Role of Stock Market in Investment

This article discusses the role of stock market in investment and its functions in raising capital and servicing investors. It explains the primary capital market and its importance in funding businesses.

Business Management
and Macro-Economic
policy.

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Illustrate about the economic issues and its impact on business environment.......................1
Discuss about Monetary Policy along with its benefits and impacts.....................................2
Understanding about fiscal policy focusing on taxation and its macro economics effects
social and safety benefits........................................................................................................4
Explain about the role of various primary and secondary capital market such as stock market
in investment..........................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The description of business management is define discipline of proper coordination among all
faces to watch business operation on the behalf of systematic planning (Dana and et. al., 2021). It
is concerned with income as well as profitability along with it instruct about how to manage the
business in terms of financially and non financially factors. The main objective of business
management system is to provide proper guidance a letter to management and their tools for
monitoring planning and controlling activities mapping the performance of employees as well as
business productivity. Also contribute to affect constant process of improvement within the
company.
Macroeconomics the branch of economics that having detail study about overall
economy of within the market or other system to operate within a large scale. In studies related
of macroeconomics it related to inflation recession supply and demand better economic growth
national income GDP and related to employment or unemployment. It usually deals with
performance structure and behaviour of overall economy and represent in a graphical or
statistical data. Macroeconomic mainly focus on the choices made to individual people economy
on the basis of their income product choices and other factors. Macroeconomic policy States
about aggregate economy promote the Macro goal of full employment stability and growth in
regards of better sustainable economy (Alharahsheh, and Pius., 2021.). In this report, topics are
highlighted economic principles factor and affect the business environment. An proper
understanding of how monetary policy affect the real economy. And how fiscal policy affect the
real economy. .
MAIN BODY
Illustrate about the economic issues and its impact on business environment.
Economic issues are rated with the specific country problems such as inflation recession
unemployment scarcity e of psychological needs. The economic problem exist because all to the
needs and wants of people are endless even though resources which are available are also
Limited range that satisfied economy needs. Through business want to maximize their profit as
well as Goodwill in competitive market but due to uncertainty or falling of economic supply and
demand. It enhance the effective provision of appropriate supply that provide maintenance of
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high quality of products and services. In following some economic issues impact are elaborate on
the basis of business environment:
Inflation: It usually occurs when the supply of money exceeds economic environment market as
is not equally supported by availability of goods and services. If the prices of goods are
increasing in one way to another in that situation business need to sustain (Naumova. and
Tyugin., 2021). If there is an increase in the cause raw material needed for production to
infection productive product and services. The power of consumer buying decreases on the basis
of their income or the prices get exceeded of product and services in market. This will definitely
affect the business in terms of their growth and profitability as a director depend on product
prices.
Recession: This arises at the time of company e during make a great losses and phase difference
sales and profit. In this to reduce the cost of their product many companies usually lay off their
staff enhanced attachment for firing along with reducing capital expenditure advertising budget
research and development activities. It is obvious that these all factors can affect the company in
terms of their sizes regardless of the economic environment which they are currently work.
Government Polices: To government policies economic issues can arise when economic
condition of the inform the policy changes that government elect to enact. Majorly every
government use to change their policy year to year on which business management cannot
properly cope with that particular strategy sustain in market (Thomas and dSmith,., 2021). For
example in UK a day as a political factor which is stable in terms of foreign exchange fiscal
policies and so on. But it there is one negative factor which is Brexit market emphasized that to
not trade any UK based company within European region.
Economic growth and development: This depend upon which is being invested through
channels for long-term upgradation and finances of people living in society. The overall
economic factor which are affecting the business development is most priority one. As a business
need to demand of economic environment sport and Society. Luxury brands usually perform
upswing the market it is essential to offering a customer that enhance the economy growth as
well.
Discuss about Monetary Policy along with its benefits and impacts..
Monetary policy describe the demand side of economic policy that refers reaction and taken
through Central Bank control the money supply and accomplish macroeconomic objectives
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better promote sustainable economic growth. Monetary policy consists to management of money
supply and interest rate but having objective to controlling inflation consumption growth and
liquidity (Cartwright., Davies and Archer-Brown., 2021). This is accomplished by actions such
as modified by interest rate buying or selling Government Bonds regulating foreign exchange
rates and changing the money amount back to required to maintain as reserve. As per monetary
policy is formulated on input gather to off sources such as macroeconomic number and gross
domestic product figures. Further more monetary policy in developing country is mainly
determined to forecast economic growth why stabilizing prices. To incorporate stability they
generally considered essential factors to keep the growth of money supply with demand
accordingly.
