A financial transaction involves a change in the status of the finances of two or more businesses or individuals.
Loan - A slightly more complicated transaction in which the lender gives a single large amount of money to the borrower now in return for many smaller repayments of the borrower to the lender over time, usually on a fixed schedule. The smaller delayed repayments usually add up to more than the first large amount. The difference in payments is called interest.
Purchase - The most common type of financial transaction. An item or good is exchanged for money. This transaction results in a decrease in the finances of the purchaser and an increase in the finances of the seller.
Mortgage - A combination loan and purchase. A lender gives a large amount of money to a borrower for the specific purpose of purchasing a very expensive item (most often a house). As part of the transaction, the borrower usually agrees to give the item (or some other high value item) to the lender if the loan is not paid back on time. This guarantee of repayment is known as collateral.
A bank is a business that is based almost entirely on financial transactions. In addition to acting as a lender for loans and mortgages, banks act as a borrower in a special type of loan called an account. The lender is known as a customer and gives unspecified amounts of money to the bank for unspecified amounts of time. The bank agrees to repay any amount in the account at any time and will pay small amounts of interest on the amount of money that the customer leaves in the account for a certain period of time. In addition, the bank guarantees that the money will not be stolen while it is in the account, and will reimburse the customer if it is. In return, the bank gets to use the money for other financial transactions as long as they hold it.
Thursday, January 31, 2008
Wednesday, January 30, 2008
Transaction cost
In economics and related disciplines, a transaction cost is a cost incurred in making an economic exchange. For example, most people, when buying or selling a stock, must pay a commission to their broker; that commission is a transaction cost of doing the stock deal. Or consider buying a banana from a store; to purchase the banana, your costs will be not only the price of the banana itself, but also the energy and effort it requires to find out which of the various banana products you prefer, where to get them and at what price, the cost of traveling from your house to the store and back, the time waiting in line, and the effort of the paying itself; the costs above and beyond the cost of the banana are the transaction costs. When rationally evaluating a potential transaction, it is important to consider transaction costs that might prove significant.
A supplier may bid in a competitive environment with a customer to build a widget. However, to make the widget, the supplier will be required to build specialized machinery which cannot be easily redeployed to make other products. Once the contract is awarded to the supplier, the relationship between customer and supplier changes from a competitive environment to a monopoly/monopsony relationship. This means that the customer has greater leverage over the supplier such as when price cuts occur. To avoid these potential costs, "hostages" may be swapped to avoid this event. These hostages could include partial ownership in the widget factory; revenue sharing might be another way.
Car companies and their suppliers often fit into this category, with the car companies forcing price cuts on their suppliers. Defence suppliers and the military appear to have the opposite problem, with cost overruns occurring quite often.
A supplier may bid in a competitive environment with a customer to build a widget. However, to make the widget, the supplier will be required to build specialized machinery which cannot be easily redeployed to make other products. Once the contract is awarded to the supplier, the relationship between customer and supplier changes from a competitive environment to a monopoly/monopsony relationship. This means that the customer has greater leverage over the supplier such as when price cuts occur. To avoid these potential costs, "hostages" may be swapped to avoid this event. These hostages could include partial ownership in the widget factory; revenue sharing might be another way.
Car companies and their suppliers often fit into this category, with the car companies forcing price cuts on their suppliers. Defence suppliers and the military appear to have the opposite problem, with cost overruns occurring quite often.
Market failure
Market failure is a term used by economists to describe the condition where the allocation of goods and services by a market is not efficient. Market failure can be viewed as a scenario in which individuals' pursuit of self-interest leads to bad results for society as a whole. The first known use of the term by economists was in 1958, but the concept has been traced back to the Victorian philosopher Henry Sidgwick.
The belief that markets can have inefficient outcomes is a common mainstream justification for government intervention in free markets. Economists, especially microeconomists, use many different models and theorems to analyze the causes of market failure, and possible means to correct such a failure when it occurs. Such analysis plays an important role in many types of public policy decisions and studies. However, not all economists believe that market failures occur, or that they are compelling arguments for government intervention, because some types of government policy interventions, such as taxes or subsidies may lead to an inefficient allocation of resources, which has been called government failure.
