1.1 Park road, to live in
An household are people (can be 1) which take dissension together about the way they take economical dissensions alone ore jointly.
- Government
- Corporate household: enterprise, or other organisations
- Family household: The economic taken dissensions taken in a household, 1pers. Or more
1.2 Where does money come from
Money which you receive for which you don’t have to do anything, e.g. pocket money, is something different than money you earn because of you have worked for it.
Primary incomes are incomes earned in a production process, e.g. building a house. You can divide this up in the following parts:
- Wages deliverance of labour loon
- Profit entrepreneurship (ondernemerschap) winst
- Interest deliverance of capital = extra money rente
- Rent deliverance of nature huur
Added up all these things you get the national income of the Netherlands. Around 40% of the national income has been given to taxes and premiums. The other 60% is for yourself, these 60% are also called expenditure.
Some people also get benefits and subsidies from the government e.g. the A.O.W.. These benefits are called transfer incomes. And are for are people which aren’t working.
Benefits: sick,
disabled, old age
Subsidies: children, training etc.
1.3 Interest in Household
Ways of advertising:
- Door-to-to advertising also called unaddressed printing
- To address
- Postal code (composition of household)
- Marketing: selling product in the best possible way
- Direct marketing: marketing strategy go direct top customer
- Direct mail: addressed advertising via post
- Telemarketing
- E-mailmarketing
- Yes/no (or No/no) sticker against unaddressed printing
- Authorities: municipality/province/central government
- Authorities want to know data from people for e.g. national assistance benefit
- National assistance benefit Bijstandsuitkering
1.4 How do you spend your time
- CBS Central bureau of Statistics
1.5 Data and Graphs
- Circle graph always in %
- Legend what data is in graph
- Histogram in numbers (no.)
1.6 Data and Tables
1.7 Dealing with information
1.8 Choice between work and housekeeping
- Full jobs
- Part-time jobs
- Glass ceiling with high jobs for women
1.9 Dots, commas and calculations with big numbers
- Billion 1.000.000.000 (9)
- Million 1.000.000 (6)
- Thousand 1.000 (3)
- Way of writing dots and commas:
- EU € 1.000,50
- USA/EN $ 1,000.50
- (English way on test)
§ 2.1 – Pocket money what exactly is that?
- Pocket money = money you get from your parents/caretakers per week/month without doing something for it and you can spend in any way you want
§ 2.2 – Calculating is more than you think
A. Rounding off and calculating averages
- No. Rounded off to one decimal
- € rounded off to two decimal
B. Weighted and unweighted averages
- Unweighted averages all no. Count equally
- Weighted averages not all no. Count equally
C. Conversion of amounts
§ 2.3 – What do youngsters spend their money on?
- % = 100
- AEX = Amsterdam Exchange
BB 2.2 – Weighted average: the AEX index
What is a stock exchange index
- Stock exchange index: development of the many shares traded at a stock exchange
The price of shares
- Share: proof of ownership of a large company that is a NV
- You only can buy shares via the bank
- When you sell shares it goes back to the exchange, and will be sold to someone else.
- Every year you get a dividend (part of the profit of a company).
Determination of the index
- An index is only a real index if it gives a reliable impression of the trade on the exchange
The AEX index
- AEX indicates value of the 25 major companies
- Not every company has the same weight, large companies more than others
- Total value AEX weighted average of the value of the companies then divide by 100
- Index just an indicator of the whole exchange
3.1 – Expenses
- Housekeeping money = money
you spend every day/week,
e.g. food, pocket money
- Recurring expenses = certain
expenses that come back in a period,
e.g. membership, gas
- Reserve expenses = bigger
expenses, you hold for expenses which come one day
e.g. TV, repair etc.
