit has intensified....
Introduction The term war refers to any violent conflict that is often large scale and occurs between two groups of people or alliances due to their different views about an issue or issues. Different wars have occurred with varying motives (Kelly, R. p 48). Several factors have motivated wars between...
“Economics is the social science that examines how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants.” (Robert Schenk). Global oil consumption has been increasing steadily over the years. Therefore there has been increasing demand for this vital but yet scarce commodity globally. Its...
Introduction The economy of the United Kingdom (UK) started to recover in the third quarter of 1992, and in the first quarter of 2008, the UK economy went through a period of sustained economic growth, averaging 3 percent a year (Dunnell). But since 2007, the GDP growth has been declining....
Explain what happens to the price and quantity of milk when the following events occur A scientific study shows that the consumption of milk is beneficial for healthy bones. If a scientific study shows that the consumption of milk is beneficial for healthy bones, the demand for the commodity will...
Introduction Demand and supply of goods may be affected with the consideration of price fluctuations. If the goods are competing for the market, the changes in the demand and/or supply of either commodity will depend on the management decisions made by producers, with respect to countering the competition edge introduced...
Introduction Economists have developed numerous parameters that they use in assessing economic performance of a country, a stock market, or a company. The gross domestic product (GDP) is an economic parameter that measures economic performance of a country whereas the Standard & Poor’s 500 (S&P 500) is an economic parameter...
Early July 1997, the world awoke to heightened fears of a worldwide economic meltdown, the IMF crisis. This was a financial contagion that threatened to wipe out the entire Asian economy and had its origin in Thailand. A decade later questions have been asked whether the recovery of the Asian...
Introduction Any economy is driven by the returns gained from the exchange of goods and services. Both goods and services are contributors to the revenue in an economy. Trade-in goods are slightly different from trade in services. Many scholars and analysts continue to support the idea that; trade in goods...
Introduction Considered as one of the most important factors that determine the living standards of each country, the level of economic growth plays an important role in ensuring independent, secured, and well-improved services in a country. In order to measure the level of economy in a country, it is vital...
Introduction This paper focuses on China with the view of detailing the major issue that may present a challenge to the country’s future economic development. In the coming ten years, the Chinese political, financial, and international relations will be among the various issues that the economy will need to address....
Background The BRIC nations include a set of four big states, namely Brazil, Russia, India, and China, which are emerging. These states are differentiated from a collection of new upcoming and promising markets through their fiscal and demographic potentials. Such potentials could be used to rank the BRIC states amongst...
Introduction The economy of Germany has emerged gradually from the impacts of the financial crisis experienced in the world from 2007-2008. Within the past decade, Germany has remained an influential player in the economic and political affairs of the European Union (EU). The government of Germany safeguards the rights of...
Country Information Background Japan is located on the Asian continent and has one of the most stable economies in this region. The annual average population growth rate in Japan stands at 1.9%, and this is projected to reach 130 million in 2018. The annual average GDP growth rate is 2.8,...
Introduction Theoretical frameworks are aimed at presenting courses of actions for countries faced with various economic situations. However, there may be a number of challenges and limits to practical applications of macroeconomic policy. This report will seek to investigate Argentina’s monetary policy during a recession period and derive lessons to...
Introduction Over the past few decades, the world has been trying to recover from the 2008 economic recession, which affected many economies around the globe. The recovery process has been slow to the extent that many countries around the globe are still struggling with high unemployment rates coupled with low...
Abstract Cartels are amongst the gravest market rivalry breaches. Literature and other market structure reports claim that the formation of cartels is an offense both internationally and domestically. The competition authorities have globally intensified their efforts to track down hard-core cartels. However, industries could probably create hardcore cartels compared to...
Introduction This paper focuses on explaining the underlying causes, effects and policy response to the 2007 financial crisis. There is an increasing volume of literature on the subject matter. This paper will attempt to overcome the lopsided and idiosyncratic explanation of the crisis, which attributes it almost entirely on the...
A financial crisis involves massive changes in the credit value and prices of commodities in the market. A financial crisis affects the majority of a nation’s firms, sovereigns, and liquidity of assets. Two major factors that drive financial crisis are macroeconomic imbalances and changes in the internal or external market....
“An increase in demand causes a price increase, but an increase in price causes a decrease in demand. Demand increases, therefore, largely cancel themselves out.” Based on classical theories of economic and the real-world situation, an increase in demand can be attributed to an increase in prices. It implies that...
Credit can generally be defined as the transaction amidst two parties in which, one party, such as the creditor or the lender supplies goods or money or other services or securities in return for a promised future payment by the other party, the borrower or the debtor. Payment of interest...