The belief that markets can have inefficient outcomes is a common mainstream justification for government intervention in free markets. Economists, especially microeconomists, use many different models and theorems to analyze the causes of market failure, and possible means to correct such a failure when it occurs. Such analysis plays an important role in many types of public policy decisions and studies. However, not all economists believe that market failures occur, or that they are compelling arguments for government intervention, because some types of government policy interventions, such as taxes or subsidies may lead to an inefficient allocation of resources, which has been called government failure.
Tuesday, January 29, 2008
Fixed cost
Fixed costs are expenses that do not change in proportion to the activity of a business, within the relevant period or scale of production. For example, a retailer must pay rent and utility bills irrespective of sales. Unit fixed costs, called average fixed costs (AFC), decline with volume, following a rectangular hyperbola as the inverse of the volume of production.
Variable costs by contrast change in relation to the activity of a business such as sales or production volume. In the example of the retailer, variable costs may primarily be composed of inventory (goods purchased for sale), and the cost of goods is therefore almost entirely variable. In manufacturing, direct material costs are an example of a variable cost. An example of variable costs are the prices of the supplies needed to produce a product.
In accounting terminology, fixed costs will broadly include all costs (expenses) which are not included in cost of goods sold, and variable costs are those captured in costs of goods sold. The implicit assumption required to make the equivalence between the accounting and economics terminology is that the accounting period is equal to the period in which fixed costs do not vary in relation to production. In practice, this equivalence does not always hold, and depending on the period under consideration by management, some overhead expenses (such as sales, general and administrative expenses) can be adjusted by management, and the specific allocation of each expense to each category will be decided under cost accounting.
Variable costs by contrast change in relation to the activity of a business such as sales or production volume. In the example of the retailer, variable costs may primarily be composed of inventory (goods purchased for sale), and the cost of goods is therefore almost entirely variable. In manufacturing, direct material costs are an example of a variable cost. An example of variable costs are the prices of the supplies needed to produce a product.
In accounting terminology, fixed costs will broadly include all costs (expenses) which are not included in cost of goods sold, and variable costs are those captured in costs of goods sold. The implicit assumption required to make the equivalence between the accounting and economics terminology is that the accounting period is equal to the period in which fixed costs do not vary in relation to production. In practice, this equivalence does not always hold, and depending on the period under consideration by management, some overhead expenses (such as sales, general and administrative expenses) can be adjusted by management, and the specific allocation of each expense to each category will be decided under cost accounting.
Microeconomics
Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources, typically in markets where goods or services are being bought and sold.
Microeconomics examines how these decisions and behaviours affect the supply and demand for goods and services, which determines prices; and how prices, in turn, determine the supply and demand of goods and services.
One of the goals of microeconomics is to analyze market mechanisms that establish relative prices amongst goods and services and allocation of limited resources amongst many alternative uses. Microeconomics analyzes market failure, where markets fail to produce efficient results, as well as describing the theoretical conditions needed for perfect competition. Significant fields of study in microeconomics include general equilibrium, markets under asymmetric information, choice under uncertainty and economic applications of game theory. Also considered is the elasticity of products within the market system.
In microeconomics, the term "market failure" does not mean that a given market has ceased functioning. Instead, a market failure is a situation in which a given market does not efficiently organize production or allocate goods and services to consumers. Economists normally apply the term to situations where the inefficiency is particularly dramatic, or when it is suggested that non-market institutions would provide a more desirable result. On the other hand, in a political context, stakeholders may use the term market failure to refer to situations where market forces do not serve the public interest.
Microeconomics examines how these decisions and behaviours affect the supply and demand for goods and services, which determines prices; and how prices, in turn, determine the supply and demand of goods and services.
One of the goals of microeconomics is to analyze market mechanisms that establish relative prices amongst goods and services and allocation of limited resources amongst many alternative uses. Microeconomics analyzes market failure, where markets fail to produce efficient results, as well as describing the theoretical conditions needed for perfect competition. Significant fields of study in microeconomics include general equilibrium, markets under asymmetric information, choice under uncertainty and economic applications of game theory. Also considered is the elasticity of products within the market system.
In microeconomics, the term "market failure" does not mean that a given market has ceased functioning. Instead, a market failure is a situation in which a given market does not efficiently organize production or allocate goods and services to consumers. Economists normally apply the term to situations where the inefficiency is particularly dramatic, or when it is suggested that non-market institutions would provide a more desirable result. On the other hand, in a political context, stakeholders may use the term market failure to refer to situations where market forces do not serve the public interest.
