...Running head: MACROECONOMIC IMPACT ON BUSINESS OPERATIONS Macroeconomic Impact on Business Operations Laurie Wilkinson University of Phoenix Macroeconomic Impact on Business Operations The Federal Reserve has the unique ability to control the money supply and stimulate the economy when needed. Any actions of the Federal Reserve can have an impact on macroeconomic factors and the balance in the economy. This paper will discuss the tools used to control the money supply, the effects of monetary policy on macroeconomic factors and the best way to achieve a balance in the combinations of monetary policy. The Federal Reserve has several tools available in order to control the money supply. The Reserve Ratio allows the Fed to raise or lower this ratio to affect the amount of money and ability a bank has to lend. The Open Market Operations is also available, where the Fed can buy or sell government bonds to the public and commercial banks. Depending on which they do this action can either increase the assets on hand or increase the reserves for the banks. Increasing the reserves allows banks to lend more. Finally, the Discount Rate is available to use. The Fed can make short term loans to banks, increasing the amount that the bank can lend out which in turn increases the money supply. If the bank increases the discount rate then banks will not want to borrow as much and it restricts the amount of money they have to lend. Monetary Policy can be looked at as a way the Federal Reserve...
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...Economic Factors & Legal Concerns Introduction The current business environment is an ever-changing and dynamic environment where most business operates. There are a number of factors that can have an impact on the operation of a business. These items are legal factors which can be an important factor that should be kept in mind while a business conducts its business activities. Another will be that of economics and the associated factors, these are considered the most important factor in all other external factors that affect the operation of a company or organization and will be at all levels which will include the local levels, and the state and national levels as well (Conklin, 2006). The economy is always going to be a concern that could affect organizations effectiveness. It is important for management to consider economic factors and legal concerns in conducting business operations. The economic factors are described as the factors that affect the financial issues of the businesses to include labor, taxes, interest rates, etc. The business environment entails both internal and external factors. The external will be the ones that are beyond the control of the business itself. The internal factors will be items that can be controlled by the business. Economic policies of government, capital market and business cycle are an important part of the economic environment of a business. The legal environment will include the laws and rules that regulate businesses...
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...and micro- economic factors and legal considerations Firms operate their business in climate of dynamic business environment and ongoing process, which is not steady due to many factors that influence their operational activities of business. The economics factors, and legal factors are among the very important factors that affect the economy as in the whole and the business in particular. To operate a business successfully in the dynamic environment and to follow the changes of the market, the broad of directors of ABC Complete Kitchens, Inc., should include economic and legal consideration in operations plan, to have reliable market conditions and avoid the product liability. However, the economic factors can be described as the external or internal factors that impact the financial status of the business such as labor costs, taxation, and interest rate etc. Where in the other hand, legal factors are the laws and rules that regulate the business to behave in the right way such organizational law, employment law, contract law, and securities law etc. This memorandum will describe and a will analyze the macro- and micro- economics factors that could directly or indirectly affect ABC Complete Kitchen, Inc. operations, including the legal considerations that should be considered by the management of the plant. Economic factors Macroeconomic factors Companies on their business operation are affected internally and externally. As firm faces the competition from the...
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...RUNNING HEAD: FUNDAMENTALS OF MACROECONOMICS 1 Fundamentals of Macroeconomics ECO/372 February 5, 2015 Samuel Imarhiagbe FUNDAMENTALS 2 Fundamentals of Macroeconomics Macroeconomics studies an economy at the aggregate level. It is concerned with the workings of the whole economy or large sectors of it. These sectors include government, business, and households. Macroeconomics deals with such issues as national economic output and growth, unemployment, recession, inflation, foreign trade, and monetary and fiscal policy (Koch, 2015). Macroeconomics is utilized when looking at the impact that activities such as purchasing groceries, massive employee layoffs and a decrease in taxes have on the government, households and businesses. Purchasing Groceries Grocery shopping is an activity that almost every household is expected to participate in. Approximately 15% of American income is spent on groceries; the smallest rise in prices can impact a family’s budget (Parker, 2011). Food prices are determined by several factors including, but not limited to, the economy, taxes, regulations and demand. If the demand for certain products is down or the economy is not doing well, the government may increase taxes on items, including groceries. If the price of groceries increases, consumers may be obligated to purchase a lesser amount of groceries or may begin purchasing a FUNDAMENTALS 3 lower quality of groceries from discount...
