What is BEP ?

Break-Even Point - BEP

1. In general, the point at which gains equal losses.

2. In options, the market price that a stock must reach for option buyers to avoid a loss if they exercise. For a call, it is the strike price plus the premium paid. For a put, it is the strike price minus the premium paid.

For businesses, reaching the break-even point is the first major step towards profitability.

What is NTB (Non Tariff Barrier) ?

Non-tariff barriers to trade(NTB's) are trade barriers that restrict imports but are not in the usual form of a tariff.

In some forms, they are criticized as a means to evade free trade rules such as those of the World Trade Organization (WTO), the European Union (EU), or North American Free Trade Agreement (NAFTA) that restrict the use of tariffs. Some common examples of NTB's are anti-dumping measures and countervailing duties, which, although they are called "non-tariff" barriers, have the effect of tariffs once they are enacted. Their use has risen sharply after the WTO rules led to a very significant reduction in tariff use.

Some non-tariff trade barriers are expressly permitted in very limited circumstances, when they are deemed necessary to protect health, safety, or sanitation, or to protect depletable natural resources.

What is ROO ?

There are basically two sets of rules of origin for determining country of origin in the EU (and these terms may apply to other situations):

• Non-preferential Rules of Origin
• Preferential Rules of Origin

Non-preferential

Non-preferential Rules of Origin (RoO) is used to determined the country of origin for certain purposes. These purposes may be for quotas, anti-dumping, anti-circumvention, statistics or origin labelling.

The basis for the non-preferential RoO comes originates from the Kyoto-convention which states that if a product is wholly obtained or produced completely within one country the product shall be deemed having origin in that country. For products which has been produced in more than one country the product shall be determined to have origin in the country where the last substantial transformation took place.

To determine exactly what is last substantial transformation three general rules are applied: 1. change of tariff classification (on any level, even though 4-digit level is the most common 2. value added-rule (ad-valorem) 3. special processing rule, the minimum transformation is described. For instance, in the EU non-preferential Rules of Origin for T-shirts (HS6109) the origin is supposed to be in the country where the complete making-up was done.

It is important to remember that according to the non-preferential RoO a product does always have an origin and only one origin. It is however also important to remember that the non-preferential RoO may differ form country to country meaning that the same product may have different origins depending on which country's scheme is applied. For the above mentioned trade policy instrument it is always that importing country's RoO that are applied.

Preferential

What is Input Output Analysis ?

Wassily Leontief won a Nobel Prize in Economics in 1973 for him explanation of the economy
using his input-output model. There are two application of the Leontief model:a closed model and an open model. A closed model deals only with the income of each industry whereas the open model finds the amount of production needed to satisfy an increase in demand. Example one will familiarize you with the terminology and what different vectors represent. Using the same vector names as in the example we run through the linear algebra. Then the technology matrix from 1992 will be used to analyze the interdependencies among the sectors. The most useful application of input-output analysis for the economist or a common broker is the ability to be able to see how the change in demand for one industry effects the entire economy. I will focus on showing that the same totalincrease of demand will have different effects on the Gross Domestic Product, when the demand is added to different industries.

What is aggregate demand ?

aggregate demand is the total demand for final goods and services in the economy (Y) at a given time and price level^[1]. It is the amount of goods and services in the economy that will be purchased at all possible price levels. ^[2]This is the demand for the gross domestic product of a country when inventory levels are static. It is often called effective demand or abbreviated as 'AD'. In a general aggregate supply-demand chart, the aggregate demand curve (AD) slopes downward (indicating that higher outputs are demanded at lower price levels)

What is GDP ?

Gross Domestic Product is The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. The GDP report is released at 8:30 am EST on the last day of each quarter and reflects the previous quarter. Growth in GDP is what matters, and the U.S. GDP growth has historically averaged about 2.5-3% per year but with substantial deviations. Each initial GDP report will be revised twice before the final figure is settled upon: the "advance" report is followed by the "preliminary" report about a month later and a final report a month after that. Significant revisions to the advance number can cause additional ripples through the markets. The GDP numbers are reported in two forms: current dollar and constant dollar. Current dollar GDP is calculated using today's dollars and makes comparisons between time periods difficult because of the effects of inflation. Constant dollar GDP solves this problem by converting the current information into some standard era dollar, such as 1997 dollars. This process factors out the effects of inflation and allows easy comparisons between periods. It is important to differentiate Gross Domestic Product from Gross National Product (GNP). GDP includes only goods and services produced within the geographic boundaries of the U.S., regardless of the producer's nationality. GNP doesn't include goods and services produced by foreign producers, but does include goods and services produced by U.S. firms operating in foreign countries.

What is CEPT ?

Common Effective Preferential Tariff (CEPT) is cooperative arrangement among ASEAN Member States to reduce intra-regional tariffs and remove non-tariff barriers over a 10 year period commencing 1 January 1993. Objective of the Scheme is to reduce tariffs on all manufactured goods to 0-5% by the year 2003 for the original six member states, Malaysia, Singapore, Brunei, Thailand, Philippines and Indonesia.
The new members of ASEAN, namely Vietnam, Lao PDR, Myanmar and Cambodia have been given the same 10 year flexibility to reduce tariffs from the time of their membership of ASEAN;

• Vietnam will reduce tariffs to 0-5% by 2006
  
• Laos PDR and Myanmar by 2008
  
• Cambodia by 2010
  

In 2003 for the original six member states, a total of 98.8% of tariff lines are already in the inclusion list for tariff reduction, out of which 99.55%have now duties between 0-5%.