Sunday, January 27, 2008
Good (economics and accounting)
A good or commodity in economics is any object or service that increases utility, directly or indirectly, not to be confused with good in a moral or ethical sense (see Utilitarianism and consequentialist ethical theory). A good that cannot be used by consumers directly, such as an office building or capital equipment, can also be referred to as a good as an indirect source of utility through resale value or as a source of income. A 'good' in economic usage does not imply moral acceptance or even legality.
If an object or service is sold for a positive price, then it is a good since the purchaser considers the utility of the object or service more valuable than the money. Some things are useful but not scarce such as air and are referred to as free goods.
A good is an object whose consumption increases the utility of the consumer, for which the quantity demanded exceeds the quantity supplied at zero price. Goods are usually modeled as having decreasing marginal utility. The first car an individual purchases is very valuable; the fourth is much less useful. Thus, in these and similar goods, the marginal utility of additional units approaches zero as the quantity consumed increases. Assuming that one cannot re-sell it, there is a point at which a consumer would decline to purchase an additional car, even at a price very near zero. This is the consumer's satiation point.
If an object or service is sold for a positive price, then it is a good since the purchaser considers the utility of the object or service more valuable than the money. Some things are useful but not scarce such as air and are referred to as free goods.
A good is an object whose consumption increases the utility of the consumer, for which the quantity demanded exceeds the quantity supplied at zero price. Goods are usually modeled as having decreasing marginal utility. The first car an individual purchases is very valuable; the fourth is much less useful. Thus, in these and similar goods, the marginal utility of additional units approaches zero as the quantity consumed increases. Assuming that one cannot re-sell it, there is a point at which a consumer would decline to purchase an additional car, even at a price very near zero. This is the consumer's satiation point.
Saturday, January 26, 2008
West Bank
The West Bank (Arabic: الضفة الغربية, aḍ-Ḍiffä l-Ġarbīyä, Hebrew: הגדה המערבית, Hagadah Hamaaravit), also known as "Judea and Samaria", is a landlocked territory on the west bank of the Jordan River in the Middle East. Since 1967 most of the West Bank has been under Israeli occupation.
After the dissolution of the Ottoman Empire in 1922, this territory was part of the British Mandate of Palestine. The 1948 Arab-Israeli War saw the establishment of Israel in parts of the former mandate, while the West Bank was captured and annexed by Jordan. The 1949 Armistice Agreements defined its interim boundary. From 1948 until 1967, the area was under Jordanian rule, and Jordan did not officially relinquish its claim to the area until 1988. It was captured by Israel during the Six-Day War. With the exception of East Jerusalem it was not annexed by Israel. Most of the residents are Palestinians, although large numbers of Israeli settlements have also been built in the region.
The region did not have a separate existence until 1948–9, when it was defined by the Armistice Agreement between Israel and Jordan. The name "West Bank" was apparently first used by Jordanians at the time of their annexation of the region, and has become the most common name used in English and related languages. The term literally means 'the West bank of the river Jordan'; the Kingdom of Jordan being on the 'East bank' of this same river Jordan.
After the dissolution of the Ottoman Empire in 1922, this territory was part of the British Mandate of Palestine. The 1948 Arab-Israeli War saw the establishment of Israel in parts of the former mandate, while the West Bank was captured and annexed by Jordan. The 1949 Armistice Agreements defined its interim boundary. From 1948 until 1967, the area was under Jordanian rule, and Jordan did not officially relinquish its claim to the area until 1988. It was captured by Israel during the Six-Day War. With the exception of East Jerusalem it was not annexed by Israel. Most of the residents are Palestinians, although large numbers of Israeli settlements have also been built in the region.
The region did not have a separate existence until 1948–9, when it was defined by the Armistice Agreement between Israel and Jordan. The name "West Bank" was apparently first used by Jordanians at the time of their annexation of the region, and has become the most common name used in English and related languages. The term literally means 'the West bank of the river Jordan'; the Kingdom of Jordan being on the 'East bank' of this same river Jordan.
