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Bookmark or Share- Gross Profit Margin | Formula & Definition - InvestingAnswersGross profit margin is a measure of a company’s profitability, calculated as the gross profit as a percentage of revenue. Gross profit is the amount remaining after deducting the cost of goods sold (COGS) or direct costs of earning revenue from revenue. Note that the cost of goods sold is a measure of the direct costs required to produce a ...
- Command Economy | Definition & Examples - InvestingAnswersThe so-called “invisible hand” (or the self-regulating features of the market) drive supply and demand rather than government dictates. Examples of Capitalist Companies Consider companies like Apple and Amazon, both founded in the United States (a capitalist country).
- Invisible Hand | Definition & Example - InvestingAnswersThe definition of the invisible hand comes from the writings of economist and philosopher Adam Smith. In The Theory of Moral Sentiments, Smith discussed an unseen force that naturally guided the flow of a free and open market. These ideas were later expounded upon in Smith’s most important book, The Wealth of Nations.
- Free Market - InvestingAnswersHere, Smith outlined his Invisible Hand theory, which has since served as the cornerstone for laissez-faire economic philosophy. The Invisible Hand theory refers to the self-regulating nature of the marketplace. The idea was that individuals acting in their own self-interest would naturally determine how commodities were bought and sold.
- Capital Account Definition & Example - InvestingAnswersThe capital account essentially is the left-hand side of a country's balance sheet, because it measures all of the physical and financial assets the country owns. Capital accounts are an important part of national accounting, which is a method of calculating the economic activity of a country or region. The goal of the capital account and the ...
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