Author Archives: Kevin Smith

This is an autobiography about me.

Cost Accounting

The field of accounting is typically divided into two areas, financial accounting and cost (or managerial) accounting. Whereas the purpose of financial accounting is to report the results and position of a business to external parties, cost accounting focuses on internal reporting for the purpose of improving managerial decision making. This means that cost accounting Read More…

Risk

Risk is one of the most important concepts in investing, economics, and personal finance. Our appetite for, or aversion to, risk is the biggest driver behind spend and save decisions. Despite this, very few people really understand just how big a role risk plays in our everyday lives. Risk Definition “Risk” is the probability for Read More…

Property Rights

Property rights is the foundation of all free-enterprise economic systems. It is what allows people to profit from capital and ideas, without fear of seizure by the government or theft. Definition “Property Rights” usually refers to a set of fundamental rights giving citizens control over their own land, capital, and ideas. Land Property Rights The Read More…

Monetary Policy

The government has two main ways it tries to influence the economy – through Fiscal Policy and Monetary Policy. Fiscal policy is the more direct approach, where the government levies taxes and subsidies to try to balance its budget while encouraging growth, while monetary policy is less direct – tweaking interest rates and modifying the Read More…

International Trade

International Trade is the system under which businesses, individuals, and governments trade goods and services. This exchange from many different National economies is what makes up the Global economy. Imports and Exports When we talk about international trade, we usually think in terms of imports (the goods and services a country buys from outside) and Read More…

Inflation

Inflation: how much less a dollar is worth next year compared to today. Most consumers hate inflation – it erodes your savings, and eats away at the real benefits you get from increasing income. However, inflation plays a necessary role in the economy, and without it much of the economy would quickly fall apart. Inflation Read More…

Government Impact on the Economy

As a society with a market-based economy, the government has three broad mandates: Ensure the common defense Promote economic growth Strive to maintain a just society On the face, only one of these implies direct intervention in the economy, but all three are interconnected with the economy as a whole. This means every action taken Read More…

Fiscal Policy

Government spending makes up a whopping 20% of all spending in the American economy, including the salaries of all government employees, government contracts to private companies, and military spending. This is all paid for by taxes, meaning more than 1/3 of all economic activity filters through the public sector in some way. This means government Read More…

Time Value of Money

The “Time Value of Money” is one of the most important concepts in economics, investing, and business. For individuals, this determines how much you save and spend. For businesses, it determines how quickly they try to expand. For investors, it decides the mix of a portfolio. What is the Time Value of Money? “Time is Read More…