Economics Flashcards
What is globalization
A process by which the world becomes more connected through global networks of communication
What are socioeconomic factors
Social and economic experiences that shape our world view: personality, attitude, and lifestyle.
What causes deflation
- Supply of money goes down
- Supply of other goods goes up
- Demand for money goes up
- Demand for other goods goes up
What is foreign currency risk
The uncertainty of the value of net income resulting from the variability of market value foreign-currency-denominated assets
How do you minimize risk of foreign currency fluctuation
Hold payables and receivables in the same currency and amount
How is demand affected in the contraction phase of the business cycle
- Demand for consumer and producer durable goods decline
- Demand for consumer and producer non durable goods remains constant
What is a durable good
Goods not for immediate consumption and able to be kept for a period of time.
What is a nondurable good
Nondurable goods or soft goods (consumables) are the opposite of durable goods. They may be defined either as goods that are immediately consumed in one use or ones that have a lifespan of less than three years.
Fiscal policy
Affects taxes
Affects government spending
Monetary Policy
Affects supply of money
Affects interest rates
What happens when governments purchase securities on the open market
Money supply goes up
What happens when governments sell securities on the open market
Money supply goes down
What is transfer pricing
The process of setting prices for users under the same umbrella.