- Saving = part
of your income which is left from the 3 above.
e.g. holiday
3.2 – Drawing up a budget
- Budget = overview, containing estimates of your income and expenditure
- Balanced budget = estimated income and expenditure are equal
- Deficit = if expenditure exceeds the income
- Always make budget for a certain period
- If period is lapsed you check your budget, so you can change budget after time
- Companies also make budget
- Saving
- Saving = not
3.3 – Saving, borrowing or buying on account
spending part of the income
goals: e.g. dvd player
- Interest
- Interest = interest is a compensation for the lending of money
- Reasons for getting interests:
- Bank can lend to others
- Compensation for inflation
- People want to have more interest than rate of inflation to make profit
- Interest margin = the difference between the interest you get and the people lending it from the bank
- Inflation = increase in prices (4 % per year)
- As compensation for the inflation you also get 4% interest
- Charing interest
- Height of interest is indication with a certain rate
- Interest amount: able to calculate using interest rate
- If nothing further is said the interest rate is for 1 year
- Interest in only payed for the actually amount in the account. If you withdraw/ deposit money interest is only paid out the no. Of months that the money was on the account
- The count of interest start over every year again (so the interest of last year is taken up into it)
- Borrowing:
- Repayment = paying back the money you lend
- If nothing further is said the interest rate is for 1 year
- Interest is charged for the amount that isn’t payed back yet.
- Annuity = 1 fixed amount that has to be paid every month (+: easy for budget, -: interest amount not clear
- To calculate the debt at the end of the year (ex. 18), you subtract the start debt from the repayment (not the annuity)
- Other forms of loan
- Source 22: loan table
- Loan amount: maximum amount you can borrow
- Term: no. Of months to repay
- Instalment: min. Amount you must repay (repayment + interest)
- Buying on account
- You can also buy things by a mail-order firm. You don’t have to pay back directly by after a while against a much higher rent
- Advantage in comparison to bank: the firm doesn’t look to your income
- Source 23: the buying account
- A = old amount
- P = percentage interest
- Y = no. Of years
4.1 Buying and paying
Transfer account |
Saving account |
Leave money on it that you don’t spend |
Leave money on it that you don’t spend |
No interest |
Receive interest |
Can use for payment |
Can’t use for payment |
Change money à coins/ banknotes (withdrawal) |
Modes of payment:
- Cash: pay with coins / notes
- Fund transfer: use form/internet to order bank for transfer from you to another
- PIN card: same as fund transfer
- Chipknip: withdraw form transfer account and put on chipknip. Small amounts
- Credit card: bank pays purchase for you. After 4 weeks it will we withdrawn from account
4.2 Consumption and needs
Consumption = purchase of goods/services by households to satisfy user’s needs. Moment of purchasing is registered, not moment of use.
- Primary needs: in order to stay alive
- Luxury needs: other needs
Investment = buying of goods by entrepreneurs for further production.
4.3 Sampling, choosing, buying
Consumer magazine show overview of products. E.g. Cosumentengids.
4.4 Do I decide for myself what I buy
What will be manufactured:
- Consumer’ sovereignty: decide what and how much
- Producers: can only buy what has been made
In real is a mixture:
- Market research:
- What do I need
- How do I differ from concurrent
- Target group: group for which the product is attractive
Marketing (4 Ps):
- Product quality
- Packaging
- Service / guaranty
- Appearance
- Quality
- Technical aspect
- Brand
- Price policy
- Does price cover costs + profit
- Do it set high price + high profit (people think: good quality)
- Do it set low price à sell more
- How high is elastically of demand of profit
- How high are competitors prices
- Place policy
- Where do I establish shop / factory
- Where do I place products in shop
- Promotion policy
- Ways to inform consumer
- Direct marketing
- Folders
- Computer
- Other promotion
- Merchandising
- Mass media (radio, newspaper, television) are important for marketing
- STER makes the commercial blocks for ned. 1,2,3.
- Most blocks are 30 sec.
- Hidden advertising = advertisements during e.g. a soap.
- Non-commercial advertisements are intended to change behaviour (Postbus 51)
- The wet misleidende reclame provides that advertisements can’t be misleading. The Nederlandse reclame code it there to protect minors.
- The reclame code comissie checks if all rules are followed.
4.5 Advertising on TV
4.6 Consequences of consumer behaviour
- Hallmarks are there to inform consumers about product quality. Examples are
- EKO (environment)
- KEMA (lamps)
- Max Havelaar (health)
- You also have, apart from consumers organisations, also the Goede waar (former: EKO), which is there for animal rights.
