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What is perfect competition?



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A definition of perfect competition is the situation of mercado in which companies do not have sufficient capacity to determine the price of the items they sell, so they cannot impose the rules of the game. What will determine the price will be the interaction between customers and companies, or buyers and sellers. In this … Read more

What does Recaudo mean?



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The term of collection is usually used when a good collection of some monetary resources or physical goods is made. That is, they are going to have good custody of them so that in the future an obligation is satisfied. The verb to collect is the action of gathering, piling up or making custody of … Read more

What are livestock assets?



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When we speak of community property, we are referring to the property that has been acquired by the spouses during their marriage. In this sense, the ownership of these assets is in equal parts, reducing the importance of who has contributed it. We must emphasize that, since the marriage exists legally and it has been … Read more

What is credit quality?



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The meaning of credit quality is properly the ability of an entity that issues debt to meet its future commitments. When evaluating credit quality, therefore, the probability of default of the obligations financial statements of the entity regarding the debt issued. This implies that the higher the credit quality, the lower the risk of default … Read more

What is the Phillips Curve?



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The Phillips Curve is a graphical representation used in macroeconomía to reflect the relationship between inflation and unemployment in a country. It is one of the most important links in calculating the economic and monetary prospects of a state's economy. Below, you will find all the information that you are interested in knowing about the … Read more

What is C2B or Consumer to Business?



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The acronym C2B, from the English expression 'Consumer to Business' could be translated into Spanish as 'consumer to business'. The meaning of C2B in the field of marketing refers to a business model in which citizens or consumers are the ones who create a value that companies will later consume. The client himself sets the … Read more

What is a company?



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A company comprises an organization or institution, created and formed by a person or group of people, which is dedicated to a specific economic activity to achieve objectives that later become benefits. In addition, to define what a company is, it is necessary to mention the products, goods and services that it offers to its … Read more

What is a check?



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We call check to the document used as a means of payment by which a person orders an entity to pay a certain amount to another (person or company). We find checks of different types: Personal check: issued against a person's checking account. The holders of these accounts will be given a personalized check book … Read more

What are consumer goods?



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The definition of consumer goods are those final goods in the production process of a economía. They are designed to directly meet the needs of people. There are several classes of economic goods depending on the role they play: Capital goods: used to produce other goods. Intermediate goods: through its transformation other goods are obtained. … Read more

What is the Consumer Confidence Index (CCI) and how is it calculated?



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The Consumer Confidence Index (ICC) is an economic indicator that is used to predict the consumption behavior of individuals belonging to a specific economic system. In other words, it makes it possible to study the reception that the private sector has in a country's economy.

Broadly speaking, the ICC responds to the need to know the current perception of consumers and their future expectations for the country's economy, its family economy and employment, approaching the intentions of spending of individuals

What is the consumer confidence indicator for?

Before developing the functions of this indicator, it is convenient to take into account that each country has its own measurement system, as is the case, for example, in the United States, where we find the Consumer Confidence Index of the Conference Board, or Spain, where there is the Consumer Confidence Index (ICC), developed by the Sociological Research Center (CIS) since 2004.

According to the CIS, the objective of the ICC is "to anticipate the behaviors of best before date of citizens ", so its constitution" is based mainly on questions about consumer perceptions both in relation to recent economic evolution (6 months), and with respect to its potential evolution in the immediate future (6 months) ".

Thus, the ICC is an indicator that allows studying concepts related to the consumption of goods and services, and their direct effect on the economy and production of a country, in such a way that it tries to forecast the expenditure that people plan to make in a period of time and a given economic environment. In short, the ICC analyzes people's consumption or their savings in the short or long term.

How the ICC is calculated in Spain

The Consumer Confidence Index in Spain is based on a monthly survey of questions related to the forecast of household expenses and the perception of individuals about their personal economic situation and that of the country. To calculate the ICC, it is necessary to find the arithmetic mean of two indicators: the Current Situation Indicator (ISA) and the Expectations Indicator (IE). Each of these two Indicators is calculated through three other sub-indicators:

Current status indicator (ISA) = [(P3 + 100) + (P7 + 100) + (P8 + 100)] / 3

  • To calculate this indicator, which refers to the assessment that consumers make of the current economic situation, the percentage of "best" responses minus the percentage of "worst" responses in the following questions is taken as a reference:
    • Do you consider that the current economic situation of your home is better or worse than six months ago?

    • Do you consider that the situation in Spain to find / improve a job is better or worse than six months ago?
    • Do you consider that the current situation of the Spanish economy is better worse than six months ago?

Expectation Indicator (IE) = [(P9 + 100) + (P12 + 100) + (P14 + 100)] / 3

  • To find this indicator, which reflects the economic situation expected by consumers for six months from now, the percentage of "best" responses minus the percentage of "worst" responses to the questions posed is taken as a reference:
    • Do you consider that the situation in Spain to find / improve a job in six months will be better or worse than it is today?
    • Do you think that the situation in your home in six months will be better or worse than it is today?
    • Do you think that the situation of the Spanish economy in six months will be better or worse than the current one?

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