Friday, January 25, 2008
World Bank
The World Bank (the Bank), a part of the World Bank Group (WBG), is an internationally supported bank that provides loans to developing countries for development programs with the stated goal of reducing poverty. The World Bank differs from the World Bank Group in that the former comprises only the International Bank for Reconstruction and Development and the International Development Association, while the latter incorporates these entities in addition to three others.
The World Bank was formally established on December 27, 1945, following the ratification of the Bretton Woods agreement. The concept was originally conceived in July 1944 at the United Nations Monetary and Financial Conference. Two years later, the Bank issued its first, and largest, loan: $250 million to France for post-war reconstruction; an issue which has remained a primary focus, alongside reconstruction after natural disasters, humanitarian emergencies and post-conflict rehabilitation needs affecting developing and transition economies.
The World Bank is one of the three Bretton Woods Institutions which were created in 1944 to rebuild the destroyed Europe after World War II. Later, after the economic revival of Europe, the World Bank’s activities became focused on developing countries. By financing infrastructure projects, poverty should be reduced. Today the focus is on the achievement of the Millennium Development Goals (MDGs), goals calling for the elimination of poverty and the implementation of sustainable development. The constituent parts of the Bank, the IBRD and the IDA, achieve their aims through the provision of low or no interest loans and grants to countries with little or no access to international credit markets. The Bank is a market based non-profit organization, using its high credit rating to make up for the low interest rate of loans.
The World Bank was formally established on December 27, 1945, following the ratification of the Bretton Woods agreement. The concept was originally conceived in July 1944 at the United Nations Monetary and Financial Conference. Two years later, the Bank issued its first, and largest, loan: $250 million to France for post-war reconstruction; an issue which has remained a primary focus, alongside reconstruction after natural disasters, humanitarian emergencies and post-conflict rehabilitation needs affecting developing and transition economies.
The World Bank is one of the three Bretton Woods Institutions which were created in 1944 to rebuild the destroyed Europe after World War II. Later, after the economic revival of Europe, the World Bank’s activities became focused on developing countries. By financing infrastructure projects, poverty should be reduced. Today the focus is on the achievement of the Millennium Development Goals (MDGs), goals calling for the elimination of poverty and the implementation of sustainable development. The constituent parts of the Bank, the IBRD and the IDA, achieve their aims through the provision of low or no interest loans and grants to countries with little or no access to international credit markets. The Bank is a market based non-profit organization, using its high credit rating to make up for the low interest rate of loans.
Thursday, January 24, 2008
Supply chain management
Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.
The definition one American professional association put forward is that Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies.
Some experts distinguish Supply Chain Management and logistics, while others consider the terms to be interchangeable.
Supply Chain Management is also a category of software products.
Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned.
The definition one American professional association put forward is that Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies.
Some experts distinguish Supply Chain Management and logistics, while others consider the terms to be interchangeable.
Supply Chain Management is also a category of software products.
Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned.
Wednesday, January 23, 2008
Buyer brokerage
Buyer brokerage (or Buyer agency as it is also known) is the practice of real estate brokers (and their agents) in the United States and Canada representing a buyer in a real estate transaction rather than, by default, representing the seller either directly or as a sub-agent. In the United Kingdom the most common term to describe agent is Buying agent.
In most US states and Canadian provinces, until the 1990s, buyers who worked with an agent of a real estate broker in finding a house were customers of the brokerage, since, by most common law of most states at the time, the broker represented only sellers. Only in the last fifteen years or so have states passed statute law to create buyers' agency.
Today, if the buyer is working with a broker other than the brokerage which "lists" the property, he may choose to enter into a buyer-brokerage agreement to be represented. (In some cases where dual agency is permitted by law, even the listing broker may represent the buyer). If the buyer does not enter into this agreement, he/she remains as a customer of the broker who is then the sub-agent of seller's broker.
With the increase in the practice of Buyer Agency in the US, especially since the late 1990s in most states, agents (acting under their brokers) have been able to represent buyers in the transaction with a written "Buyer Agency Agreement" not unlike the "Listing Agreement" between brokers and sellers (often referred to as seller agency). The real estate licensee, upon entering into a written agreement with a Buyer, agrees to work solely for the buyer, and, in return, the buyer agrees to exclusive representation.
At this point, a real estate brokerage owes the buyer the duties of:
Loyalty to the buyer by acting in the buyer's best interest.
