What is Foreign Direct Investment? We often divide financial investments that cross international boundaries, and require exchanging currency into two categories. Foreign direct investment (FDI) refers to purchasing a firm (at least ten percent) in another country or starting up a new enterprise in a foreign country For example, in 2008 the Belgian ...

What is the Government Accountability Office (GAO)? The 'Government Accountability Office (GAO) is an agency under the legislative branch of the U.S. government that monitors and audits the United States Congress spending and operations. It keeps track of the taxpayers dollars that are used by the legislature and the executive branches. It monitors ...

What is the Feedback-Rule Policy? A Feedback-Rule Policy is a response of a government to prevailing economic situations. When a government is prompted to take certain actions due to the prevailing economic circumstances such as economic instability, it can be described as a feedback-rule policy. The purpose of feedback-rule police is to restore sta...

What is the International Monetary Fund (IMF)? The International Monetary Fund (IMF) is similar to an international bank with the underlying purpose of fostering global monetary policy, commerce, and trade. The intended result is to increase employment levels, drive economic growth, and reduce poverty. The mission of IMF according to its website is ...

What is a DuPont Analysis? The DuPont analysis which is also called the DuPont model or the DuPont identity is a framework which is utilized in the analysis of fundamental performance that was made famous by the DuPont corporation. DuPont model is a very useful computational technique used in decomposing the different factors behind returns on equit...

Using Differential Analysis to Make Decisions Differential revenues and costs (also called relevant revenues and costs or incremental revenues and costs) represent the difference in revenues and costs among alternative courses of action.  Analyzing this difference is called differential analysis (or incremental analysis).  The general rule is to sel...

What is a Constituent Relationship in a Negotiation? Constituent, the party whom the principal represents, is ostensibly on the same side as a principal, but exerts independent influence on the outcome through the principal. The challenges for constituent relationships include: Identification - Often it is difficult to identify individuals in a cons...

What is a Commodity Price Risk? Commodity price risk refers to financial losses that may occur to both the consumer, and the producer when there is a change in commodity prices. A risk for the buyers is that the prices for commodities may be high. Take an example of the carpenters. They have to buy wood to make furniture. If the wood prices go up, i...

What is acceptance of an offer? Acceptance of a contract is the assent of the offeree to the demands contained in the offerors offer. Acceptance of the contract varies depending upon whether the contract is unilateral or bilateral. An offeree accepts a bilateral contract by making the return promise demanded by the offeror. An offeree accepts a unil...

What is the Least Squares Method? The least squares method is a procedure of finding the best fit for a data set. This method uses statistics and mathematical regression analysis to find the line of best fit when a data set is given. Using the least squares regression analysis, the distinct behaviors of dependent variables in a data set are predicte...