- Because of consumer power, raw materials get exhausted, pollution is formed etc. Some people think that they are important for the future of their children.
5.1 Working in employment or as a self-employed person
Work in employment: if
you work for someone else and you receive wages for it, written
down in a contract
5.2 Working as an entrepreneur
To start a business and become a entrepreneur, you have to think about a business plan, which you need to get money to start up. Without a business plan you won’t receive money from the bank.
A business plan consists of:
- Objective enterprise
- Rules and regulations
- Permits / licenses
- Market research (profit, future etc.)
- Financial planning. Estimation of...
- Turnover
- Purchase price (raw materials + supplies)
- Operation costs
Turnover |
Sales * selling price |
Cost of sale |
Sales * purchase price |
Gross profit |
Turnover – cost of sales |
Operating costs |
Rent + wages + etc. |
Net profit |
Gross profit – operating costs |
5.3 Profit and loss account & balance sheet
Balance sheet:
Assets (bezittingen) |
Liabilities (schulden) |
||
Resources |
10,000 |
Owners equity / shareholders |
5,000 |
Liquid assets |
20,000 |
6% Bank |
25,000 |
+ |
+ |
||
Total: |
30,000 |
30,000 |
Notes:
1. the balance sheet show assets and liabilities situation at a specific moment
2. Net profit (or loss) in a period be deducted from the change of owners equity
Owners equity:
- assets – liabilities, because:
- Owners are entitles to set profit
- Owners must make up for the losses of a company
- a liability to a person (owner ) who used his own money to start the business (when business stops, this money goes back to owner)
Costs:
- All sacrifices expressed in money to keep the business running (rents etc.)
- Costs connected to the depreciation (waardevermindering à afschrijvingen) of assets
- Costs connected to loan: interest
Notice: the purchase of assets, the contributes or repaying of loss may not be considered as costs (just change of form)
Profit and loss account:
Costs |
Revenues |
||
Cost of sale |
500 |
Turnover |
2200 |
Operating costs |
300 |
||
Wage costs |
250 |
||
Depreciation costs |
600 |
||
Interest costs |
350 |
||
Net profit |
200 |
||
+ |
+ |
||
Total: |
2200 |
2200 |
- Costs concerning deprecation (per period)
E.g. purchase price (3000) / use (6 years) = costs of deprecation (500)
- Costs concerning interest (per period), and only of remaining debt
- (net loss should be on revenue side)
Calculating net profit, end of the year:
- Difference in owners’ equity (balance sheet)
- Turnover – costs = net profit (profit and loss account)
Trading & production company:
- Trading company: net profit = gross profit – operating costs
- Goods purchased and sold without any processing
- Production company: profit = profit mark up calculation
- Service providing company + goods made by company itself
- Entrepreneur has to charge VAT (6% / 19%) and transfer to authorities
- VAT is never cost nor revenue
- Entrepreneur has to pay the difference between received and own payed VAT.
5.4 Value added tax (VAT)
- Price excl. VAT 100%
- Price incl. VAT 119 % (106%
- Calculations
- Excl. à incl. 150 * 1.19 = 178.5
- Incl. à excl. 178.5 / 1.19 = 150
- Excl. à VAT 178.5 / 1.19 * 0.19 = 28.5
- Incl. à VAT 150 * 0.19 = 28.
Ex.: 31, 13
§ 6.2 May youngster work?
- Trade unions (FNV) can be joined by workers from different sectors; they negotiate and look after the members.
- In the CAO (collective bargaining agreement), holidays, wage and travelling are arranged. The CAO is made by employers’ organisation and trade unions. For every sector different CAO’s are made.
- From the gross wage, other costs (such as wage tax and ZVW premium) are deducted. This makes the net wage.
- Government use the bracket-system: the more you earn the more wage tax you pay.
- From these taxes benefits for premiums are payed.
- If you work illegitimately, you don’t have to pay this. But you can be arrested, and don’t have a CAO or a trade union that can help you.
- Changes in a company are discussed in a works council (ondernemingsraad), this is obligated.
- At school, the codetermination council ( medezeggenschapraad) has the same task.
