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* '''''[[w:Economics|Economics]]''' is the [[w:Social sciences|social science]] that analyzes the [[w:Production theory basics|production]], [[w:Distribution (economics)|distribution]], and [[w:Consumption (economics)|consumption]] of [[w:Good (economics and accounting)|goods]] and [[w:Service (economics)|services]].'' ( Wikipedia ) | |||
* '''''[[w:Business economics|Business economics]]''' is a field in [[w:applied economics|applied economics]] which uses [[w:economic theory|economic theory]] and quantitative methods to analyze [[w:Business|business enterprises]] and the factors contributing to the diversity of organizational structures and the relationships of firms with labour, [[w:Capital (economics)|capital]] and product markets.'' ( Wikipedia ) | |||
::* '''''[[w:fi:Taloustiede|fi:Taloustiede]]''' on [[w:fi:yhteiskuntatiede|yhteiskuntatiede]], joka tutkii lähinnä [[w:fi:Talous|taloudellisia]] päätöksiä tekevien toimijoiden kannustimia ja käyttäytymistä, sekä niiden perusoletuksista johdettuilla malleilla ja teorioilla erilaisia taloudellisia ilmiöitä. Tavallisia tutkimuksen kohteita ovat [[w:fi:Hyödyke|hyödykkeiden]] kulutus, tuotanto ja allokointi, [[w:fi:Markkinat (taloustiede)|markkinoiden]] toiminta sekä aina kokonaistalouteen liittyvät kysymykset kuten [[w:fi:talouskasvu|talouskasvu]] ja [[w:fi:inflaatio|inflaatio]].'' Suomeksi taloustiedettä sanotaan myös [[w:fi:Kansantaloustiede|kansantaloustieteeksi]] erotuksena [[w:fi:Liiketaloustiede|liiketaloustieteestä]]. ( Suomen kielinen Wikipedia ) | |||
* '''[[w:Outline of economics]]''' is a good introductory text to economics if you don't know what it comprises and what kind of issues it deals with. | |||
'''[[w:Outline of economics]]''' is a good introductory text to economics if you don't know what it comprises and what kind of issues it deals with. | |||
{{Economic systems sidebar}} | {{Economic systems sidebar}} | ||
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= Year 1= | = Year 1= | ||
= Business Economics = | = Business Economics = | ||
Teacher: Seppo Suominen | |||
Type of course: [[:Category:Mandatory courses in GloBBA|Mandatory course in GloBBA]] | |||
Course code: N/A | |||
Part of: [[:Category:Sustainable Global Environment]] (ECO1LF001) | |||
Course material: ? + Moodle | |||
== Week 43 - Markets, scarcity and decisions == | == Week 43 - Markets, scarcity and decisions == | ||
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* [[w:Category:Commerce]] ( [[w:Commerce]] ) | * [[w:Category:Commerce]] ( [[w:Commerce]] ) | ||
[[Category:Mandatory courses in GloBBA]] | |||
[[Category:Sustainable Global Environment]] | |||
= Year 2= | = Year 2= | ||
= Global Business Environment = | = Global Business Environment = | ||
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== Week 36 - Classical trade theories == | == Week 36 - Classical trade theories == | ||
* | * '''''[[w:Factors of production|Factors of production]]''' are the ''inputs'' to the production process. ''Finished goods'' are the ''output''. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a [[w:production function|production function]]. There are three ''basic'' (AKA classical) factors of production: '''[[w:land|land]], [[w:Labor (economics)|labor]], [[w:Capital (economics)|capital]]'''''( Wikipedia ) | ||
* '''Gross domestic product''' ('''[[w:GDP|GDP]]''') is the [[w:market value|market value]] of all officially recognized final goods and services produced within a country in a given period of time. GDP [[w:per capita|per capita]] is often considered an indicator of a country's [[w:standard of living|standard of living]] ( Wikipedia ) | * '''Gross domestic product''' ('''[[w:GDP|GDP]]''') is the [[w:market value|market value]] of all officially recognized final goods and services produced within a country in a given period of time. GDP [[w:per capita|per capita]] is often considered an indicator of a country's [[w:standard of living|standard of living]] ( Wikipedia ) | ||
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== Week 40 - Exchange rate determination == | == Week 40 - Exchange rate determination == | ||
* '''[[w:Trade balance|Trade balance]]''' == [[w:export|export]]s - [[w:import|import]]s | |||
:: >0 leads to spot rate [[w:revaluation|revaluation]] | |||
:: <0 leads to spot rate [[w:devaluation|devaluation]] | |||
*'''[[w:Balance of payments|Balance of payments]]''' ('''BoP''') accounts are an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country's exports and imports of [[w:Good (economics and accounting)|goods]], [[w:Service (economics)|services]], [[w:financial capital|financial capital]], and [[w:Transfer payments|financial transfers]]. ( Wikipedia ) | |||
::* '''[[w:Current account|Current account]]''' is one of the two primary components of the [[w:balance of payments|balance of payments]], the other being [[w:capital account|capital account]]. It is the sum of the [[w:balance of trade|balance of trade]] (i.e., net revenue on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and cash transfers. ( Wikipedia ) | |||
::* '''[[w:Capital account|Capital account]]''' (also known as '''financial account''') is one of two primary components of the [[w:balance of payments|balance of payments]], the other being the [[w:current account|current account]]. Whereas the ''current account'' reflects a nation's net income, the ''capital account'' reflects net change in ownership of national assets. ( Wikipedia ) | |||
* '''[[w:Spot market|Spot market]]''' or '''cash market''' is a [[w:public market|public]] [[w:financial market|financial market]], in which [[w:financial instruments|financial instruments]] or commodities are traded for [[w:spot date|immediate delivery]]. It contrasts with a [[w:futures market|futures market]] in which delivery is due at a later date. ( Wikipedia ) | |||
* '''[[w:Spread|Spread]]''' is the difference in price between related securities ( Wikipedia ) | |||
