If they are out of season and output is down, less help is needed so layoffs will occur. Next you want to make sure your company is well respected based on the moves you make. Government plays an important role in the economy. By manipulating the arsenal of tools within a fiscal policy, the government can either speed up or slow down the economy depending upon what issues needs to be addressed socially and economically. By completing this simulation I have learned how decisions relating to fiscal policy can affect the economy.
Ultimately, it can be argued that “incentives are the cornerstone of modern life” (Levitt, 12), and having a grasp of this concept is a key to solving social and economic riddles. The rise of modern capitalism in the 18th century sparked economic forces that vastly changed the way people thought and behaved in a given situation. For instance, what might lead one person to cheat or steal while another remained honest? In Freakonomics, Levitt suggests that just about anyone would cheat and quotes W.C. Fields that “a thing worth having is a thing worth cheating for”. Levitt proposes that the roots for cheating lie in the incentives for cheating.
A portfolio analysis help a company with making decisions on what products that they must considered to be the main focused and which one they should get rid of. The portfolio analysis raises the issue of cash flow availability for use in expansion and growth for products in the organization. The BCG Matrix and the portfolio analysis would benefit a company to see where they stand with their products and where they should put more focus on to bring that particular product up in the market. Even though there are products that are doing well for the organization they can also become problems. The economy is going through some tough times now and it could be hard to keep the stars the stars and the cash cow the cash cows (Portfolio Analysis,
CanGo has very low profitability ratios, low turnover ratios and a high debt equity ratio. All these demonstrates that it’s in Cango’s best interest to take control of their financial performance, and focus on generating cash for the company, make better use of available resources and ensure that they are able to generate profit. The company should not take more debt and need to focus on how to use their existing resources to generate more cash flow to be able to operate and meet their financial obligations. Under the current operating system debt is increasingly being
The question we all as taxpayers should be asking is whether or not we will see a good return on our investment. The Democratic proposal is a bit more negotiable since the taxpayers would at least own an equity interest in these companies. However, even that modified plan seems too expensive and way too intrusive. We should consider alternative plans that are not quite as intrusive to market mechanisms such as the Lindt plan. The Paulson plan also seems to signal a dangerous shift away from liberal market mechanisms into an age of neo-mercantilism.
The organization may use the information in the cash flow report to assess the effectiveness of operations. Cash flow from funding activities. The cash flow statement is one of the most important, but often overlooked, of a firm’s financial statements. In its entirety, it lets an individual whether he or she is an analyst, customer, credit provider, or auditor learn the sources and uses of a firm’s cash. Without proper cash management and regardless of how fast a firm’s sales or reported profits on the income statement are growing, a firm cannot survive without carefully ensuring that it takes in more cash than it sends out the door.
Therefore, understanding exactly how monetary policies will affect the economy is extremely important. Monetary policies generally will raise or lower interest rates, which will ultimately affect individuals and business demand for goods and services. Unfortunately, many individuals do not understand the entire concept surrounding the Federal Reserve real interest rate. For example, any magnitude of decreasing the real rates will lower the cost of borrowing; this will increase investment spending, and influence individuals to buy durable goods. These items may consist of automotive, recreational vehicle, homes, and higher educational opportunities.
Governments may choose to increase minimum wage on an arbitrary basis, making it difficult for companies to hire individuals at a consistent market rate. Government price controls distort the economic theory of supply and demand. Supply and demand is a significant underlying feature of free-market economies. This theory allows individuals and businesses to make decisions based on self-interest. Businesses often pay individuals a wage based on current market standards.
The profit outcome for each firm depends not only on its own decisions concerning price and quantity, but on the decisions of its competitors. The investigation of oligopolistic markets is central in economics. The Cournot and Bertrand models of oligopoly share several important features that distinguish them from the bulk of other models of imperfect competition. The aim of this paper is to compare those two models of oligopoly, and particularly explain the case when number of Cournot competitors increases and compare its outcome with Bertrand model. Firstly, the paper will be giving the explanation of the basic Bertrand model and Cournot model
In this paper, in order to explore why the EMH presents inadaptability, the limitations would be given a deeper discussion, and find out the reasons. 2 EFFICIENT MARKET HYPOTHESIS Fama (1970) indicates that an efficient market is a market where there are large numbers of rational, profit-maximizing participants actively competing with each other, trying to predict future market values of individual securities, and where important current information is almost freely available to all participants. Another important concept is about market efficiency which refers to the aspects of operation, information and allocation in capital market. And the EMH focuses more on the informational efficiency. 3 LIMITATIONS OF THE EMH From the definition of the EMH, it was proposed on the basis of five conditions including: “zero transaction cost”, “freely available information”, “perfect competition”, the rational