The relationship between firms and households

The relationship between firms and households 1.0 Introduction Factors of production are land, labor capital and entrepreneurship. Households are the owners of factors of production and the firms are users of factors of production. Firms use households (factors of production) to pay factor incomes which is rent, wages, interest and profit. Firms will use factor of production to produce output in the way of goods and services, which will be purchased by the household. In this way household incur their expenditures. 1.1 Body Circular flow diagram is the visual model of economy which shows how money flows through the markets among household and firms. Circular flow model consists of four separate models which each sequentially adding sectors or markets and also thus providing the greater complexity and realism. The four flows are flow factors of production from households to firms, flow of incomes from firms to household, flow of output of goods and services from firms to households and lastly flow of expenditures from households to firms. 1.1.1 Circular Flow Diagram http://wpcontent.answcdn.com/wikipedia/commons/thumb/b/b8/Circular_flow_of_goods_income.png/350px-Circular_flow_of_goods_income.png Above circular flow diagram divides the economy into two sectors which is one concerned with the producing goods and services, and the other with consuming them. All the four flows which has been stated as been illustrated in the circular flow above. In the diagram the outer flows of incomes and expenditures are flows of money and the inner flows of factors of productions and outputs are the flows of goods and services. 1.1.2 Households Households have the main function because they are the workers and also consumers. So they provide labour to firms and compensated with wages from the firms. Other then that as consumers they also buy goods and services from firms which constitutes as consumer expenditure. 1.1.3 Firms Firms are the producers of goods and services. Labour and capital is the input of the production process. Labour comes from households where wages are paid and the capital investment can be funded either by retained profits or borrowing from the financial sector. 1.1.4 Relationship between Households and Firms In a daily life example we are consumers who are working for a firm to earn wages. Because we working for the company the company makes profit and increase their production in their goods and services. When we are the households we receive wages from firms and we use it to buy goods and services produce by firms. 2.0 Withdrawals and Injections Withdrawals take place when there are movements of funds out of the circular flow in income. The three important things in withdrawals are Savings (S), Taxation (T) and Imports (M). In Savings households wont be spent all the factors income received on the current or even immediate consumption. Households also prefer to keep some for future or deferred consumption. For example households make their saving in the form of deposits at financial institutions such as banks. Taxation is where households have to pay to the government as taxes from their income. For example when household receive their wages their will be a deduction column as their income tax. Imports is where households willing to buy goods and services from abroad rather than consuming domestically produced goods and services. An injection takes place when there are movements of funds into the circular flow of incomes. The three important things in injection are Investments (I), Government expenditure (G) and Exports (X). In Investments households saved income which was deferred consumption there are later invested back in the circular flow/economy. In government expenditures government use all the taxes received from households and then ità ¢Ã¢â€š ¬Ã¢â€ž ¢s creates in flow of funds back into the circular flow. For example government expenditure includes road building, construction and more. Government use the total taxes which had collected from household to build road, hospital, buildings and other. In exports firms may sell some of their goods and services to foreign countries. In the economy expenditure from the foreign countries by foreigners becomes an injection. 2.1 Withdrawals and Injections diagramUntitled.jpg 3.0 Total Withdrawals equal wit Total Injectionsmmmm.jpg In the terms of the expanded circular flow of the income model the state of equilibrium takes parts when the total withdrawals that occur in the economy. It can be proven as: Savings + Imports +Taxes = Investment + Government Spending + Exports OR S + M+T = I + G + X 4.0 Conclusion Disequilibrium is the stage where the economic activity is not equal, and it is where withdrawals become greater than injections or even withdrawals less than injections, where also known as the stage of equilibrium when Withdrawals equal with injections. (693 WORDS) 5.0 Bibliography 1. Mankiw, Gregory N. Principles of Economics. 4th edition,  ©2007 Thomson Southwestern, 2. Sloman, John (1999), Economics, 3rd edition, Pretice Economics. 3. Graeme Chambelin, Lind Yueh (2006), Macroeconomics, Thomson Learning. QUESTION 2 1.0 Introduction The fluctuations in the level of the economics activities of a country over time are often be the best illustrated by the Business Trade Cycles. Business trade cycle is also known as the periodic fluctuation in the rate of the economic activity as it been measured by levels of employment, prices and also production. 1.1 Body The four main concepts in business trade cycles are full employment, unemployment, recession and inflation. Full employment takes place at the level of economic activity when all available at factors of production are fully utilized. In the business trade cycles, there is upward swings and also downward swings. The periods of adversity are alternate with the periods of business prosperity. Every boom is followed by a vice versa and also a slump. This business trade cycle is simply means that the whole course of trade or even business activity which is passes through all the phases of prosperity and also adversity. 2.0 Phrases in Business Trade Cyclemk.jpg 2.1 Phases in Business Trade Cycle Economists actually divided the business cycles into two main phases which is depression and recovery then boom and slump. Boom and slump mark turning points in the cycles. 2.1.1 Depression In this phase, the whole economy will be in depression mode and the business is at the lowest stage. Other than that the general purchasing power of the community is very low. In the productive activity, both production of consumer goods and the production of capital goods are at the low level. There are some of the main characteristics in depression. Depression makes the amount of production and trade shrinks. It is also increases unemployment and the overall prices become decreases. All the profits and wages decreases and the income of the community fall at a very low level. Other than that aggregate expenditure together with the effective demand also goes down. For example if a firm receiving a new investment or replacement investment they will make it delay as long as they are possible to go for it. Other than that in stock markets the prices of all shares and securities will be fallen to a very low level. Even in practically all the construction activity no matter in buildings o r machinery comes to an end. 2.1.2 Recovery Recovery is also known as expansion. In this phase the depression period comes to an end. In recovery phase all the economic situations become favourable. As money become cheap it makes the other materials and also factors of production easy and cheap. Here the aggregate demand becomes low aggregate supply. Other than that the productive activity also has been increased and the entrepreneurs also have sufficient financial backing. This makes the further investment and production increased. For example when a construction company ends all their projects in depression phase, now the same company will start receiving orders and employing more employees to create more income and employment. Lastly the whole economy will be moving faster towards the boom phase. 2.1.3 Boom Boom is also known as peak phase and it is a turning point in trade cycle. This phase is the highest point in economic recovery. In this phase there is a large number of production and also trade. There is also a high level of employment and also the job opportunities in limited amount to permit a good deal of labour mobility. Aggregate Demand will be equal with Aggregate supply. Overall it makes the prices rise. Other then that it also makes a rising structure in interest rates so then a bullish tendency rules makes stock exchanges. For example when a construction company starts to make more profit and inverse more the will improve their business and may need more employees. So then it makes the company offer more employment and it also makes the company get high level of investment. 2.1.4 Recession Recession is the sharp slow down in the economic activity, but slight different from depression which is more severe and also pronged downturn. Aggregate demand is low then aggregate supply. As the depression created the conditions of recovery, it is similarly and the boom conditions generate their own checks. All the idle factors have been employed and also further demand must raise their prices, but the quality is also inferior. In this phase there should be less efficient workers which have been taken for higher wages. The interest rates will rises and also other materials. Finally the costs have started to upward swing. 3.0 Conclusion Macroeconomics is mainly associate to the balance between Aggregate Demand and Aggregate supply in the whole economy/country. If the aggregate Demand becomes higher than Aggregate Supply the excess demand will be cause inflation. If the aggregate Demand becomes lower than aggregate supply, then the insufficient demand will cause recession and unemployment. (796 WORDS)