- They can have prior consultation (advice in important matters) and/or right of consent (say in certain things)
§ 6.3 Agreements in writing please
§ 6.4 Why so little?
§ 6.5 Speak up
§ 6.6 Insurances
You can cover risks by taking insurance, but you can also to precautions. E.g. with you pension, you shouldn’t look at it at 40, but at the time that you get a new job.
Private insurances
- Insurances of which you can choose to take them
- Principle of insurance = spread of risks
- Every month/year you a certain an amount (premium). If something happens you get a benefit back (from your build-up premium).
- The extent of the premium depends on: the value of houses, no. Of premium holders. The problem of high risk may occur as well.
Social insurances
(Group) Insurances that are obligated, the benefit are already decided.
Disease |
ZW |
No real insurance (no premiums), pay when ill for 2 years (after that plan has to be made) |
disability |
WIA |
+2 years disable, if not 100% disable jobs have to be sought |
unemployment |
WW |
benefit payed while searching jobs |
medical expenses |
Zvw |
against costs, medical car, GP and medicenes |
medical expenses |
AWBZ |
against prolonged nurse and care |
old age |
AOW |
benefit when 65+ (minimum) |
safety net |
WWB |
No real insurance (no premiums), last possible insurance if none other are possible |
children |
AKW |
No real insurance (no premiums), reduce for cost of children |
loss of parents |
ANW |
when parents die |
6.7.1 Cost allocation system and capital funding system
- Cost allocation system (government): estimated amount of premium payed(working pay 65+)
- Capital funding system (funds): saved amount payed out (pension fund)
Advan. |
Disadvan. |
|
Allocation |
Simple to organise Less administration |
Unfavourable division |
funding |
Certainty |
Bad investment |
6.7.2 The grey pressure
- Because of the changes in population, NL becomes greyer à more pensions payed
- Pensioners = certain
- Prosperity-linked: average income country (can buy more for benefits)
- Inflation proof: average price increase country (same amount)
- Make inflation-proof
- Rise age of start AOW
- More workers
- Fund creating
- Rich part 65+ have to contribute part
7.1 Supply and demand on a market
- Turnover = sales * selling price
- Sales = no. Of sold products
- Profit = turnover – costs
- The market is mainly influenced by private enterprises, but sometimes also by government
- Consumers: High price à less demand (and vice versa)
- Producers: low price à less supply
- In the end this leads to a equilibrium on a market
- Market = total demand and supply concerning the product/service
- Goods and services (commodities)
- Labour
- Money
- Currency
- In a model a simplified representation of reality is shown
- Market forms:
- Many suppliers: many with same product (homogeneous)
» No influence on price (auction), fruit
- Monopolistic: many with heterogeneous products (Brands)
» Each has own part on market, Nike
- Oligopoly: few suppliers
» Set own individual price, petrol market
- Monopoly: one supplier
» Sets own price, NS
7.2 The labour market
- The labour market is divided in different market sectors (a farmer can’t be a surgeon)
- Suppliers on market: job seekers for +12 hours a week
- Unemployed
- In employment
- Self-employed
- Together the working population
- Demand on market: (for +12 hours)
- Vacancies
- Demand for people in employment
- Demand for self-employed
- The employable population consist of everybody between 15 – 64 years
- The Labour participation rate is the % of the working population of the employable population
- All the above data can be collected in a flow chart.
- Definition for labour market:
- Paid labour
- +12 hours a week
- People in employable population
- Labour productivity:
- The extent of the national product depends on:
- Quantity of machines / buildings
- Raw materials
- Size of working population
- Quality
- Level of education
- Experience
- Technical development
- Higher ALP à lower labour costs à lower prices
- The number of employed persons is counted as employed persons (so 6 people, of which 2 work part-time) and working years(number of full-time jobs) (so 5 working years).
- Knowledge economy = indicates importance of knowledge in economy (developing and applying)
- NL, can compete at the moment on the market. Future more difficult, need following:
- Enough high educated persons
- Enough money for good research
- Is policy focussed on promising areas
- ALP compared to other countries
- This is shown in the level of productivity and the growth of the productivity
- If this is high you may conclude that the country has efficient production, which may attract other consumers.
- Understanding graphs/sources
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