Introduction In 2008, the financial crisis hit the country. Many enterprises and financial institutions went bankrupt, while ordinary people lost their property due to the inability to payout loans. Nowadays, it is easier to analyze the reasons that have led to this major drop in the state’s economy. The housing...
Introduction In a globalized economy, immigration has become a contentious issue. In highly industrialized countries like the United States and United, Kingdom immigration is seen as a problem especially when viewed from an economic perspective. According to a basic understanding of economics, resources are limited, and therefore the greater the...
Presentation of the data in tables for each variable Table 1: Real GDP. Australia (Billion) China (Billion) Greece (Billion) 1999-2000 416.923 1198.47 124.418 2000-2001 380.428 1324.81 129.842 2001-2002 397.239 1453.83 146.05 2002-2003 468.469 1640.96 192.85 2003-2004 615.276 1931.64 227.95 2004-2005 696.034 2256.90 240.076 2005-2006 749.316 2712.95 262.053 2006-2007 856.816 3494.06...
Sweden is a Scandinavian country found in the northern parts of Europe and is widely known for its welfare state. The country is divided into 25 provinces with a total population of 9.3 million people. Sweden is Europe’s fourth largest country and covers an area of 449964 square kilometers. By...
Introduction The US economy is in a recession. The US economy is headed for a recession. The US economy is at a standstill. Such is the proclamation of doom that is being directed everywhere by media houses, politicians, economists and institutions involved in research. Events on the ground indicate that...
The ‘medium term framework’ of fiscal policy and its relation to government finances The main element when managing public expenditure is the allocation of resources in relation to the economic priorities. This is the main idea behind the establishment of the medium term framework in reference to fiscal policy that...
Assume that the policymakers in a closed economy want to increase output without changing interest rates. What kind of policy mix would you recommend and how would your policy mix affect the components of GDP? Explain your answer and the adjustment processes that take place with the help of an...
A closed economy is that which is not influenced by external factors of demand and supply. Some of the external factors are international interest rates and international inflation rates. This economy’s GDP is dependent on consumer income and expenditure, government income and expenditure and taxation. It is however not affected...
Introduction Monetary policy involves the management of the money supply in a country’s economy. This is carried by the central banks, government, and monetary authority. In the United States of America, the Federal Reserve is responsible for monitoring and managing the money supply. The money supply is carried to help...
Introduction Natural rate of unemployment can simply be defined as the equilibrium rate of unemployment. This rate normally comprises both structural and frictional unemployment. The government can only slash the natural rate of unemployment by cutting the horizontal distance between the supply curve of labour and the labour force curve....
Introduction The Australian economy is largely based on the mining industry and other raw materials, with Asia being a key market. As regards the issue of whether the country’s economic growth relies on Asia’s continuing demand for resources, this is an issue that warrants further exploration. In this paper, the...
Introduction: General View on Credit crunch Any large business house, consumer expenditures or governmental schemes may borrow public money in the form of selling shares. It is the function of large financial institutions, such as banks, to issue or generate credit transactions. A smooth inflow of credit between the borrower...
Introduction An open economy is an analysis of an economy where we consider the foreign sector, by considering the foreign sector we mean that the economic performance of a country depends also on other countries in terms of imports and exports. Open economy the model is Y=C + I +...
Introduction Energy supply refers to the total quantity of usable energy that mankind can utilize. The main sources of energy are Fossil Fuels, Water Power, Wind Power, Nuclear Power, Tidal Power, Biomass Power, Solar Power, and Geothermal Power. Fossil fuels Fossil Fuels come from decaying plants and animals for hundreds...
Introduction The international debt crisis refers to the inability of developing nations to repay sovereign debts borrowed from international market, development institutions and sovereign governments (Gall 17). Traditionally, the crisis has been associated with developing nations, most of which are in Africa, Pacific and Latin America. Those being the debtors,...
Introduction Global communication is a large telecommunications industry. The company has a large number of employees who the company prided in as their reason for success. The company has markets outside Europe and in the Asian continent. The company has faced tough competition from upcoming companies. The competition has been...
Definition Crude oil, also called petroleum is an inflammable substance that is found beneath the earth’s crust. Petroleum is a Greek word, which means rock oil. So it comes from rocks, in two forms – liquid and gas. The liquid form is called Crude Oil while the gaseous form, which...
Introduction According to the Union of International Associations (2007), the lack of minimum wage fixing escalates industrial conflict and impedes the development of stable collective bargaining relationships. Likewise, levels of wages not enough to maintain family life, long hours of work, women’s night work, industrial homework, sweatshop methods, and child...
Introduction Macroeconomics This is a branch of economics that deals with the aggregate factors in the economy, it entails factors such as unemployment, inflation, foreign exchange, and investment unlike microeconomics which deals with is mostly involved in setting prices for the scarce resources. Macroeconomics tries to explain the reasons for...