Confidentiality by not disclosing facts that could influence the buyers ability to negotiate the best terms.
Disclosure to other parties in the transaction that the licensee has been engaged as a buyer's agent.
The broker negotiates price and terms on behalf of the buyers and prepares standard real estate purchase contract by filling in the blanks in the contract form. The buyer's agent acts as a fiduciary for the buyer.
In most US states and Canadian provinces, until the 1990s, buyers who worked with an agent of a real estate broker in finding a house were customers of the brokerage, since, by most common law of most states at the time, the broker represented only sellers. Only in the last fifteen years or so have states passed statute law to create buyers' agency.
Today, if the buyer is working with a broker other than the brokerage which "lists" the property, he may choose to enter into a buyer-brokerage agreement to be represented. (In some cases where dual agency is permitted by law, even the listing broker may represent the buyer). If the buyer does not enter into this agreement, he/she remains as a customer of the broker who is then the sub-agent of seller's broker.
With the increase in the practice of Buyer Agency in the US, especially since the late 1990s in most states, agents (acting under their brokers) have been able to represent buyers in the transaction with a written "Buyer Agency Agreement" not unlike the "Listing Agreement" between brokers and sellers (often referred to as seller agency). The real estate licensee, upon entering into a written agreement with a Buyer, agrees to work solely for the buyer, and, in return, the buyer agrees to exclusive representation.
At this point, a real estate brokerage owes the buyer the duties of:
Loyalty to the buyer by acting in the buyer's best interest.
Confidentiality by not disclosing facts that could influence the buyers ability to negotiate the best terms.
Disclosure to other parties in the transaction that the licensee has been engaged as a buyer's agent.
The broker negotiates price and terms on behalf of the buyers and prepares standard real estate purchase contract by filling in the blanks in the contract form. The buyer's agent acts as a fiduciary for the buyer.
Tuesday, January 22, 2008
Sales
Sales are the activities involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity.
The "deal is closed", means the customer has consented to the proposed product or service by making full or partial payment (as in case of installments) to the seller.
Academically, selling is thought of as a part of marketing, however, the two disciplines are completely different. Sales often forms a separate grouping in a corporate structure, employing separate specialist operatives known as salespersons (singular: salesperson). Sales is considered by many to be a sort of persuading "art". Contrary to popular belief, the methodological approach of selling refers to a systematic process of repetitive and measurable milestones, by which a salesperson relates his offering of a product or service in return enabling the buyer to achieve his goal in an economic way.
Some sales authors and consultants contend that an expertly planned and executed marketing strategy may negate the need for outside sales entirely. They suggest that by effectively bringing more customers "through the door" and enticing them to contact you, sales organizations can dramatically improve their results, efficiency, profitability, and allow salespeople to provide a drastically higher level of customer service and satisfaction, instead of spending the majority of their working hours searching for someone to sell to.
The "deal is closed", means the customer has consented to the proposed product or service by making full or partial payment (as in case of installments) to the seller.
Academically, selling is thought of as a part of marketing, however, the two disciplines are completely different. Sales often forms a separate grouping in a corporate structure, employing separate specialist operatives known as salespersons (singular: salesperson). Sales is considered by many to be a sort of persuading "art". Contrary to popular belief, the methodological approach of selling refers to a systematic process of repetitive and measurable milestones, by which a salesperson relates his offering of a product or service in return enabling the buyer to achieve his goal in an economic way.
Some sales authors and consultants contend that an expertly planned and executed marketing strategy may negate the need for outside sales entirely. They suggest that by effectively bringing more customers "through the door" and enticing them to contact you, sales organizations can dramatically improve their results, efficiency, profitability, and allow salespeople to provide a drastically higher level of customer service and satisfaction, instead of spending the majority of their working hours searching for someone to sell to.
Sunday, January 20, 2008
Barter
Barter is a type of trade that doesn't use any medium of exchange, in which goods or services are exchanged for other goods and/or services. It can be bilateral or multilateral as trade.
Barter and money are different means of balancing an economic exchange. Barter is recognised as trade in societies without monetary systems. Although it can be argued that barter exists in most societies parallel to monetary systems. Barter crosses over to the spheres of trade with money when economies are suffering from a very unstable currency (as when hyperinflation hits). Barter is also used as a concept in regard of intercultural exchange between craftsmen or artists of different countries, especially when the exchange is passing the gap between "the rich world" and "the poor world".
