Macroeconomic Objectives and their impact on Business Activity
. Start with an introduction that briefly describes the key macroeconomic objectives of a country such as the UK and the business you have chosen to illustrate their impact. (LO1) The Key Macroeconomic Objectives of the UK are: Sustained Growth This is growth that does not negatively affect the poor, workers and the environment. It is economic growth that is just and fair and improves the likelihood of such growth in the future. Low Inflation This means that the continuous rise in the general price level, i.e. in the prices of all goods and services, drops to such a low level that it no longer influences the decisions of consumers and producers. High Level of Employment A situation in which all available labour resources are being used in the most economically efficient way. Full employment embodies the highest amount of skilled and unskilled labour that could be employed within an economy at any given time. The business I have chosen to illustrate the impact of UK macroeconomic objectives is ASDA. ASDA Stores Ltd is a British supermarket chain which retails food, clothing, toys and general merchandise. It also has a mobile telephone network, ASDA Mobile. I feel that ASDA is more than appropriate enough for me to illustrate the impact of key macroeconomics objectives of the UK as it provides a variety of different services and doesn't just focus on one area such as
IGCSE AND GCSE Economics Units 1 and 2 Notes - markets and the allocation of resources.
UNIT 1 – Basic Economic Problem: choice and the allocation of resources – Define the nature of the economic problem (finite resources and unlimited wants) * The resources we have (land, labour, capital and enterprise) are in limited quantities * However, the needs and wants we have are unlimited in nature * This leads to a scarcity of resources * So, all goods and services demanded cannot be produced, so there arises the need for choice since resources can be used in alternative ways 2 – Define the factors of production (land, labour, capital and enterprise) * Land – all the natural resources used in the production process, such as soil, farmland, coal, oil etc. * Labour – all human contribution, both mental and physical, to the production process, such as miner, mason, carpenter, clerk, accountant etc. * Capital – all the man-made resources that go into the production process, such as machinery, tools, vehicles etc. * Enterprise – the risk-taking ability of an entrepreneur who brings al the other factors of production together to produce goods and services 3 – Define opportunity cost and analyse particular circumstances to illustrate the concept * Opportunity cost is the next-best alternative foregone when a choice is made * If one chooses to do ABC with a resource (s)he cannot do DEF with it * Time/money is scarce in day-to-day life * Buying
The Social Balance - The Mixed Economy.
The Social Balance The Mixed Economy We have looked at the inherent limitations and defects of the unregulated market mechanism of the extreme laissez-faire capitalist economy. Such an economy had a high potential for achieving freedom and efficiency but at the cost of considerable inequality. Moreover, in the absence of government intervention the freedom includes freedom to starve and the efficiency is only imperfectly realised - for example, no allowance is made for divergencies between social and private cost. At the opposite extreme, the socialist command economy has a potential for reducing inequality, but at the cost of loss of freedom and inefficiency, and, in practice, the potential for quality is not necessarily realised. Thus, the course of wisdom would point to some sort of mixture of the two. There is a sense in which all economies are mixed economies because neither the capitalist laissez-faire economy not the socialist command economy exists in their pure form. But some economies approximate fairly closely to the extremes and it seems most useful to restrict the term 'mixed economy' to those where the private and the public sectors are both substantial and neither is overpowered or undermined by the other. The development of the public sector in the United Kingdom during the nineteenth and twentieth centuries was a move from an economy approximating to the
Changes in the business environment and their impacts on business strategies.