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...Introduction In this paper is analyzing the business idea of cousin Edgar to invest in four gas stations in U.S. After conducting researches and analyzing information, there are factors that Cousin Edgar might need to consider before the investment and start up the business. Firstly, the country’s economy health needs to be examined, whether the microeconomic factors, such as the level of demand in gasoline, monthly and a year and the factors that influencing supply of gasoline. Subsequently, macroeconomic factors determine the business idea in producing high profit, and also determining the business span in the short run or even in the long run. Macroeconomic analyzes in oil price According to The World Bank (2014) the total macroeconomic impact of the U.S. oil and natural gas industry is significant. Moreover, the industry was directly and indirectly responsible for over $1 trillion of value- added, or 7.7% of Gross Domestic Product (GDP). Essentially the estimation that the oil and natural gas industry’s total impact on labor income in 2009 was $534 billion (including benefits), which flow to 9.2 million Americans in jobs directly or indirectly in the industry or in jobs supported by those in the industry. In 2007, it is estimated that the industry directly and indirectly contributed approximately $280 billion of revenue to federal, state and local governments. The industry’s impact goes beyond the operations of the companies actively engaged in exploration and...
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...Fundamental of economics ECO372 week 2 Student’s Name Institutional attachment The purpose for this paper is to analyze the some of the macroeconomic scenarios that we always see or her in the business community. Firstly, we will look how the purchasing of groceries can have effect on the economy. Next, the paper will study how massive employ layoffs can cause ripple in the economy then lastly to examine the impact of decrease taxes. All these concepts will underline the fundamental importance of macroeconomic principle in the business society. Purchasing of groceries The demonstration of purchasing goods is impact by numerous elements in the business world. The sustenance we purchase from some foodstuffs were cultivated and transported in from a separation far from some staple goods. Each nation revels in distinctive benefits with regards to importation of produce from outside the nation along these lines making it more paramount to get to basic need item. At the point when a nation endeavors to create various sorts of goods items generally it would be less proficient and the cost and supplies would be influenced antagonistically. The interest of customers will dependably be high for some perishables items and the nation with high similar preference in the free global exchange will succeed. Gathering to extra layer to intricacy to buying staple goods is controlled by government. Government can force duty, amounts, administrative...
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... Interpreting Macroeconomic Conditions - Assignment 4 Managerial Economics and Globalization – ECO 550 Interpreting Macroeconomic Conditions 2 This assignment involves analyzing several indicators of the of the macroeconomic conditions in an economy, such as interest rates, income, and other indicators such as CPI, inventory levels, wage rates, consumer confidence, etc. Analyze these indicators and prepare a 3-4 page report explaining the expected short impact on firms in the following industries, retail business and automobile industries in terms of product sales and operating costs. I feel it would be better served to explain exactly what macroeconomics means. Macroeconomics evaluates or examines the overall performance of the economy as a whole and in this process we can determine what causes the economy to grow and how indicators such as interest rates, income, wage rates, employment and unemployment can affect the overall performance of our economy in its current state as well as forecast predictions for the future. This type of activity and performance is often measured through the GDP (Gross Domestic Product); the total value of all goods and services in the market. This information can be applied to any firm/business to evaluate how these changes impact their product sales and operating costs in the United States. If were to evaluate a local retail business in the Birmingham...
