Economywatch.com describes Brazil's economy as a free market that is "organized along capitalist lines." Beginning in 2006, Brazil's economy became the largest in South America and ninth largest in the world as measured by purchasing power parity (PPP).
Manufacturing, particularly cars, aircraft, petrochemicals and construction, has historically been a key industry that helped to spur economic growth and accounted for almost three-quarters of the country's exports. Other key industries included textiles, food and beverage and consumer durables, and mining is also critical to the economy. The country also moved into the energy sector in an effort to reduce its dependence on imported oil. After severe bouts of inflation in the 1980s, President Cardoso attempted to revamp the economy, shifting more emphasis on foreign investment and private enterprise while public spending focused more on health, education and other public services.
The economy seemed to blossom fully in 2010 as the middle classes expanded significantly, and Cardoso's dream of foreign investment came true. Unfortunately, the growth did not appear sustainable as the government was unprepared to support the needs of the ever-growing middle class, and foreign investment leveled off.Learn More
The formula for the market value of debt is E((1-(1/(1 + R)^Y))/R) + T/(1 + R)^Y, where E is the annual interest expense, R is the cost of debt, T is the total debt and Y is the average maturity, in years, of the debt. However, calculating the market value of debt can be tricky, because not many firms carry their debt in bond form.Full Answer >
An example of the way a market economy works is how new technology is priced very high when it is first available for purchase, but the price goes down when more of that technology becomes available. This kind of price fluctuation is a central component of a market economy. That is, supply and demand dictates prices.Full Answer >
Economics and economic education are important for providing people with valuable insight into how foreign and domestic markets operate, which allows them to make reasoned and rational choices for short-term and long-term financial benefits. Studying economics also allows people to learn how to manage and most effectively use scare and finite resources such as time and money. Studying economics equips people with varying levels of financial literacy, which allows them to effectively manage their own finances and even advise others in financial management and planning, too.Full Answer >
According to the International Monetary Fund, inflation is an important economic statistic because it affects the value of money and indicates the overall stability of a country's economy. Inflation is a gradual continuous increase in the price of goods and services. A stable yearly inflation amount is typically between two and four percent, reports Economics Help.Full Answer >