We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Macro-Economic Objectives and their Impact on Business Activity - Assignment Example

Comments (0)
This Paper aims to answer questions regarding the macro-economic issues faced by businesses that are new to the market…
Download full paper
Macro-Economic Objectives and their Impact on Business Activity
Read TextPreview

Extract of sample
Macro-Economic Objectives and their Impact on Business Activity

Download file to see previous pages... The RPI reflects a weighted average of price rises over the previous 12 months and as such it can be seen as the rate of inflation affecting the average household. (Jewell, 2007) Economists attribute inflation to one of the three causes; Excess demand in conditions of full employment, this is also known as demand pull inflation. Monetary inflation, which is the excess rise in the money supply A rise in the cost of production that is, in turn, passed on to the customers by firms enjoying some degree of monopoly power. This is cost push inflation. Inflation leads to a rise in prices, it has the effects of redistributing purchasing power. Businesses might suffer if their customers experience a decline in their real incomes. Moreover, if the inflation is one of costs rather than prices, profit margins will be squeezed. Conversely, inflation caused by access demand may lead to an increase in profits margin. One of the most damaging aspects of inflation from the business point of view is that it makes planning for the future difficult. Budgeting becomes difficult. Making provisions for expenses and purchases becomes difficult as prices tend to increase. (Jewell, 2000) The unemployed are defined in government statistics as those people seeking work who are unable to obtain a job. Unemployment can occur due to deficiency in demand; this could be cyclic, which is temporary during recession. Or it could be persistent which results from long-term deficiency. Technological advancement curb the need for manpower and this can also result in unemployment. Structural unemployment occurs when there is a change in the structure of demand leading to the decline of a major industry. Regional unemployment occurs when a major local industry declines leaving the workers of that area unemployed. Frictional unemployment results from the unemployment while job changing. Another form of unemployment is voluntary, which is the unwillingness to work at current rates of pay McEachern, 2008). In theory, a high level of unemployment should increase the reserves of labour available to business. Firms that are starting up would find labour easily. Furthermore, excess supplies of labour may also weaken the resolve of unions to demand high pay. These were the advantages of unemployment; however, it is possible for unemployment to coexist with shortages of particular types of labour or shortages in certain geographical regions. (Frank & Bernanke, 2001) Economic growth is basically an increase in the productive capacity of the economy or a rise in real national income per head. As it provides the means for achieving higher living standards for all, it opens up the prospects of reducing poverty without the necessity of income redistribution. Economic growth is beneficial to private sector firms. New market opportunities will be created in an expanding economy. This provides scope for emerging businesses as well as the expansion of existing ones. A growing economy is favorable for any business and especially the ones that are new. Economic growth is measured by the increase in the gross domestic product (GDP) of the country. GDP can be measured by the expenditure approach or by the income approach. (Wessels, 2006) International Trade and the Balance of Payments The balance of payments is a set of accounts recording details of a nations transaction with the rest of the world. The current account measures a country's trade in currently produced goods and ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
Thanks What is wrong with America’s labor market? Outline: I. Introduction (Part a, Article Summary) II. Why is the labor market weak? III. Is the problem primarily on the demand side or the supply side? IV. Would an active jobs policy help? V. The active policy VI.
6 Pages(1500 words)Essay
MIcro and Macro Economic Analysis
It is also a company that is listed in the stock exchange and has been performing quite well in recent years. The demand for petroleum products is mainly influenced by their prices and the growth rates being witnessed around the world. Many countries have achieved tremendous population growths and require to support their manufacturing industries that mainly depend on petroleum products.
5 Pages(1250 words)Assignment
The rate of unemployment in Germany has been around 5.4 percent by end of 2012. This is because the demand for labour is a derived demand and the low demand for German products from its 17 Euro countries. This is because of crisis in other parts of German markets such as Cyprus.
4 Pages(1000 words)Assignment
Macroeconomic Objectives of the UK Govenment Economic Policy
It is common knowledge, that macroeconomics is related to the big issues of the economy. It is the study of aggregate supply and aggregate demand. In order to achieve macroeconomic objectives, the government formulates certain policies. The policies designed by the UK government are primarily put into place to improve the working of the economy.
7 Pages(1750 words)Assignment
Macro economic
flation rate constantly within a narrow band will involve quite a bit of short-term variation of the interest rate lever (and, consequentially, the exchange rate), and policy will be jerking output around Central banks may regard their sole objective as inflation, but it seems
6 Pages(1500 words)Essay
Economic analysis construction
The UAE is currently going through rapid expansion, with the Emirati governments fuelling the growth by investing the proceeds of international
12 Pages(3000 words)Assignment
These pose great dangers not only to the economy but also to the social and political world. Unemployment is an important issue of macroeconomic issue. This is where majority of the people in a country have no jobs. Unemployment could either be voluntarily or
1 Pages(250 words)Assignment
emerge as a result of some research being conducted and thus, help form empirical assumptions, which determine how the future of the practice will be conducted. Practice, on the other hand, is the actual process of proving or disapproving theoretical assumptions in the real
2 Pages(500 words)Assignment
Investigating business
Set in five hundred acres of the Staffordshire Moorlands, it has a significant importance on the well- being of the surrounding area (Alton Towers n.d.). The company strives to create a high growth international family entertainment institution, which will be able to
6 Pages(1500 words)Assignment
Macro economics
It is even noted that inflation as well as deflation affects the overall economy of a nation and leads to adverse situations for a country. The increase and decrease of the value of money leads to adverse situations and has a huge
14 Pages(3500 words)Assignment
Let us find you another Assignment on topic Macro-Economic Objectives and their Impact on Business Activity for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us