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...There are several business models how Microfinance institution (MFI) operates. Generally speaking, MFI provides micro loans or insurance to the poor to spur their self-reliant entrepreneurs. On one hand, micro loans give the low-income people an opportunity to discover full potential for developing their own business and to bring home the bacon. On the other hand, micro insurance helps the poor manage variety risks, such as health risk and property risks, and sustain the business development. How the micro insurance works is revealed in the path to restoration after severe storm hitting Haiti in June 2011. Fonkoze, the largest MFI in Haiti, collaborated with the Microinsurance Catastrophe Risk Organization (MiCRO) to provide natural disaster insurance coverage to its clients after heavy rainfall which caused damage in Haiti. The insurance helped the borrowers to pay back the outstanding debt, have access to another loan to rebuild their lives, and receive small compensation for loss of property. This example demonstrates the positive influence on viability of micro finance products to support a sustainable economic growth in developing countries. According to the 2009 MFI benchmarks provided by Microfinance Information Exchange (MIX)1, Latin American and the Caribbean (LAC) region has the largest FMIs number as well as yield on gross portfolio among four continents. (Figure 1) Even though microfinance has its long history, which can be traced back to the 1970s, and the...
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...Business Economics ABC Complete Kitchens, Inc. will look at the economic factors that may influence the plant’s operations and legal considerations. The organization will focus on the economic considerations before making any long term financial decision or any decision regarding the acquisition of capital. ABC Complete Kitchens Inc. will have a clearer picture as to how this can impact the operations of the new plant. ABC Complete Kitchens’ Inc. will examine two areas within economics, Macroeconomics’ and Microeconomics’ and some of their factors with a section on legal considerations. Macroeconomics The study of total effects of choices that individuals, businesses and governments make on the domestic and global economy . Macroeconomics is one of the most important elements of national policy and used as the foundation if any decision regarding taxation or monetary policy concerns. Decisions regarding the balance of payments and interest rates are related to the overall macroeconomics situation of the country. There are many factors used to described macroeconomics and here are a few; Gross Domestic Product, Unemployment Rates and Price Index. Gross Domestic Product (GDP) The GDP is the market value that recognizes the goods and services produced within a period of time, usually this is over a one year period. The GDP is used as an indicator within macroeconomics to show the country’s standard of living. If a country is showing increased improvement and growth...
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...AMITY INTERNATIONAL BUSINESS SCHOOL MBA (International Business) Course Title: Economic Analysis Programme Name: MBA (IB)/3C MBA Course Code: MIB 106 Semester: I Classroom contact hours: 40 hours Faculty: Prof. Ajit K Pandey Prof. Kshamta Chauhan Credit Units: 04 Prof. Harendra K Pandey Self Study hours: 80 hours Course Objective This course aims to integrate various principles and concepts from different fields of economics with typical problems of managerial decision-making and policy formulation in business organizations whether in a local or global context. Understanding the application of economic principles to key management decisions will provide guidance to increase value creation within organizations, and allows a better understanding of the external business environment in which organizations operate. Learning Outcomes At the end of this course the student will be able to • − Use the theory of the firm to model business organizations • − Apply demand theory to establish the elasticity of demand • − Use demand estimation to forecast demand trends and change • − Apply production theory to manage production • − Use cost theory to establish short and long run behavior • − Describe market structures to establish market equilibrium • − Use pricing strategies to enable organizational coherence • − Use macroeconomic principles to address market...
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...the broadest array of services of any financial-services provider (www.mheducation.com). With joint approval of the U.S. Treasury Department and the Federal Reserve Board the menu of services FHCs can offer may be expanded in the future. As the twenty-first century unfolded almost six hundred and fifty holding companies selling services in the United States, including both domestic and foreign-based firms, had qualified as FHCs (www.mheducation.com). While the numbers represent less than ten percent of all bank holding companies registered in the United States, the banking affiliates of FHCs account for more than ninety percent of the total assets of the U.S. banking industry. Many corporations get their initial exposure to international business when they begin to sell or...
