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The production possibilities frontier (PPF) for guns versus butter. Points like X that are outside the PPF are impossible to achieve. Points such as B, C, and D illustrate the trade-off between guns and butter: at these levels of production, producing more of one requires producing less of the other.
Also not shown in this simple illustration of the economy are other aspects of economic activity such as investment in capital (produced—or fixed—assets such as structures, equipment, research and development, and software), flows of financial capital (such as stocks, bonds, and bank deposits), and the contributions of these flows to the ...
In socialist economic systems , production for use is carried out; decisions regarding the use of the means of production are adjusted to satisfy economic demand; and investment is determined through economic planning procedures. There is a wide range of proposed planning procedures and ownership structures for socialist systems, with the ...
[2] [page needed] For example, a person's income in an economic sense may be different from their income as defined by law. [2] An extremely important definition of income is Haig–Simons income, which defines income as Consumption + Change in net worth and is widely used in economics. [2]
Moreover, there are likely to be situations where a purchaser may require a particular, firm-specific investment of a supplier which would be profitable for both; but after the investment has been made it becomes a sunk cost and the purchaser can attempt to re-negotiate the contract such that the supplier may make a loss on the investment (this ...
Each cash inflow/outflow is discounted back to its present value (PV). Then all are summed such that NPV is the sum of all terms: = (+) where: t is the time of the cash flow; i is the discount rate, i.e. the return that could be earned per unit of time on an investment with similar risk
Research indicates that human capital investments have high economic returns throughout childhood and young adulthood. [ 2 ] [ 3 ] Companies can invest in human capital; for example, through education and training , improving levels of quality and production.
Financial independence is a state where an individual or household has accumulated sufficient financial resources to cover its living expenses without having to depend on active employment or work to earn money in order to maintain its current lifestyle. [1]
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