Swapping is the increasingly prevalent informal bartering system in which participants in Internet communities trade items of comparable value on a trust basis.
While swapping is an excellent way to find and obtain items that are inexpensive, it relies upon honesty. A dishonest participant might arrange a swap, and then never complete their end of the transaction, thus getting something for nothing. This practice is called swaplifting,[citation needed] a pun on shoplifting. The victim's recourse is often limited to shunning the swaplifter, or taking him to small claims court.
Complex business models based on the concept of barter is today possible since the advent of Web 2.0 technologies.
In the other word Barter means: The act of trading goods and services between two or more parties without the use of money. Bartering benefits companies and countries that see a mutual benefit in exchanging goods and services rather than cash, and it also enables those who are lacking "hard currency" to obtain goods and services.
Barter and money are different means of balancing an economic exchange. Barter is recognised as trade in societies without monetary systems. Although it can be argued that barter exists in most societies parallel to monetary systems. Barter crosses over to the spheres of trade with money when economies are suffering from a very unstable currency (as when hyperinflation hits). Barter is also used as a concept in regard of intercultural exchange between craftsmen or artists of different countries, especially when the exchange is passing the gap between "the rich world" and "the poor world".
Swapping is the increasingly prevalent informal bartering system in which participants in Internet communities trade items of comparable value on a trust basis.
While swapping is an excellent way to find and obtain items that are inexpensive, it relies upon honesty. A dishonest participant might arrange a swap, and then never complete their end of the transaction, thus getting something for nothing. This practice is called swaplifting,[citation needed] a pun on shoplifting. The victim's recourse is often limited to shunning the swaplifter, or taking him to small claims court.
Complex business models based on the concept of barter is today possible since the advent of Web 2.0 technologies.
In the other word Barter means: The act of trading goods and services between two or more parties without the use of money. Bartering benefits companies and countries that see a mutual benefit in exchanging goods and services rather than cash, and it also enables those who are lacking "hard currency" to obtain goods and services.
Friday, January 18, 2008
Free market
A free market is a market in which prices of goods and services are arranged completely by the mutual consent of sellers and buyers. By definition, in a free market environment buyers and sellers do not coerce or mislead each other nor are they coerced by a third party. In the aggregate, the effect of these decisions en masse is described by the natural law of supply and demand. Free markets contrast sharply with controlled markets, in which governments directly or indirectly regulate prices or supplies, distorting market signals. In the marketplace the price of a good or service helps to quantify its value to consumers and thus balance it against other goods and services. In a free market, this relationship between price and value is more clear than in a controlled market. Through competition between vendors for the provision of products and services, prices tend to decrease, and quality tends to increase.
Free market economics is closely associated with laissez-faire economic philosophy, which expands this environment by confining government intervention to market failures. Hence, with government force limited to a defensive role, government itself does not initiate force in the marketplace beyond levying taxes in order to fund the maintenance of the free marketplace. Some free market advocates oppose taxation as well, claiming that the market is better at providing all valuable services of which defense and law are no exception, and that such services can be provided without direct taxation. Anarcho-capitalists, for example, would substitute arbitration agencies and private defense agencies.
Free market economics is closely associated with laissez-faire economic philosophy, which expands this environment by confining government intervention to market failures. Hence, with government force limited to a defensive role, government itself does not initiate force in the marketplace beyond levying taxes in order to fund the maintenance of the free marketplace. Some free market advocates oppose taxation as well, claiming that the market is better at providing all valuable services of which defense and law are no exception, and that such services can be provided without direct taxation. Anarcho-capitalists, for example, would substitute arbitration agencies and private defense agencies.
Thursday, January 17, 2008
Market
In economics, a market is a social structure for exchange of rights, which enables people, firms and products to be evaluated and priced. There are two roles in markets, buyers and sellers. The definition implies that at least three actors are needed for a market to exist; at least one actor, on the one side of the market, who is aware of at least two actors on the other side whose offers can be evaluated in relation to each other. A market allows buyers and sellers to discover information and carry out a voluntary exchange of goods or services. It is one of the two key institutions for organizing trade, along with the right to own property. In everyday usage, the word "market" may also refer to the location where goods are traded, or in other words, the marketplace.
