Report on Financial and Economic Literacy for Managers

Added on - 21 Apr 2020

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Running head: FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSFinancial and Economic Literacy for ManagersName of the Student:Name of the University:Author’s Note:Course ID:
1FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSTable of ContentsAnswer to Question 1:.....................................................................................................................2Answer to Question 2:.....................................................................................................................4Introduction......................................................................................................................................4Answer to Question 3:.....................................................................................................................8Answer to Question 5:...................................................................................................................11Answer to Part A:......................................................................................................................11Answer to Part B:.......................................................................................................................12Answer to Part C:.......................................................................................................................12References:....................................................................................................................................14
2FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSAnswer to Question 1:IntroductionThe commercial sector in the global framework, over the years, has undergone immensedynamics and modifications and has also become more inclusive as well as integrated. Theglobal phenomenon like Globalization and others have contributed significantly to theintegration of the business sectors and the labour markets across the world (Beck 2015). In thiscontext, globalization can be defined as primarily of economic process of integration, which inturn has led to a more free and easy flow of goods and services as well as factors of productionacross different corners of the world. This involves immense dynamics in the global productiondynamics and labour market scenarios. The report takes into these economic concepts ofGlobalization and labour market dynamics and tries to explain the contemporary commonphenomenon of outsourcing of call centres jobs in countries like India (Fujita and Thisse 2013).Globalization and Labour Market in OutsourcingThe labour market, by the meaning of the phrase, refers to the demand and supplydynamics of labour resources in different countries. The demand side of labour markets primarilyconsists of the employers, whose primary concern remains of hiring the best labour resources inthe cheapest of prices, in order to maximize their profit and revenue generation (Potrafke 2013).On the other hand, the supply side of the labour market in the country consists of the people whoare eligible to work, who mainly competes with one another with the objective of getting the job,which can maximize their monetary as well as overall welfare. Thus, the labour market can bedefined as the forum of interactions of the demand and supply side players of labour, who havetheir own interests and objectives (Milberg and Winkler 2013).
3FINANCIAL AND ECONOMIC LITERACY FOR MANAGERSIn the recent few decades, the labour markets across the world have become moreintegrated, much of which can be attributed to the worldwide economic and social phenomenonlike Globalization, which have made trading and exchange of commodities as well as servicesmore easy across the countries (Basu 2016). This in turn, has led to the efficient usage andimplementation of the comparative advantages, which the different trading countries enjoy indifferent industries, which are elaborated in the following sections.Comparative AdvantagesThe theory of comparative advantage, first put forward by David Ricardo, emphasizes onthe fact that the countries should concentrate more on the production of those commodities andservices in which they have least opportunity cost and then trade the same for those in theproduction of which they have high opportunity cost or comparative disadvantages (Laursen2015).This theory of comparative advantage, in turn indicates towards the aspect of utilizationof those resources more widely, which are abundantly available in the country itself. In otherwords, according to the theory of comparative advantage in production and trade, the countries inwhich labour, as a factor of production is present in abundance, should concentrate on thoseindustries which uses labour more intensively. On the other hand, those countries in whichcapital is more abundant than that of labour, should produce more of those commodities andservices, for the production of which, capital is required more intensively (Cuñat and Melitz2012).
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