Macro SLP Fiscal Policy: Government Expenditures and Revenues, Budget, National Debt - Essay Example

Dell Company Dell Company More than often, changes carried out by the government based on changes in the monetary policies affect the economic conditions that influence the financial positions of companies. As a leading premier provider of products and services worldwide, the influence of changes in monetary policies affects the company demand levels, liquidity stability, financial imbalances fluctuations even as Dell remain as the preferable entity to most customers (Bean, 2004). As a result, changes in monetary policy measures as a way of influencing the competitiveness of the financial position of the economy affects the company’s performance because of its influence on the systemic risk in all its complexity.

More considerably, the influences of price stability, liquidity management, and lean against imbalances as a measure of monetary policies affects the financial performance of Dell Company. In most cases, government use either expansionary or discretionary monetary policy that seeks to influence the economy operation by regulating the financial requirement levels, policy rates that influence price levels and changes in collateral policies, policy corridors and interest on reserves (Bean, 2004).

More significantly, the influences of fiscal policy against financial imbalances based on increased or reduced reserve requirement, policy rate, mop-up of liquidity and increased foreign exchange reserve buffers. As a result, the influences of the fiscal policy changes accompanied by greater uncertainties causes increased adverse effects on output of sales levels of Dell Company over the positive effects of stabilization on the price stability of the company’s products. As a company, dealing with sale of computers and information technology products the influences, which highly affect foreign exchange reserve buffers, it also causes uncertainty in the sales levels as revenue is lost through increased foreign exchange exposures.

More significantly, the operations levels of open foreign exchange positions and constraints increase the influence on foreign currency assets as the exchange levels experience increased system-wide currency mismatches as limits on exchange affect capital inflows in the company foreign exchange levels (Bean, 2004). In addition, the use of funds from financial institutions that offer collateral to Dell Company causes reduced cash inflows to regulate the operations and expansion levels as a means of liquidity management.

The increased application of monetary policy in impulse is also complicated by movements in financial market and increased developments based on influences of greater international linkages because of increased transmission of monetary policy. More so, contractionary monetary policy implementation by the Federal Reserve creates shocks in the company’s financial performance as it allows the foreign exchange rate to appreciate for a shorter period and thereafter, the exchange rate depreciates with time to its original level (Bean, 2004).

In addition, the financial position of Dell Company is more likely to be affected by the effects on interest rates, exchange rates movements, credit conditions, and asset-price related activities thus, the government regulation of the economy to improve the robustness of financial institutions to withstand both domestically and abroad shocks remain as a useful complement. In conclusion, the government should consider the effects of altering the monetary policy on the economy and independent institutions.

As a result, there need to allow for monetary policies that led to increased growth in the expansion and profitability levels of the organization, as most of the policy settings do not seek to increase the operation and profitability levels. More significantly, monetary policy formulation should consider the expected effects on company performances under different assumptions about shocks from internal and external including the size and type of different shocks.ReferenceBean, C. (2004), “Asset prices, financial instability, and monetary policy”, American Economic Review 94(2), p. 14-18.