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Global Business Context - Essay Example

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Macroeconomics deals with the worldwide inflow and outflow of basic goods and services. It is involves many macroeconomic variables like inflation. The following paragraphs explain how these major macroeconomic variables change over the course of a business life. …
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Global Business Context
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Download file to see previous pages This essay declare that principal macroeconomic variables and government policy instruments change in response to external factors over the course of a business. For example to curve the influx of imported items that will cut a big portion of the local industries’ customer base, the government can increase taxes of imports of certain types of imports. To combat inflation, the government can order the banks to release plenty of money into the economy. In order to make the factory workers happy, the state pass a law ordering all companies to increase the basic salary.
This paper stresses that the Gross Domestic Product, the inflation rate and the unemployment rate are the three major, widely cited and watched macroeconomic variables of economic activity. And, gross domestic products will take into account all the production inside a country, independent of who, domestic or foreign, owns the production site. What is important is that the production takes place inside the territorial boundaries of the U.S. Most wages increase when business profits and prices of basic necessities like food, clothing and shelter increase. Shifts in labor market that can create unemployment or the reverse which is increased employment in some sectors of industry. The shifts in public policies affecting labor demand (such as minimum wage, worker safety, and even foreign trade legislation) can create shifts in the unemployment rate. ...
And, gross domestic products will take into account all the production inside a country, independent of who, domestic or foreign, owns the production site. What is important is that the production takes place inside the territorial boundaries of the U.S.
Also, most wages increase when business profits and prices of basic necessities like food, clothing and shelter increase. Shifts in labor market that can create unemployment or the reverse which is increased employment in some sectors of industry. Also, a few of these shifts are attributable changes in GDP are caused by changes in aggregate demand or aggregate supply, or both. Additionally, the shifts in public policies affecting labor demand (such as minimum wage, worker safety, and even foreign trade legislation) can create shifts in the unemployment rate.
Further, increases in foreign currency exchange rates favor the exporter in times of increase but favor the buyer when prices of goods and commodities decrease. The unemployment rate decreases when there is an increase in company profits. Unemployment rate had decreased to its lowest term from 17.2 percent in 1986. This according to the Northern Ireland Yearbook, 2005.
Furthermore, inflation increases every year forcing business to increase the priceof its products. Inflation in an economy can be the result of an increase in aggregate demand that is not accompanied by an increase in aggregate supply. Clearly, this is known as demand-pull inflation. Further, a rise in any component of aggregate demand can produce demand-pull inflation. One reason for a sudden, unanticipated rise in aggregate demand can be an the unexpected rise in the supply of money. For ...Download file to see next pages Read More
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