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...JIT2 Task (A) Risk Management Register: Risk | Description | Owner | Source | Likelihood of Occurrence* | Severity of Impact* | Controllability* | Macroeconomics Risks | Economic downturn could pose risk to sales development. | Accounting Team/Sales Team | Poor economy, not enough jobs, people not purchasing as much | High | High | Low | Consumer Demand Risks | Not being able to respond to consumer wants/demands quickly enough, leading to short-term revenue loss | Marketing Team | Consumer interests change, other companies offer newer/better product | Medium | Medium | Medium | Industry Consolidation Risks (bargaining power) | Decreased bargaining power, price wars, inflated discounts, limited space within retailers | Sourcing, Pricing, Marketing and General Counsel Legal Teams | Market consolidation and strategic alliances | High | Medium | Medium | Political and Regulatory Risks | Trade policies | Government Relations Team/General Counsel Legal Team | Restrictions on importing and tariffs that disrupt free flow of goods | Medium | Medium | Low | Legal Risks | Patents and third-party trademark infringement- must be careful not to raise concern for risk when creating and marketing new products | General Counsel Legal Team | Many competitors in same business marketing similar products | Low | Medium | High | Product Counterfeiting and Imitation Risks | Other vendors stealing logos and designs and portraying their imitation products as original | Product Branding...
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...Business Sustainability: a business doing what is does while taking in the needs of it’s stakeholders. Stakeholder: anyone who has an interest and can be influenced by your company Primary Stakeholders: employees, customers, owners. Sustaining the availability and quality of resources into the future --Sustaining itself: manage in an efficient way; long term time horizon --always need human and natural capital Pillars of Sustainability: --Four Pillars -Cultural -Environmental Responsibility -Social Equity -Economic Health People, Planet, Profits but also Culture -Culture: traditions, way of living, values -5th dimension: Governance: how are decisions being made within a system. Economics (basic review) --Microeconomics (individual decision making) --Macroeconomics (aggregate decisions made by all; impact on broader economy. Functioning of the entire economy Economic Systems: -Traditional: localized region -Planned: socialism, communism -Market: capitalism -Mixed: capital/communist-individual decision making w/some control by the government. Macroeconomics and Sustainability ==Gross Domestic Output: the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, typically one year --GDP doesn’t measure: distribution equity, pollution, social factors, production efficiency Alternatives: --to try and capture elements the GDP doesn’t --Genuine Progress Indicator --GPI: adds to...
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...Introduction: Environmental analysis is useful technique that could contribute to strategic planning aimed at profitability and growth of a company. An organization’s external environment has three components: the remote environment (macroeconomic), the industry environment, and the operating environment (in the organization itself). The macroeconomic impact on business operations has many variables. Among the more significant of these variables include the gross domestic product (GDP), unemployment, inflation, and interest rates. This paper will study the impact of environmental factors on the computer industry in general, with focus on Dell as a specific example. Industry Analysis: The computer industry falls under the “durable goods” classification. Most people do not normally replace their computers for 3-5 years. The computer industry tries to get around this by adding new features etc., but the overall market in the US has slowed. The PC industry faces one of toughest competitions in the world. The PC is a technologically sophisticated product with a very small profit margin. Dell, Gateway, IBM, Compaq-HP, and Apple are the main contenders in this industry. Dell has been very proactive with just-in-time manufacturing to meet customer needs. What set these companies apart are their price and their reputation. Dells direct to consumers sales approach has increased their sales each year. Because of this approach, Dell has entered into this highly competitive...
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...Interest Rates and Agriculture Interest rates significantly impact agricultural markets in a number of ways. An interest rate is the cost of a loan, or the amount a lender will charge for a loan. In general, when interest rates are high, loans are more expensive, and when interest rates are low, loans are cheaper. As this analysis will demonstrate, interest rates are a macroeconomic factor that can have a significant impact on the microeconomics of agricultural businesses in three major areas of operations: cost of storing inventory, business investments, and general operating risk. First, the cost of storing inventory increases when interest rates increase. If instead of holding inventory, the inventory is sold, the income from that sale would lower the burden of increased interest rates on small businesses. Therefore, the opportunity cost of storing inventory increases when interest rates increase. Second, whether a business invests in land, machinery, or other resources is determined in part by interest rates. Investments are only made if the investor can expect to get a return on the investment that is higher than the costs associated with the interest rate. For agricultural businesses, which rely heavily on investments in land, the interest rate is a crucial consideration. Third, there is the general risk associated with interest rates that, if they rise, farm businesses might suddenly lose value, land investments might become more expensive than planned, or operating...
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