How Do Exchange Rates Affect Aggregate Demand and Aggregate Supply?  Foreign trade in goods and services typically involves incurring the costs of production in one currency while receiving revenues from sales in another currency. As a result, movements in exchange rates can have a powerful effect on incentives to export and import, and thus on aggr...

How do Economies of Scale Lead to Trading Advantages? A second broad reason that intra-industry trade between similar nations produces economic gains involves economies of scale. The concept of economies of scale means that as the scale of output goes up, average costs of production decline—at least up to a point.  The concept of economies of scale ...

What is a Certified Information Systems Auditor? Certified Information Systems Auditor (CISA) is a global professional designation awarded by the Information Systems Audit and Control Association (ISACA) to individuals who manage IT and business systems for organizations.   To earn the designation, an applicant must undergo training by ISACA, pass t...

What are the Seven Dimensions of Culture? Following are the 7 Dimensions of Culture as described by Frons Trompenaars and Charles Hampden-Turner: UNIVERSALISM VS. PARTICULARISM: What is more important, rules or relationships? INDIVIDUALISM VS. COLLECTIVISM (Communitarianism): Do we function in a group or as individuals? NEUTRAL VS. EMOTIONAL: Do we ...

What is Recoupment? Generally speaking, recoupment refers to a recovery of expenses. The term has several implications. In the context of investments made by a business in areas such as research and development, recoupment means a direct or indirect recovery of the investment through remunerative undertakings such as product sales or licensing agree...

What is Always Be Closing? ABC, in the sales and marketing world, is acronym for the popular sales teams mantra Always Be Closing. It means that the bottom line for any salesperson is to close a sale, literally, to always be closing a sale to all potential prospects. Although, the phrase Always Be Closing (ABC) is usually referred to as a technique,...

What is Total Quality Management? Total Quality Management (TQM) refers to a structured process aimed at enhancing customer satisfaction through the improvement of a company's output (goods and services) and internal processes.  TQM is a continuous process of removing or reducing to a minimum the manufacturing errors and internal inadequacies that a...

What are the Two Major Views of Managers? Members of an organization and third parties (outside of the organization) generally view managers in two ways: Omnipotent View and Symbolic View. Each of these is discussed below.  What is the Omnipotent View of Management? The omnipotent view of managers is that the manager is all-knowing. She has total co...

What is a Liability?  Liabilities are the things that we owe to others relating to loans extensions of credit and other obligations arising from the course of business, In the accounting equation, assets equals liabilities plus equity. Examples of Liabilities Some common examples of liabilities found on the balance sheet include: accounts payables, ...

What is the Effective Tax Rate? Effective tax rate is the average tax rate applied to a individual or corporations income. Formulas for calculating an effective tax rate are as following; For an individual: Effective tax rate = Total Tax Expense Taxable Income For a corporation: Effective tax rate = Total Tax Expenses Earnings before Taxes For indiv...