Introduction to Marketing Essay

Pestle stands for political, economic, social technological, legal and environmental influences. Businesses use this as part of their marketing plan procedure. Political: what is happening politically with regards to tax policies employment laws, trade restrictions, tariffs Economic: what is happening within the economy i. e. economic growth/ decline, minimum wage, unemployment, credit availability, cost of living, etc. Sociological: what is occurring socially i. e. cultural norms and expectations, health consciousness, population growth rate, career attitudes. Technological: new technologies are continually being developed. There are also changes to barriers to entry in given markets Legal: changes to legislation. This may impact employment, access to materials, resources, imports/ exports, taxation etc. Environmental: what is happening with respect to ecological and environmental aspects. A PESTLE analysis is used in business to assess the industry which an organisation is in. The PESTLE analysis looks specifically at factors which are external to the organisation which will impact on the business. This is with a view to determining the current role and status of the organisation in relation to its competitors and can be used as a marketing tool. See more: how to start an essay SWOT Analysis. A tool that identifies the strengths, weaknesses, opportunities and threats of a business. SWOT is a straightforward model that assesses what a business can and cannot do as well as its potential opportunities and threats. The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results. The strengths and weaknesses are interior when it comes to a business and things that are included that could be a problem are things like buildings, the quality of their workers, the i. t systems etc. The external element focuses on the opportunities and dangers in the business. Research into the organisation is essential and required when carrying out a SWOT analaysis. By matching organisations strengths and weaknesses with the external forces. SWOT analysis brings all the proof from all the different analytical techniques used. This is a way of creating a summary which gives the basis of developing the marketing objectives and strategies or even plans. Strengths: These are the internal features of the business. A highly efficient IT system could be an example. Weaknesses: These are the internal aspects of a business. Which don’t cope well with competition? An example would be staff that are not qualified or trained properly. Opportunities: This focuses on developing the business by focusing on things such as events. An example would be new territories for a particular product or a brand new segment of a market. Threats: These are external to the organisation and its development . Which can affect the business and wreck the businesses’ performance. They can be originated by the governmental policy such as an increase in corporation tax and new law. Smart Objectives All businesses have their own objectives. They can be at different levels depending on how well the business is performance. Specific – When the business sets the objectives, they must be specific so that the workers are able to follow them businesses must ensure that the instructions are clear along the goal set. Measurable – So the businesses knows on how successful they have become and to look at any changes that would affect the profit they must do a comparison of their performance in the previous years Achievable – The business needs to think carefully if they are going to be able to achieve their goals. Realistic – The business can’t set goals unless they are realistic and that they would be able to achieve these objectives. Time – The amount of time it is going to take should be stated then this way everyone has an idea and these can get done soon as.

