Portal:Business and economics

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The Business and Economics Portal

The New York Stock Exchange floor

In the social sciences, economics is the study of human choice behavior and the methodology used to make associated investment and production decisions; in particular, though not limited to, how those choices and decisions determine the allocation of scarce resources and their effect on production, distribution, and consumption. The word "economics" is from the Greek words οἶκος [oikos], meaning "family, household, estate", and νόμος [nomos], or "custom, law", and hence literally means "household management" or "management of the state". An economist is a person using economic concepts and data in the course of employment, or someone who has earned a university degree in the subject. Economics undergraduate courses always cover at least the two main branches:

  • Microeconomics studies the behavior of individual households and firms in making decisions on the allocation of limited resources. Microeconomics applies to markets where goods or services are bought and sold. It examines how decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and quantity demanded of goods and services.
  • Macroeconomics deals with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. This includes national, regional, and global economies.

However, there are also other sub-fields of economics.

In economics, economic systems is the study and analysis of organizing production, distribution, consumption and investment and the study of optimal resource allocation and institutional design. Traditionally the study of economic systems was based on a dichotomy between market economies and planned economies, but contemporary studies compare and contrast a number of different variables, such as ownership structure (Public, Private or Collective), economic coordination (planning, markets or mixed), management structure (Hierarchy versus adhocracy), the incentive system, and the level of centralization in decision-making. An economy can be analyzed in terms of its economic sectors, the classic breakdown being into primary, secondary and tertiary. A business, also known as an enterprise or a firm, is an organization involved in the trade of goods, services, or both to consumers. Businesses are prevalent in capitalist economies, where most of them are privately owned and provide goods and services to customers in exchange of other goods, services, or money. Businesses may also be not-for-profit or state-owned. Management in business and organizations is the function that coordinates the efforts of people to accomplish goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization or initiative to accomplish a goal. Management is also an academic discipline, and is traditionally taught at business schools. Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government budget as well as the labor market regulations, national ownership, trade policy, monetary policy, fiscal policy, regulatory policy, anti-trust policy and industrial policy. In economics, sustainable development refers to development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Selected article

The FairTax is a proposal to reform the federal tax code of the United States. It would replace all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes with a single broad national consumption tax on retail sales. The Fair Tax Act would apply a tax, once, at the point of purchase on all new goods and services for personal consumption. The proposal also calls for a monthly payment to all family households of lawful U.S. residents as an advance rebate, or "prebate", of tax on purchases up to the poverty level.

Selected picture

An 1874 newspaper illustration from Harper's Weekly, showing a man engaging in barter: offering chickens in exchange for his yearly newspaper subscription.

Barter is a system of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is distinguishable from gift economies in many ways; one of them is that the reciprocal exchange is immediate and not delayed in time. It is usually bilateral, but may be multilateral (i.e., mediated through barter organizations) and usually exists parallel to monetary systems in most developed countries, though to a very limited extent. Barter usually replaces money as the method of exchange in times of monetary crisis, such as when the currency may be either unstable (e.g., hyperinflation or deflationary spiral) or simply unavailable for conducting commerce.


Selected economy

Ohio quarter, reverse side, 2002.jpg

The economy of Ohio nominally would be the 25th largest global economy behind Sweden and ahead of Nigeria according to the 2013 World Bank projections, and the 24th largest global economy behind Sweden and ahead of Norway according to the 2013 International Monetary Fund projections. The state had a projected GDP of $526.1 billion in 2013, up from 517.1 in 2012, and up from 501.3 in 2011, according to the Bureau of Economic Analysis. In 2013, Ohio was ranked in the top ten states for best business climate by Site Selection magazine, based on a business-activity database. The state was edged out only by Texas and Nebraska for the 2013 Governor's Cup award from the magazine, based on business growth and economic development. A new report by the Quantitative Economics and Statistics Practices (QUEST) of Ernst & Young in conjunction with the Council On State Taxation (COST), ranks Ohio as third in the nation for friendliest tax environment.

Selected quote

"In all of the fields where individual products have even the slightest element of uniqueness, competition bears but faint resemblance to the pure competition of a highly organized market for a homogeneous product. Consider, for instance, the competitive analysis as applied to the automobile industry. How is one to conceive of demand and supply curves for "automobiles in general" when, owing to variations in quality, design, and type, the prices of individual units range from several hundred to many thousand of dollars? How define the number of units which would be taken from or put upon the market at any particular price? How fit into the analysis a wide variety of costs based mostly upon a correspondingly wide variety of product? These difficulties are great; perhaps they are not insurmountable. The real one one is neither of definition nor of interpretation, and cannot be surmounted. Competitive theory does not fit because competition between through the group is only partial and is highly uneven. The competition between sport roadsters an ten-ton trucks must be virtually zero; an there is probably more justification for drawing up a joint demand schedule for Fords and house room than for Fords and Locomobiles. These are, perhaps, extreme cases, but the fact that each producer through the group has a market at a least partially distinct from those of the others introduces forces, absent under pure competition, which materially alter the result. Prices throughout are adjusted in some measure according to the monopoly principle. Furthermore, advertising and selling outlays are invited by the fact that the market of each seller is limited, whereas the very nature of a purely competitive market precludes a selling problem. The theory of pure competition, in explaining the adjustment of economic forces in such an industry, is a complete misfit.

Because most prices involve monopoly elements, it is monopolistic competition that most people think of in connection with the simple word "competition". In fact, it may almost be said that under pure competition the buyers and sellers do not really compete in the sense in which the word is currently used. One never hears of "competition" in connection with the great markets, and the phrases "price cutting", "underselling", "unfair competition", "meeting competition", "securing a market", etc., are unknown. No wonder the principles of such a market seem so unreal when applied to the "business" world where these terms have meaning. They are based on the supposition that each seller accepts the market price and can dispose of his entire supply without materially affecting it. Thus there is no problem of choosing a price policy, no problem of adapting the product more exactly to the buyers (real or fancied) wants. The theory of pure competition could hardly be expected to fit facts so far different from its assumptions. But there is no reason why a theory of value cannot be formulated which will fit them - a theory concerning itself specifically with goods which are not homogeneous. This is the purpose of the later chapters of this book. We turn first to the theory of pure competition."

Edward Chamberlin, The Theory of Monopolistic Competition, 1933

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19:16, 02 March, 2015 (UTC)
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  • ...the term petrodollars was coined by Ibrahim Oweiss to describe dollars that did not circulate inside the United States, and therefore were not part of the normal money supply, and instead were received by petroleum exporting countries (OPEC) in exchange for oil?


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