This paper explains the U.S. financial system to CFO of Jagdambay Exports. I will explain the following questions. 1. Explain the components of a financial market and its relevance to Jagdambay Exports. Be explicit and explain to the CFO how financial markets differ from markets for physical assets and why that difference matters to Jagdambay Exports.
Deductive and inductive reasoning can be applied to analyze certain trends of economic theories. An example of deductive reasoning would be the demand and supply analysis as it involves a set of generally accepted principles about demand and supply. Deductive economics starts with a set of axioms about economies and how they work. It then relies on these principles to explain individual cases or events. To summarize, deduction in economics starts with a generally accepted principle and proceeds to the specific (http://classroom.synonym.com).
ECONOMICS ASSIGNMENT CLASSIFICATION OF MARKETS AND ITS PRACTICAL IMPORTANCE SUBMITTED BY, REVIN FRANCIS NO-b1488 MBA-A MARKET STRUCTURE Market structure is defined by economists as the characteristics of the market. It can be organizational characteristics or competitive characteristics or any other features that can best describe a goods and services market. The major characteristics that economist have focused on in describing the market structures are the nature of competition and the mode of pricing in that market. Market structures can also be described as the number of firms in the market that produce identical goods and services. The market structure has great influence on the behaviour of individuals firms in the market.
Monopolists are able to maximize their profits by selling a quantity of their good where marginal costs is equal to marginal revenue, but set a price where this equilibrium meets the demand curve. However, a monopolist isn't desirable for consumers as they create a deadweight loss. (Shown below) The third type of market structure is an oligopoly. This type of market can be seen as being imperfect (where as a monopoly and competitive markets can be seen as being perfect). There are only a few sellers who dominate this type of market, all of which sell similar goods- an example being supermarkets, which are dominated by Tesco, Sainsburys and ASDA.
The fiscal policy is primarily an instrument in the hands of the government whereby it estimates its revenues and expenditures in the economy. This is a very important tool as it would define the flow of money from different sources, indicating the level of activity in the economy. It also defines the broad policies of the government indicating the outwards flow of money in to different sectors of the economy to maintain the overall health of the economy and fulfill its social goals. Apart from the fiscal policy every country has monetary policy at its disposal. This is primarily a tool at the disposal of the central bank of a country which uses different tools to manage the macro economic variables of a country to keep the economy stable or to stabilize it in situations of fluctuations.
Throughout Karl Marx writings, capitalism is described as one of his major works. He defines capitalism as constantly revolutionizing amongst goods. Marx defines capital as the capitalist mode of production, a form of exchange, and a commodity. Marx asserts that the exchange of commodities is the beginning point of capitol. One other thing that Marx points out is the importance of money to capitol.
It analyse the national goals of the economy, such as maintaining full employment, stabilizing the economy or pursuing the economic growth. A market, in an economic view refers to which buyers and sellers negotiate the exchange of specific goods. Markets can be distinguished into product
The Keynesian theory enumerated three principle tenets in which it would affect aggregate demand thus achieving equilibrium in the economy and these include private and public economic decisions have great impact on aggregate demands, prices respond slowly to changes in supply and demand and lastly alterations in aggregate demand either anticipated or unanticipated have effect on real output and employment
The marginal revenue curve of a monopolist is below the average revenue curve and the MR curve falls faster than the AR curve, because he has to decrease the price of his product to sell an additional unit. The price elasticity of demand acts as a constraint on the pricing-power of the monopolist Assuming that the monopolist aims to maximize profits (where MR=MC), we establish a short run price and output equilibrium as shown in the diagram
His rational expectations theory was developed as a challenge to some of the ideas regarding aggregate demand from classic economist John Maynard Keynes. The theory of rational expectations says that because people are forward-looking and rational (as opposed to emotional), actual outcomes will turn out to be very close to the expectations of all the players in the economy. The theory of rational expectations can be directly applied to the labor market - specifically, what happens to unemployment. The rational expectations theory predicts that, because companies and workers rely not only on past information but also make predictions about the future, the labor market will generally be in equilibrium most of the time, so unemployment is at its natural rate. Rational expectations theory also leads to the conclusion that, although the government can help reduce the unemployment rate, their actions will only lead to higher prices.