The function of a market requires, at a minimum, that both parties expect to become better off as a result of the transaction. Markets generally rely on price adjustments to provide information to parties engaging in a transaction, so that each may accurately gauge the subsequent change of their welfare. In less sophisticated markets, such as those involving barter, individual buyers and sellers must engage in a more lengthy process of haggling in order to gain the same information. Markets are efficient when the price of a good or service attracts exactly as much demand as the market can currently supply. The chief function of a market, then, is to adjust prices to accommodate fluctuations in supply and demand in order to achieve allocative efficiency.
The function of a market requires, at a minimum, that both parties expect to become better off as a result of the transaction. Markets generally rely on price adjustments to provide information to parties engaging in a transaction, so that each may accurately gauge the subsequent change of their welfare. In less sophisticated markets, such as those involving barter, individual buyers and sellers must engage in a more lengthy process of haggling in order to gain the same information. Markets are efficient when the price of a good or service attracts exactly as much demand as the market can currently supply. The chief function of a market, then, is to adjust prices to accommodate fluctuations in supply and demand in order to achieve allocative efficiency.
Saturday, January 12, 2008
Trade
A mechanism that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and services. Modern traders instead generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade.
Trade exists for many reasons. Due to specialisation and division of labor, most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions have a comparative advantage in the production of some tradable commodity, or because different regions' size allows for the benefits of mass production. As such, trade at market prices between locations benefits both locations.
Trading can also refer to the action performed by traders and other market agents in the financial markets.
Trade originated with the start of communication in prehistoric times. Trading was the main facility of prehistoric people, who bartered goods and services from each other before the innovation of the modern day currency. Peter Watson dates the history of long-distance commerce from circa 150,000 years ago.
Trade exists for many reasons. Due to specialisation and division of labor, most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions have a comparative advantage in the production of some tradable commodity, or because different regions' size allows for the benefits of mass production. As such, trade at market prices between locations benefits both locations.
Trading can also refer to the action performed by traders and other market agents in the financial markets.
Trade originated with the start of communication in prehistoric times. Trading was the main facility of prehistoric people, who bartered goods and services from each other before the innovation of the modern day currency. Peter Watson dates the history of long-distance commerce from circa 150,000 years ago.
Friday, January 11, 2008
The Best Buy
Alibata Buy and Sell Blog Features:
Best Buy Co., Inc. (NYSE: BBY) is a Fortune 100 company and the largest specialty retailer of consumer electronics in the United States and Canada, accounting for 17% of the market.[1] The company's subsidiaries include Geek Squad, Magnolia Audio Video, Pacific Sales, and, in Canada, Best Buy Canada. Together these operate more than 1,150 stores in the United States, Canada and China. The company's corporate headquarters are located in Richfield, Minnesota, USA (near Minneapolis). On June 26, 2007, Best Buy announced a 40% increase in its operations, with plans to operate more than 1,800 stores worldwide, including 1,400 Best Buy stores in the U.S.
Best Buy was named "Company of the Year" by Forbes magazine in 2004, "Specialty Retailer of the Decade" by Discount Store News in 2001, ranked in the Top 10 of "America's Most Generous Corporations" by Forbes magazine, and made Fortune Magazine's List of Most Admired Companies in 2006.
Best Buy Co., Inc. (NYSE: BBY) is a Fortune 100 company and the largest specialty retailer of consumer electronics in the United States and Canada, accounting for 17% of the market.[1] The company's subsidiaries include Geek Squad, Magnolia Audio Video, Pacific Sales, and, in Canada, Best Buy Canada. Together these operate more than 1,150 stores in the United States, Canada and China. The company's corporate headquarters are located in Richfield, Minnesota, USA (near Minneapolis). On June 26, 2007, Best Buy announced a 40% increase in its operations, with plans to operate more than 1,800 stores worldwide, including 1,400 Best Buy stores in the U.S.
Best Buy was named "Company of the Year" by Forbes magazine in 2004, "Specialty Retailer of the Decade" by Discount Store News in 2001, ranked in the Top 10 of "America's Most Generous Corporations" by Forbes magazine, and made Fortune Magazine's List of Most Admired Companies in 2006.
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