CHANGES IN THE BUSINESS ENVIRONMENT AND THEIR IMPACTS ON BUSINESS STRATEGIES. INTRODUCTION The external environment of a business involves all those issues which are currently important in the world in which the business operates. The external environment of a business affects all its decision. Changes in the business environment of businesses create both opportunities and constraints for the business. They stem from various sources including economic, social, technological, legal and political factors. Different firms will be affected by different factors, but all will be subject to economic changes. Markets and customers are volatile too. Markets are affected as much by fashion and fad as by economics. Customers are increasingly demanding, ever more fickle, and their loyalty to products and brands is harder to win, and then is more temporary than in the past. A host of external factor's act on markets can affect customers' willingness to buy. These include: economic factors and what customers can afford, political factors and how markets are allowed to operate, social factors affecting how people live and therefore what their needs are, technological factors such as the rise of information technology, and environmental factors that may affect choice and regulation. All these things are dynamic-witness to the pace of change in the area of computers and technology
The un-utopian issue
The un-utopian issue By: Maximiliano Velasco Class: 12C (RNo) Subject: High Economics (Mr. Watts) Foreword What is economics? Why do we humans spend countless hours, studying, evaluating and observing the market and all its aspects? Is it to earn profit? To obtain power? To control scarcity? Now, here is an interesting issue: scarcity. Most economists and sources would agree that the sole purpose of economics is to allocate the available resources so that they may be turned into secondary or tertiary products for the consuming of the general public. However, is all economics perfect? Until now, the answer to that seems to be "no", and a major issue in economics is scarcity management. Scarcity can be defined as: "when the supply of a particular good or service can't meet with the expectations of rising demand, thus resulting in the good or service to be 'scarce', hence the term scarcity". Now, ALL economies suffer scarcity the whole time; there will always be a good or service too heavily demanded that only a limited amount can be supplied. This leads us to the question: what do the different economic systems try to do to cope with this key problem? That's what we'll review in this essay, while noting the challenges the different economics theories face when trying to develop a solution. Part 1 How do free, planned, traditional and mixed economic systems address the
Transaction Cost Theory
Transaction Cost Theory Rights of ownership (or property rights) to a good or service must be able to be established before a market for that good or service can exist. In an, as yet, relatively clean-air world, for example, property rights over breathable air can not be established and no market in this good exists. Transaction costs "are those incurred in enforcing property rights, locating trading partners, and actually carrying out the transaction" (Hyman, 1992, p.134). If property rights over a good cannot be established, then transaction cost theory is inapropriate. Work incorporating transaction cost theory has been applied to such issues as the absorption of risk in subcontracting by the Japanese car industry (Asanuma and Kikutani, 1992), problems in the transformation of institutions in the post-Communist period in eastern Europe (Iwanek, 1992; Williamson, 1992) and the design of policies to encourage research and development (R&D) given the problems related to the low appropriability of the results of R&D (Itoh et al, 1991). Originally a rather narrow, minority-interest specialism within IO, the work of Coase and his followers has thus clearly become in recent years a major concern of the discipline. In the title of his speech on receipt of the 1991 Nobel Prize for Economics, Coase called this work "The Institutional Structure of Production" (1992). In this
Evaluate the impact of Nike's outsourcing strategy and factory location on the host nation
Evaluate the impact of Nike's outsourcing strategy and factory location on the host nation Introduction Nike is a multinational corporation, which has outsourced many parts of its supply chain such as production of sportswear, to developing countries. The aim of this assignment is to assess the impact of Nikes operation in these countries to identify what benefits and disadvantages Nikes operations bring to the host nation. Secondary research will be conducted to identify Nikes Multinational operations, which countries are involved in the process of outsourcing and the impact they have. After the research has been analysed a conclusion will be drawn to whether the impact of Nikes outsourcing strategy will benefit the countries Nike operates in. Analysis and knowledge A multinational corporation such as Nike can be described as firms that have productive capacity in several countries. Before evaluating the impact of Nikes operations in particular on the host nations it is necessary to look in general at the possible effects of multinational operations in host countries. There are many potential benefits to host nations of multinational operations in there country, which include the spread of wealth, work, technological growth, raised standards of living; which will be discussed below. One possible benefit multinational operations may bring to the host country is skills
The Study of Japan's Recessions and Booms: An Analysis of Japan's GDP for the Last 20 Years.
