Tag Archives: Economics

The Federal Reserve System Essay

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a. Define the purpose and function of money

Money has three purposes in the economy:

First, it is a medium of exchange in economic transactions, by which one party compensates for the other’s goods or services, instead of traditional means such as barter and gold.

Second, individuals can store value in money instead of physical assets. When money is saved, it can be used for future transactions and be exchanged against goods or services that are not needed at the moment.

Third, money is a measurement unit for accounting purposes. That is, since money represents value, the worth of any asset of liability can be stated in money value. This function is essential for understanding the economic significance of an item, either tangible (e.g. machine) or intangible (e.g. goodwill). Another important use of money in this context is the ability to plan budgets and to understand the economic meaning of a business process. Continue reading →

International Trade Research Paper

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International trade is an exchange of goods and services between individuals and firms from different countries. For several millennia, since the dawn of civilizations, the export of goods to foreign countries in exchange for foreign goods was an integral feature of the global economy.

There are several advantages of International Trade. One of them is that international trade enables every country to receive goods, which country does not produce itself as any country is not self-sufficient. There are also limitations of International Trade. For instance, legal and regulatory forces can heavily affect businesses. Government laws, trade regulations, taxes, and other issues are interpreted differently country by country. This can discourage participation in global business (Feenstra, 2003).

This report covers the following four keys points: theories of absolute and comparative advantage, influences that affect exchange rates, reasoning behind free trade agreements (FTAs), and government policy on economic behavior. Continue reading →

Essay on Automation

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In order to answer the question how does a process becomes automatic we should refer to the definition of automation. “Automation or Industrial Automation is the use of computers to control industrial machinery and processes, replacing human operators. It is a step beyond mechanization, where human operators are provided with machinery to help them in their jobs” (Naresh, 2005, p. 302). From this definition we may derive that key factor distinguishing automatic process is replacement of human labor with automated one. It is not necessarily there is no human labor at all, but we expect that there is no direct labor involved in the processing. Human labor can be used to input raw materials (or other resources) for processing, define processing parameters and to control the process. According to the definition of Instrumentation, Systems, and Automation Society (ISA), automatic means “functioning without intervention by a human operator under specified conditions” (Dimon, 2002, p. 34). Continue reading →