Monetary policy works in UK Economy:
 UK monetary policy set a structure of monetary policy committee from the bank of
England.
 This committee are independent in setting interest rate but they have to try for attain
government regulation target to reduce the uncertainty from economic.
 The bank of England said the base rate which is comprise the commercial bank borrow
from Bank of England.
 Changing the base rate tends to influence or inflation rates in the economy true saving
rates to mortgage and lending rates.
Importance of Monetary Policy:
In the scenario of economic stabilize through which government and venture usually focus on
major objective of economy to focus 50 productivity more supply and demand employment rate.
Monetary policy is concerned with changing the supply of money stock's and rate of interest with
the objective of stabilizing the better economy (Anker., 2021). To focus on overall employment
better output level that influence for aggregate demand.. It is important to having a stabilization
of economy at the time of crisis of arises on which government form certain rules and regulation
in which companies as well as economy get affected. For example in recent days the pandemic
situation arises as there was a global lockdown in which many
companies were get decline in their growth. Due to coronavirus many government regulation
especially UK economy has highly impacted where many people losing their jobs market was
going down etc. Product the government has to take certain steps in their policies such as
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physical policy and monetary policy to focus in this policies because it emphasizes to stabilize
the better economy.
Impact of Monetary Policy in UK Economy:
 Liquidity trap it occurs when interest rapes detect fail to stimulate economic activity for
example because of low confidence or Bank don't want to pass base rate cut on
customers.
 Difficult to control many-objective with one tool. The situation can be arise on a different
situation basis for example rise in oil prices cause of cost push inflation and enhance
growth level decreases. The bank will increase interest rate to reduce inflation but it will
cause economic growth to fall due to many reasons such as a unemployment recession
inflation and so on.
 In changing of interest rate indirect impacts on exchange rate. As per strict monetary
policy causes and appreciation to exchange rate which will make export less competitive
causes.
 True interest rate may affect some part of the economy more than others for example
having high interest rate. This can increase the disposal income of people with savings on
which economic and grow healthy productivity outcomes (Forliano, De Bernardi, Pand
Yahiaoui., 2021). Such as employment more business opportunities and increasing of
Gross Domestic product. It could cause homeowners to be unable to afford their
mortgages.
Understanding about fiscal policy focusing on taxation and its macro economics effects social
and safety benefits.
Fiscal policy define about common 19 or control its pending level as well as tax rates to monitor
and influence specific economic performance. It is a kind of relation with monetary policy where
it controls true Central Bank influences nation money supply. These two policies are essential
and valuable for economic growth as it is used in various combination to direct a country
economic goes for accomplished. The process of physical topology acid is based theories of
British economist John Maynard. This theory based States about the government to influence
from macroeconomic productivity level as increasing or decreasing the tax level on behalf of
spending by public. It takes you turn when the influence in hands inflation and deflation to
consider for healthy economy when between 2% and 3%. Physical policy of divide II its like
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increasing employment maintain a healthy value of money which intricate economic growth
honour better way. As physical policy plays an important role to managing countries economy.
For example as in covid-19 situation UK and rest of the world were facing high rate of inflation
and reception through horrible condition within economy full stop there was a high scarcity of
jobs food and supply and other resources on which overall economy word suffered and
government need to take certain steps to recover their losses.
Benefits of Fiscal policy:
 Control inflation: As fiscal policy help to facing high inflation causes in economic within
country. The meaning of inflation consist about increasing of pricing of product and
services within effective goods and services for better improvement off money
(Bratianu,., Stanescu, and Mocanu, 2021). In time of inflation when customer use to
compromise with their product and service for buy in higher prices, on that particular
situation government used fiscal policy and reduce the inflation at least the prices which
are increasing within market and economy. On popular strategy to face off inflation
where government provide more resource to the economy. Through government they
usually accomplish this buying government securities such as better bonds through
increasing cash flows.