The Study of Japan's Recessions and Booms: An Analysis of Japan's GDP for the Last 20 Years By Dillon Casey: 110124534 Over the last twenty years, Japan has experienced the extremes of both sides of economic growth. Before and during the eighties, its economy had become the envy of world superpowers as its consumption-led nation experienced growth never before thought possible. Japan was a world leader in exporting, and in the eighties was at the forefront of technological innovation. It had experienced small recessions, but always bounced back stronger than ever. However, in the early 1990's, the seemingly invincible economy experienced a complete downturn as it fell catastrophically into a recession it has yet to escape. What fundamentally defines these booms and recessions is an important economic variable known as the gross domestic product (GDP). This paper will use basic economic theory, including IS-LM analysis along with some Growth Theory to determine the economic reasons for these fluctuations in the growth rate of Japan's real GDP from 1983 to 2002. The gross domestic product, or GDP, is the value of the total output actually produced in the whole economy over some period. Nominal GDP is the total dollar value of that output, while real GDP is the nominal GDP divided by the economy's price level, and will therefore equal the output that year. This
How have interest rates changed over the last thirty years? What affects have these had on the economy and why?
. 2. How have interest rates changed over the last thirty years? What affects have these had on the economy and why? Contents . INTRODUCTION 2 2. BACKGROUND 3 WHAT IS THE INTEREST RATE 3 WHAT IS THE AIM OF THE INTEREST RATE 3 Monetary policy 3 This is the transmission mechanism - or the economic route map between changing interest rates and inflation 4 3. THE ECONOMICS OF INTEREST RATES 5 WHY DOES A CHANGE IN THE INTEREST RATES AFFECT THE ECONOMY? 5 HOW INTEREST RATES AFFECT AGGREGATE DEMAND? 5 A FEW OF THE AFFECTS THAT INTEREST RATES HAS ON THE ECONOMY 7 Housing Rates 7 Credit Card and Loan Rates 8 Spending and saving 8 Marginal efficiency of capital 9 Exchange rates 9 Balance of Payments 9 HOW INTEREST RATES AFFECT ECONOMIC INDICATORS 11 GDP 11 INFLATION 12 ECONOMIC GROWTH AND JOBS 14 UNEMPLOYMENT 15 PHILLIPS CURVE 17 Graphs to show the idea of the Phillips curve 17 4. SUMMARY AND CONCLUSION 19 5. HOW THE CENTRAL BANK CAN CHANGE INTEREST RATES 21 IS CURVE 21 LM CURVE 22 6. BIBLIOGRAPHY 23 3. Introduction In this investigation I will set out to answer these two questions. How have interest rates changed over the last ten years? What affects have these changes had on the economy? I will answer these questions by comparing changes in interest rates to changes in economic variables like inflation, unemployment and exchange rates. I will then
Has Japan really benefitted economically as a result of the World Cup 2002?
Bill Bradbury Q. Has Japan really benefitted economically as a result of the World Cup 2002? Introduction From the 31st of May until June 30th, Japan & Korea hosted the World Cup in which 32 teams competed to be crowned football champions of the world. Many thousands of people watched the matches live and hundreds of millions worldwide watched on T.V. The World Cup has been the most popular sporting event ever since the 1930s when Uruguay hosted and won the first ever World Cup. Since then the World Cup has been hosted every four year in different countries apart from during World War 2 and there have been 17 World Cups. Since the 30s football has became the world's most popular sport and with the introduction of commercial air flight, motorcars and the global T.V network it has become an important source of revenue. In 1994 the World Cup was hosted in the USA and a record 3,587,530 people watched it live. Since the 1986 World Cup held in Mexico the total attendance had begun to rise to over 2 million live viewers a World Cup. This would result in host countries gaining massive revenue from ticket sales and money received from the T.V companies broadcasting the match. The rights for broadcasting the 2002 World Cup were bought for £622 million by Kirchmedia showing just how valuable World Cup football is. Also a study by HSBC securities in 1998 showed that countries
