Financial Consultancy

1. Financial Consultancy

2. What does this quote say?Explain in your own words. • “Economics is a word of Greek origin, but phenomena such as exchange, trade and money were already known to early civilizations thousands of years ago"

3. Task • State your own preference of reasons for studying economics, • list them on a scale from 1 to 6 and • explain your choice.

4. CLASSIFICATION OF ECONOMICS SUBJECTS

5. PRIMARY CLASSIFICATION OF ECONOMICS

6. DEFINITION • The difference between economics and economy is evident from the very definitions of both spheres. • Economics is primarily a kind of social science, • whereas an economy is the realized system of economic activities carried out by subjects in a certain entity. • In this sense we talk, for example, about Czech economy or the world economy and the like.”

7. ECONOMIC SECTORS

8. TYPES OF ECONOMIC SYSTEMS

9. PRODUCTION OUTPUTS Immovables Outputs Movables

10. TYPES OF PRODUCTION

11. What does this quote say?Explain in your own words. • “Public policy can choose and decide on the amount of production between two types of goods. Such pairs can be e.g. luxury goods versus essential goods" (consumer and capital goods, investment and future consumption, etc.)

12. SYSTEM OF NATIONAL ACCOUNTS

13. DOMESTIC AND NATIONAL PRODUCT • GDP = C +G +I +NX

14. NATIONAL INCOME • GNI = GDP + net income from assets abroad • GNI = GNP – indirect business taxes

15. ECONOMIC GOALS

16. ECONOMIC GROWTH – YES OR NO? • “The idea that economic growth is necessary is deeply rooted in western culture and forms the basis of the economic strategies for developed and developing nations around the globe.”

17. What does this quote say?Explain in your own words. • “Economic growth does not come risk-free”

19. What does this quote say?Explain in your own words. • “Economic growth does not come risk-free”

20. What does this quote say?Explain in your own words. • “A business cycle is not a regular, predictable or repeating phenomenon like the swing of the pendulum of a clock. Its timing is random and, to a large degree, unpredictable”

21. EVOLUTION OF MONEY

22. What does this quote say?Explain in your own words. • “Utility is the desirability of an outcome, usually expressed as being between zero and one (e.g. death typically has a utility value of zero and a full healthy life has a value of one”

23. What does this quote say?Explain in your own words. • “In modern classical economies, the concept of money-price is deemed sufficient in order to understand trading processes and markets. Exchange value thus becomes simply the price for which a good will trade in given market.”

24. What does this quote say?Explain in your own words. • “As a unit of account, money can be used to add up apples and oranges in some common value.”

25. What does this quote say?Explain in your own words. • “Money is a comparative object, a tertium comparationis (“a third comparative unit”).”

26. What does this quote say?Explain in your own words. • “Money is not one particular type of wealth among others, but the universal form of all types so far as they are expressed in an external embodiment and so can be taken as “things”.”

27. What does this quote say?Explain in your own words. “I am an advocate of paper money, buthat paper money must represent what it professes on its face. I do not wish to hold in my hands the printed lies of government.”

28. What does this quote say?Explain in your own words. • “Money is not, properly speaking, one of the subjects of commerce, but only the instrument which men have agreed upon to facilitate the exchange of one commodity for another”

29. What does this quote say?Do you agree? • “Money speaks sense in language all nations understand”

30. STURCTURE OF MONEY SUPPLY

31. NEAR MONEY

32. AGGREGATES

33. PAYMENT INSTRUMENTS

34. Simple interest • I = (r * B0) * n • Where r = the period interest rate (I/n), B0 = principal or its balance, n = number of periods. If, for example, somebody barrows CZK 20,000 at 4.8% p.a. 3 months, his payable interest will be • 0.048 / 12 * 20,000 * 3 = 240

35. PRIVATE INCOMES

36. What does this quote say?Explain in your own words. • “Financial market is an aggregate of various instruments, institutions and relationships that are designed to facilitate exchanges”.

37. TYPES OF FINANCIAL MARKETS

38. MONEY MARKETS

39. What does this quote say?Explain in your own words. • “As opposed to simple selling, a market implies trade that is transacted with some regularity and regulation, and in which a certain amount of competition is involved; it arises whenever groups of buyers and sellers come together, and allows the operation of supply and demand.”

40. What does this quote say?Explain in your own words. • “You may not think, as single individual, that you have much power in these markets. That may be the case, but remember the market is made up of millions of individuals each bringing their own set of characteristics to the market. Your individual decision is but one that sends a message to the suppliers about the product they are offering to sale.”

41. MARKET MECHANISM

42. What does this quote say?Explain in your own words. • “Most organization now must compete in two market places: • a physical (traditional) one and • the emerging electronic one, mediated by the internet.”

43. ELASTICITY

44. TYPES OF MARKET

45. CLASSIFICATION BY TERRITORY

46. CLASSIFICATION BY PRODUCT

47. CLASSIFICATION BY COSTUMERS

48. What does this quote say?Explain in your own words. • “An industry with a low level of competitiveness can be a sanctuary from tough times for a while, but never long term.”

49. What does this quote say?Explain in your own words. • “Competition is a performance stimulant.”

50. What does this quote say?Explain in your own words. • “There´s no resting place for an enterprise in competitive economy.”