*'''[[w:Interest rate parity|Interest rate parity]]''' is a no-[[w:arbitrage|arbitrage]] condition representing an [[w:economic equilibrium|equilibrium]] state under which investors will be indifferent to [[w:interest rate|interest rate]]s available on [[w:demand deposit|bank deposits]] in two countries. ( Wikipedia ) | |||
* '''A [[w:futures market|futures market]]''', a '''futures exchange''' or '''futures market''' is a central financial exchange where people can trade standardized [[w:futures contract|futures contract]]s; that is, a contract to buy specific quantities of a [[w:commodity|commodity]] or [[w:financial instrument|financial instrument]] at a specified price with [[w:Delivery (commerce)|delivery|]] set at a specified time in the future. ( Wikipedia ) | |||
::** The '''[[w:forward exchange market|forward exchange market]]''' is a [[w:Financial market|market]] for [[w:contracts|contracts]] that ensure the future delivery of a foreign [[w:currency|currency]] at a specified [[w:exchange rate|exchange rate]]. The price of a '''[[w:forward contract|forward contract]]''' is known as the '''forward price'''. ( Wikipedia ) | |||
::** The '''forward price''' (or sometimes [[w:forward rate|forward rate]]) is the agreed upon price of an [[w:asset|asset]] in a [[w:forward contract|forward contract]]. ( Wikipedia ) | |||
* '''[[w:Arbitrage|Arbitrage]]''' is the practice of taking advantage of a price difference between two or more [[w:market|market]]s: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the [[w:market price|market price]]s. ( Wikipedia ) | |||
== Week 41 - Exchange rate risk, risk and risk management== | |||
'''[[w:Risk|Risk]]''' and '''[[w:risk management|risk management]]''' | |||
'''Risk''' is the potential of loss (an undesirable outcome, however not necessarily so) resulting from a given action, activity and/or inaction. ( Wikipedia ) | |||
'''Risk management''' is the identification, assessment, and prioritization of [[w:risk|risks|]] (defined in [[w:ISO 31000|ISO 31000]] as ''the effect of uncertainty on objectives'', whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events ( Wikipedia ) | |||
'''Managing [[w:foreign exchange risk|foreign exchange risk]]'' and [[w:exposure|exposure]] | |||
* using international [[w:financial market|financial market]] to deal with the special opportunities and risks of international trade and investments | |||
* foreign exchange exposure – a measure of the sensitivity of changes in [[w:domestic|domestic]] [[w:currency|currency]] values of [[w:assets|assets]], [[w:liabilities|liabilities]], or [[w:operating income|operating income]]s to unanticipated changes in [[w:exchange rate|exchange rate]]s | |||
* both domestic and foreign financial instruments and incomes can face foreign exchange exposure | |||
* exchange rate risk: variability of domestic-currency values of assets, liabilities, and incomes | |||
* exchange rate exposure: the amount at risk | |||
== | * international accounting principles: in '''[[w:financial statements|financial statements]]''' accounting exposure – real exposure is the underlying exposure | ||
* the effect of exchange rates on sales and operating profitability: operating exposure | |||
* management of exposure and risk: means of dealing with risk and exposure – '''[[w:hedging|hedging]]''' | |||
==== Risk management ==== | |||
* it is possible to use [[w:borrowing|borrowing]], [[w:investing|investing]], and the [[w:spot exchange market|spot exchange market]] to achieve the same result as would be obtained by using the forward market | |||
* importer that must pay its currency trade loan within 30 days: borrow in home currency (€, 30 days), buy the foreign exchange on the spot market ($), invest in foreign exchange (in New York, for 30 days), use foreign currency for paying the trade loan ($, after 30 days), and repay the domestic currency debt (€, after 30 days) | |||
* exporter that receives a foreign-currency payment after 60 days: borrow in the foreign currency that is to received ($, 60 days), sell the borrowed foreign currency spot ($ à €), invest or otherwise employ domestic currency at home (€, 60 days), receive the payment from abroad ($ after 60 days), and repay the foreign currency debt with export earnings ($ after 60 days) | |||
* [[w:hedging|hedging]] via [[w:currency of invoicing|currency of invoicing]] – by [[w:invoicing|invoicing]] in own currency: no transaction risk nor exposure but the economic exposure still remains (if exchange rates change, the customer abroad faces changed prices, and according to price elasticity, the quantity demanded will change) | |||
* hedging via [[w:mixed-currency invoicing|mixed-currency invoicing]] – [[w:composite currency|composite currency]] (SDR), currency baskets (e.g. ½ dollars, ½euros) or ”cocktails”, usually this results in risk and exposure reduction since they offer some diversification risk (if the value of dollar goes up, usually the value of euro goes down) | |||
* hedging via selection of supplying country: sourcing – use domestic inputs or inputs from EMU-area | |||
* Use '''[[w:forwards|forwards]]''' or '''[[w:currency option|currency option]]s'' | |||
== Week 42 - Presentation == | == Week 42 - Presentation == | ||
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= Finance = | = Finance = | ||
* [[Finance]] | * [[User:Jukeboksi/BBA_studies/Finance]] | ||
= Navboxen = | = Navboxen = | ||
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== Sidebar somewhat broken == | == Sidebar somewhat broken == | ||
{{Economics sidebar}} | {{Economics sidebar}} | ||
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<center>This article '''used to be''' at the address '''<nowiki>https://GloBBA12.si/wiki/Economics</nowiki>''' from 2012 to 2016 and '''<nowiki>https://wiki.study/regarding/Economics</nowiki>''' from 2016 to 2020</center> | |||
[[Category:realcontent]] | |||