What is Europe Union ?

1949-1959

A peaceful Europe – the beginnings of cooperation

The European Union is set up with the aim of ending the frequent and bloody wars between neighbours, which culminated in the Second World War. As of 1950, the European Coal and Steel Community begins to unite European countries economically and politically in order to secure lasting peace. The six founders are Belgium, France, Germany, Italy, Luxembourg and the Netherlands. The 1950s are dominated by a cold war between east and west. Protests in Hungary against the Communist regime are put down by Soviet tanks in 1956; while the following year, 1957, the Soviet Union takes the lead in the space race, when it launches the first man-made space satellite, Sputnik 1. Also in 1957, the Treaty of Rome creates the European Economic Community (EEC), or ‘Common Market’.

1960-1969

The ‘Swinging Sixties’ – a period of economic growth

The 1960s sees the emergence of 'youth culture’, with groups such as The Beatles attracting huge crowds of teenage fans wherever they appear, helping to stimulate a cultural revolution and widening the generation gap. It is a good period for the economy, helped by the fact that EU countries stop charging custom duties when they trade with each other. They also agree joint control over food production, so that everybody now has enough to eat - and soon there is even surplus agricultural produce. May 1968 becomes famous for student riots in Paris, and many changes in society and behaviour become associated with the so-called ‘68 generation’.

1970-1979

A growing Community – the first Enlargement

Denmark, Ireland and the United Kingdom join the European Union on 1 January 1973, raising the number of member states to nine. The short, yet brutal, Arab-Israeli war of October 1973 result in an energy crisis and economic problems in Europe. The last right-wing dictatorships in Europe come to an end with the overthrow of the Salazar regime in Portugal in 1974 and the death of General Franco of Spain in 1975. The EU regional policy starts to transfer huge sums to create jobs and infrastructure in poorer areas. The European Parliament increases its influence in EU affairs and in 1979 all citizens can, for the first time, elect their members directly.

1980-1989

The changing face of Europe - the fall of the Berlin Wall

The Polish trade union, Solidarność, and its leader Lech Walesa, become household names across Europe and the world following the Gdansk shipyard strikes in the summer of 1980. In 1981, Greece becomes the 10th member of the EU and Spain and Portugal follow five years later. In 1987 the Single European Act is signed. This is a treaty which provides the basis for a vast six-year programme aimed at sorting out the problems with the free-flow of trade across EU borders and thus creates the ‘Single Market’. There is major political upheaval when, on 9 November 1989, the Berlin Wall is pulled down and the border between East and West Germany is opened for the first time in 28 years, this leads to the reunification of Germany when both East and West Germany are united in October 1990.

1990-1999

A Europe without frontiers

With the collapse of communism across central and eastern Europe, Europeans become closer neighbours. In 1993 the Single Market is completed with the the 'four freedoms' of: movement of goods, services, people and money. The 1990s is also the decade of two treaties, the ‘Maastricht’ Treaty on European Union in 1993 and the Treaty of Amsterdam in 1999. People are concerned about how to protect the environment and also how Europeans can act together when it comes to security and defence matters. In 1995 the EU gains three more new members, Austria, Finland and Sweden. A small village in Luxembourg gives its name to the ‘Schengen’ agreements that gradually allow people to travel without having their passports checked at the borders. Millions of young people study in other countries with EU support. Communication is made easier as more and more people start using mobile phones and the internet.

2000-today

A decade of further expansion

The euro is the new currency for many Europeans. 11 September 2001 becomes synonymous with the 'War on Terror' after hijacked airliners are flown into buildings in New York and Washington. EU countries begin to work much more closely together to fight crime. The political divisions between east and west Europe are finally declared healed when no fewer than 10 new countries join the EU in 2004. Many people think that it is time for Europe to have a constitution but what sort of constitution is by no means easy to agree, so the debate on the future of Europe rages on.

What is Opportunity Costs ?

is what we give up when we increase the consumption or production of an activity or good. Opportunity costs arise because of our limited resources.

What is Macroeconomics ?

is a branch of economics that deals with the performance, structure, and behavior of a national or regional economy as a whole. Along with microeconomics, macroeconomics is one of the two most general fields in economics. It is the study of the behavior and decision-making of entire economies.

Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. Macroeconomists develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, international trade and international finance. In contrast, microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior determines prices and quantities in specific markets.

What is Microeconomics ?

is a branch of economics that studies how individuals, households and firms and some states make decisions to allocate limited resources, typically in markets where goods or services are being bought and sold. Microeconomics examines how these decisions and behaviours affect the supply and demand for goods and services, which determines prices; and how prices, in turn, determine the supply and demand of goods and services.

What is Economics ?

"Economics is the study of people in the ordinary business of life."-- Alfred Marshall, Principles of economics; an introductory volume (London: Macmillan, 1890)

"Economics is the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses."-- Lionel Robbins, An Essay on the Nature and Significance of Economic Science (London: MacMillan, 1932)

Economics is the "study of how societies use scarce resources to produce valuable commodities and distribute them among different people."-- Paul A. Samuelson, Economics (New York: McGraw-Hill, 1948)

Economics is the study of how people choose to use resources.

economics includes the study of labor, land, and investments, of money, income, and production, and of taxes and government expenditures.