How do Expectations about Future Exchange Rates Shift Demand? One reason to demand a currency on the foreign exchange market is the belief that the currency's value is about to increase. One reason to supply a currency—that is, sell it on the foreign exchange market—is the expectation that the currency's value is about to decline. For example, imagi...

What is a Working Ratio? The working ration is an accounting ratio that determines if a company can recover operating expenses from its yearly revenue.  If the working ratio is low, it signifies that the firm is financially sustainable. A lower value represents a small portion of the gross income of a company will be used to pay its expenses, and th...

What is the Benefit Principle? In taxation, the benefit principle is a principle based on the notion that those who benefit more from government expenditure or spending should pay more taxes that those that do not. This principle is one that outlines what government expenditure should be tailored at and those that should pay for them. Hence, individ...

What is a Spin Out? A spinout is also known as a spin-off or starburst. It is a process whereby a new business entity emerges from an existing business. When an existing business, often a parent company slits up its parts, divisions, subsidiaries or units, to create a new and independent company, a spinout has occurred. When a spinout transaction is...

What is an Associate In Commercial Underwriting? The Associate in Commercial Underwriting refers to a professional designation that the Insurance Institute of America awards to individuals that successfully complete four national exams. Two of the four exams are designated for the AU program, while the other two are for Chartered Property Casualty U...

What is the Closing Process? The Closing Process is a step in the accounting cycle that occurs at the end of the accounting period, after the financial statements are completed. This serves to get everything ready for the next year.  In order to understand this, you need to know the difference between permanent and temporary accounts.  What is a Per...

What is the Public Utility Holding Company Act of 1935? The 1935 Public Utility Holding Company Act (PUHCA) was passed by the U.S. Congress because of electric utilities and utility holding companies. Another name for this act is the Wheeler-Rayburn Act. It was passed to facilitate electric utility regulation by either restricting their operations t...

What is the Expenditure Multiplier? A key concept in Keynesian economics is the expenditure   multiplier. The expenditure multiplier is the idea that not only does spending affect the equilibrium level of GDP, but that spending is powerful. More precisely, it means that a change in spending causes a more than proportionate change in GDP.     ΔY  /  ...

What are the benefits of a security interest to creditors? Taking a security interest in collateral to secure a debt reduces the risk to the creditor. It dissuades the creditor from defaulting on the loan for fear of losing the collateral. Also, it provides the secured creditor the ability to recuperate some or all of the debt by repossessing and se...

Approach to  Conflict Resolution Affects Negotiation Strategy The conflicting interests of parties to a negotiation can be presented in a two-dimensional framework, known as a dual-concern model. The model provides a negotiators concerns for personal outcomes and the outcomes of others independently. It demonstrates how parties arrive at a dispositi...