The Secrets of Interpretive Essay Samples Exposed

The Secrets of Interpretive Essay Samples Exposed An interpretive essay is an essay that gives an analysis of some other bit of writing. The essay needs to have a clear thesis and introduction. It is not the easiest task to master. Based on the subject, each essay will change depending on the depth of the thesis. Outlines can also function as a brainstorming tool that can provide you a notion of what things to write about. Essay outline acts as a spine for writing essays. Essay outline for college plays an important function. Interpretive Essay Samples - Is it a Scam? Choosing our service, you are going to realize that studying can be simple if you gain from the help of competent experts. Other forms of discussion questions consist of fact-based and evaluative questions. Doing this will enable you to organize your thoughts, so all you need to do is fill in the info. When choosing for a topic, make sure there is a terrific quantity of things which you can speak about with the topic. Evidently, writing an essay on the subject of marijuana is too general. In this manner, Austen demonstrates that attitudes to marriage can be quite different. It will vary depending on the subject of discussion and the thesis statement that's created. Just imagine you will have professional writers dealing with all your assignments! Before you commence writing, you ought to do some prewriting to develop a working thesis. To begin writing your assignment you would want to encounter an interesting and promising topic. Be sure the knowledgeable writers of EssayForever service understand how to compose all types of essays. Get the Scoop on Interpretive Essay Samples Before You're Too Late Choose a couple of literary facets or elements of the job you've been requested to interpret. All the understanding of using tropes and stylistic methods is revealed inside this composition. Just type in the sort of sample you wish to find and see what pops up. Such samples could be easier when employing an academic paper database that makes it possible for students to upload papers they aren't using. You have to make an action! With the usage of sub-points, it's a lot easier to come up with what to write. Sometimes employing a hook statement can be effective, but it's not required. There's no particular style for the introduction, but background information is easily the most frequent procedure of approach. What Does Interpretive Essay Samples Mean? Argumentative essays are also called position papers due to their justification of the side of the issue they are written in support of. This differs from rhetorical in the feeling a rhetorical analysis is chiefly based around logic and provable facts. You've got to maybe come to a judgment on such individual. Give many kinds of explanations for why you believe that your interpretation is true. It proposes an interpretation of the 2 authors dependent on the observation made in the very first statement. Reiterate the thesis statement in various words. Whenever you opt to ask us for expert support, don't hesitate to speak to our support managers. In the quest of wisdom and information, we must incorporate distinctive strategies. Others might provide general writing advice on the best way to structure and organize your subject issue. You must be proficient in the topic, have an overall idea about the chosen issue and figure out how to get the best arguments to show your thesis. What You Should Do to Find Out About Interpretive Essay Samples Before You're Left Behind The daily lesson program is easily the most detailed standards-based plan a teacher will develop. It isn't important to us, whether you're too busy on the job concentrating on a passion undertaking, or simply tired of a seemingly infinite stream of assignments. Students lead busy lives and frequently forget about an approaching deadline. One of the most frequent kinds of analysis that college and higher school students perform. There are those that frequently know about writing sources which can be of use to others, but they might not mention it unless someone asks. A good deal of literary works are likely to pose more questions than answers. My suggestion is to locate something which's interesting to you. An effort to understand something better.

The Sarbanes Oxley Law - 1585 Words

Introduction: Trinity Industries made a very commendable effort in accommodating with what has now become one of the most important aspect of any public company, the SOX compliance, and as this case study illustrates, a good example of managing such big changes that can affect companies in the unforeseen future. After many renown cases mentioned, like Enron and Adelphia Communication, it was imperative that the government would take a much required action to curtail any such accounting scandals from happening again. Hence, the Sarbanes-Oxley law was enforced, that is analyzed as the SOX compliance in the case study. It could be identified that the Trinity Industries were able to meritoriously make a difference in implementing and maintaining their accounting practices and accountability of their financial system in such a way that they had no issues with SOX compliance since the passage of the act in 2002. 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