Month: August 2021

ECON #27 WHY DO ECONOMISTS CARE ABOUT UNEMPLOYMENT?

Economists care about unemployment for two reasons. First, they care about unemployment because of its direct effect on the welfare of the unemployed. Although unemployment benefits are more generous today than they were during the Great Depression, unemployment is still associated with financial and psychological suffering. The extent of suffering depends on the nature of unemployment.

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ECON #26 THREE KEY FACTS ABOUT ECONOMIC FLUCTUATIONS

Fact 1: Economic Fluctuations Are Irregular and Unpredictable

Fluctuations in the economy are often called the business cycle. As this term suggests, economic fluctuations correspond to changes in business conditions. When real GDP grows rapidly, business is good. During such periods of economic expansion, most firms find that customers are plentiful and that profits are growing. When real GDP falls during recessions, businesses have trouble. During such periods of economic contraction, most firms experience declining sales and dwindling profits.

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FS #6 CASH FLOW ANALYSIS

A cash flow statement is one of the most important financial statements for a project or business. The statement can be as simple as a one page analysis or may involve several schedules that feed information into a central statement. A cash flow statement is a listing of the flows of cash into and out of the business or project. Think of it as your checking account at the bank. Deposits are the cash inflow and withdrawals (checks) are the cash outflows. The balance in your checking account is your net cash flow at a specific point in time.

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ECON #25B HOW POLICIES and EVENTS AFFECT AN OPEN ECONOMY

TRADE POLICY

A trade policy is a government policy that directly influences the quantity of goods and services that a country imports or exports. Trade policy takes various forms, usually with the purpose of supporting a particular domestic industry. One common trade policy is a tariff, a tax on imported goods. Another is an import quota, a limit on the quantity of a good produced abroad that can be sold domestically.

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FS #5 WHY FINANCIAL ANALYSIS MATTERS

Financial analysis is an important tool that gives an overview of an organization’s financial wellbeing and helps inform strategic decisions. It helps financial advisors review company performance, sustainability, and growth by using foundational tools like income statements, balance sheets, and cash flow statements to do various calculations. In today’s data-driven world, financial advisors are expected to make compelling, fact-based suggestions supported by analytics.

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