Fiscal and Monetary Policy Effects on Economy

The assignment explores the effects of fiscal and monetary policies on the economy, highlighting their different approaches and objectives. Fiscal policy is shown to impact overall demand by changing government spending, while monetary policy directly affects interest rates and inflation. The analysis also touches on the relationship between fiscal and monetary policies, emphasizing their interdependence in achieving economic growth and development.

GLOBAL
BUSINESSS

Table of Contents
TASK 1............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
C)Emerging economic opportunities for global expansion for business with the example...1
CONCLUSION................................................................................................................................2
INTRODUCTION...........................................................................................................................3
D) Use of fiscal and monetary policies to stimulate economic activity and growth trickle down
economies...............................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

TASK 1
INTRODUCTION
Emerging economies are also known as emerging markets that are nations that invest more
and more in productive capacity. They mainly move away from their traditional economies that
mainly rely on export of raw materials and on agriculture. Leaders of these economies adapt a
mixed economy and free market in order to improve the quality of life of their people. Brazil,
China Egypt, India, Malaysia. Qatar, Poland, Taiwan and Turkey all are the major countries that
fall under the category of emerging economies. 7, 6.5, 5.3 is the real GDP growth rate of India,
China and Egypt respectively.
C)Emerging economic opportunities for global expansion for business with the example
An economy is defined as the system according to which trade of a country or region are
organised. It is the system of organization and institution which help in facilitating the
production and distribution of resources among the member of the society. Economies providing
opportunities to expand the business at global level.
E-Commerce opportunities: This is anything which involve the online transaction.
These e-commerce provides various benefits to business such as saving time, lower cost, wider
choice etc. This e-commerce can be divided into two parts that is E-financing and E-
merchandise. This helps the business to grow fast at the global level. For example :In Brazil ,
Brazilian spend its considerable amount of the time which provide some exciting opportunities
for the business in rapidly development market.
Investor -friendly initiatives: Investing in the business create the great opportunities for
the business to grow. When a nation is provider of friendly base investing initiatives this will
help the business to develop and grow. Investment from the other country create the wider
opportunities for the business(Shenkar, 2014). For example: in Brazil f investor is one of the
most amazing opportunity of is allow anyone in the partnership with the Brazilian company. As
well as interested in investing in an internet based businesses. And the opportunities to gain
permanent residence.
Well developed industry sector: In this economy provide well developed economic
from which business can initiate as developing growth. For example Russia has inherited most of
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the industrial bases of the soviet union. In Russia the most well developed sector are chemical ,
metallurgy and defence(Hillary, 2017).
Favourable tax structure :In this, nation set that policy which help in growth of the
business from which business can expand their businesses. For example, In Russia tax reforms
since year 2000 have reduced both individual and corporate tax budgetary. Russia has adopted
free trade agreements with the countries of the commonwealth of independent state.
It is very important for a nation to provide opportunities which helps the business to grow
at global level. In this when a business grow at global level then it is effective to improve the
economic level of the nation.
Two example of two countries and benefit from economy.
Ethiopia: In this the country Ethiopia get the benefits from there economy which help
businesses growth and the economy growth for example this country reach lower -middle
income status by 2025. An another example is is the government is developed agriculture and
economic development which help in the growth.
United kingdom: This is very effective in involving the increase integration and
independence. For example UK provide access to cheaper imports for consumer and household.
Provide the benefits from the de fusion of technology which is very effective in the growth of the
businesses
CONCLUSION
From the above mentioned report it can be concluded that economic opportunities help in
producing and distributing the resources throughout the world. With the help of E- commerce
opportunities, business are able to expand globally as fast pace. By a favourable tax structure
company can expand its operation overseas as this will promote free trade across the world.
Moreover, providing a friendly base investing initiatives creates opportunities for the company to
develop and grow their business.
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INTRODUCTION
Monetary and Fiscal policies play a great role in influencing the economy of nation. This
policies have a impact on the demand because they influence the spending of consumers on good
and services. Along with this it also influence the government spending on import and export as
well as on goods and services. In this study will discuss in deep about monetary and fiscal
policies and how do they affect the economy of a nation.
D) Use of fiscal and monetary policies to stimulate economic activity and growth trickle down
economies.
In this the monetary policy is define as the process in which monetary authority of the
country , typically the central bank or interest rate to ensure price stability and general trust in the
currency (Siewiorek, 2012).Through the fiscal policy government adjust its spending level and
the tax rate to monitor and influence the nation's economy. Monetary and fiscal policy both are
called as the sister strategy through which central bank influence nations money supply.
Fiscal policy : This policy is effective in adjusting the spending level and tax rate to
monitor and influence a nations economy. In Ethiopia fiscal policy refer to management of
government spending and taxes to stabilized domestic output, employment, and the price policy.
It is define as the policy tool of the government use to influence the level of composition as
public spending in economy(Hilton 2013This fiscal policy allow the policy makers to main two
economy variables which is tax and desire outcomes. In Ethiopia some fiscal actions are
implemented by the government such as budget process and take effective action at the time of
critical condition occurred in the economy. This fiscal policy also known as the Keynesian
economies. This theory basically states that governments which influence macroeconomic
productivity level by increasing or decreasing tax level and public spending.
At present it shows that the ruling party is removing revolutionary from revolutionary
democracy . This topic of fiscal policy move to centre stage in public that need to happen .
Monetary policy : This policy is analysed by the central bank to determine of the
optimal quantity of money stock(Savrul and Sener 2014). This monetary policy includes optimal
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stock or growth rate of money. This policy refers to bundle of action and regulatory stance taken
by the central bank in Ethiopia including all of the following factors:
 setting the lowest rate of interest rates on deposit or the re discount rate charged to
commercial bank borrowing reserves.
 Regulatory action to constrain commercial bank financial activity or to set lower capital
requirement.
It is well define that monetary policy play a important role in every nation . This policy
perform for an e economy. This policy work effectively in achieving goals which is largely
depend upon factors that are constrain implementation process of the policy.
Affect of fiscal and monetary policy:
fiscal policy has great impact on the economy. In this by changing demand in good and
services according to the need. In this affective tax rate gave greater impact to the country.
Monetary policy plays an important role in the performance of an economy. The
objective of the monetary policy of the national bank of Ethiopia is to maintain price &
exchange rate stability and support sustainable growth of Ethiopia. The monetary policy of
Ethiopia encourages the mobilisation of savings by investing them in productive activities for
further use.
Objective if Ethiopia monetary policy are:
motivate or encourage the mobilization of the domestic and foreign saving and their
efficient allocation for productive economy through they implementation of interest rate policy.
Fiscal and monetary , credit and financial condition and sustained economic growth and
development.
CONCLUSION
From the above study it can be concluded that fiscal policy affect the overall demand as
here the changes are made in the spending of government. This factors overall has a impact on
the consumer spending. Where as on the other hand monetary policies has a direct impact on the
interest as well as inflation rate. Impact on expansion of business and its export and import can
be seen with the change in the monetary policies.
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REFERENCES
Books and Journals
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Erasmu and et. al., 2016. Introduction to business management. Oxford University Press
Southern Africa.
Erasmus and et. al., 2016. Introduction to business management. Oxford University Press
Southern Africa.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences, 150,
pp.35-45.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Siewiorek and et. al., 2012. Learning leadership skills in a simulated business
environment. Computers & Education.58(1). pp.121-135.
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