--%>

Correlate each to the New Economy

Correlate each to the New Economy:

  1.  the rate of productivity growth
  2. information technology
  3.  increasing returns
  4.  network effects
  5. global competition

 

E

Expert

Verified

Each of the above is a feature of the New Economy.  The rate of productivity growth has risen substantially because of innovations using computers, microchips, new telecommunications devices and the Internet.  All innovations define features of what we call information technology that connects information in all of the parts of the world with information seekers.  New information products are frequently digital in nature and can be simply replicated once they have been building up.  The start-up cost of new technology and firms is high, however expanding production has a very low marginal cost that leads to economies of scale – firms’ output raise faster than their inputs.  Network influence refers to a kind of economy of scale whereby certain information products become more valuable to every user as the number of buyers grows.  For instance, a fax machine is more useful to you while lots of other people and firms have one; the similar is true for compatible word-processing programs.  Global competition is a feature of the New Economy since both transportation & communication can be accomplished at much lower cost & faster speed than previously that expands market possibilities for consumers and producers both who are not very restricted by national boundaries today.

   Related Questions in Finance Basics

  • Q : Define Accrual Basis of Accounting

    Accrual Basis of Accounting: The foundation of accounting in which transactions are identified whenever they take place, regardless of when cash is disbursed or received. The revenue is recorded whenever earned, and expenses are recor

  • Q : Explain agents and their

    Normal 0 false false

  • Q : Why do focusing on cash flows rather

    Why do we focus on cash flows rather than profits while evaluating proposed capital budgeting projects? We targeted on cash flows instead of profits while evaluating proposed capital budgeting projects since it is cash flow that changes the valu

  • Q : Can a company hold a default rate on

    Can a company hold a default rate on its accounts receivable that is too low? Describe. A company could hold a default rate on AR which would be considered too low if by liberalizing credit terms a significant rise in sales revenue and cash inf

  • Q : Growth rate of its real GDP Normal 0

    Normal 0 false false

  • Q : Change in supply of money Normal 0

    Normal 0 false false

  • Q : Describe accumulated depreciation

    Describe accumulated depreciation?Depreciation is the allocation of an asset's primary cost over time. Accumulated depreciation is the sum of all the depreciation cost that has been identified to date.

  • Q : Describe the risk-return relationship

    Describe the risk-return relationship.The relationship among risk and required rate of return is term as the risk–return relationship.  This is a positive relationship since the more risk assumed, the higher the required rate of retur

  • Q : Describe EU Normal 0 false false false

    Normal 0 false false

  • Q : How cash and capital budget relate to

    Describe how the cash budget and the capital budget associate to proforma financial statements.The cash budget illustrates the projected flow of cash in and out of the firm for particular time periods. The capital budget illustrates planned expe