 Predict mistakes: Government official and economics project upcoming crisis which
occurs in a impact of economy. Through overtime set the physical policy or regulation to
meet those emission of those criteria which helps to overcome from the particular crisis
bus stop however if the false assumptions can mean that the policy will basically had the
economy rather than it it provide guidance to maintain the stabilize growth.
 Stimulus the economy in which government might use its physical policy for boosting
the demand within the market on which customer can buy on affordable prices.
Aggregate demand driver's overall demand for product and service across towards
certain specific country. This process of demand can be increased in alternate ways such
as cutting the indirect taxes and promote the lower range of prices along with writing
personal tax to create productive opportunities within economy and better disposable
income.
Impact of Fiscal Policy Affect:
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 The impact of fiscal policy are not the same for everyone as a depends on the political
background and goes of the policy makers what they are seeking for and what they is to
enhance provide the economy. Any serious crisis occurs with an economy the only group
will affect that middle class as a largest group of economy (Eichenbaum, Rebelo, and
Trabandt, 2020). As per the higher taxes announces Where are upper class easily e
contribute in the taxes but another hand middle class paid lower taxes because of their
income basis.
 Through above scenario, for government when they decide to adjust test pending and a
policy may affect only to the specific group of people stop a decision which undertake by
government can build a new bridges on new opportunities which can increase the income
to what hundred thousand of workers. Torso highlight on spending money on building a
new Space shutter for creating a better infrastructure that benefit to small businesses and
other low base workers by getting Employment opportunity effective manner.
Explain about the role of various primary and secondary capital market such as stock market in
investment.
In more normal times, capital markets assist fund enterprises and generate development,
development, jobs, and happiness in the UK economy. They broaden the breadth of financing
options for businesses, supplement consumer spending, and enhance the average amount of
money available to the economy.
Primary capital market: The main capital market is where a firm offers stocks and bonds
for the first time to the general public. Whenever customers take instruments on the main stock
exchange, the store that produces them employs an underwrite firm to assess them and develop a
documentation that outlines the pricing and other features of the instruments to be sold. Such as
stock market is part of the primary stock market and there are mentioned role of stock market:
 Raising capital: Stock markets are, first of all and primarily, financial organisations
designed to assist business owners in buying, selling, and trading shares in order to
provide cash to firms that really need it (Mohamed., 2020). Companies will be self
employed if stock exchanges didn't exist, and customers are at the whim of unregistered
and unsupervised financial goods with no control. Distinct financial phrases and notions
have emerged from the financial sector system, such as initial public offers, or IPOs, a
worldwide abbreviation for new firm stock launches.
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 Servicing investor: Other function of stock exchanges is to serve as a middleman for big
and small clients looking to make income far outside traditional financial institutions. A
stock exchange's job in an economy is to maximise the return on savings that otherwise
might stagnate in low-yielding checking accounts. Stock markets promised and
frequently provide larger returns, and in compensation, shareholders get certainty, a
variety of options, and freedom. Furthermore, a stock market provides shareholders with
confidence through official financial monitoring.
Secondary capital market: After a business has bought its issue on the main market,
equities are exchanged on the second hand market. It's also known as the stock exchange.
Secondary markets include the New York Stock Exchange (NYSE), London Stock Exchange
(LSE), and Nasdaq. Due to their exclusion from IPOs, fund managers have a considerably
greater likelihood of trading stocks in the underlying asset. Mostly on secondary market,
anybody can buy securities if they are ready to pay that price each unit. Role of bond market:
 Bond markets have traditionally been a secure and trustworthy responsible for long
fundraising for politicians and corporations throughout the world, acting as a method for
converting resources into real-world finance and so functioning as a viable option to bank
borrowing.
 The bond market funds offer a predictable, although nominal, flow of revenue. Buyers
get bimonthly interest charges in some situations; including Treasury bonds offered by
the national govt (Nelson , 2019). Bonds are popular in the region who would save for
their future, their children's future, or other lengthy goals.
Crowd funding: It is utilisation of small amount of capital from large amount of individuals to
enhance better finance for establishing business venture. Crowdfunding making make use of
easy accessible of was network regarding with people through social media where it brings more
opportunities to investors and entrepreneurs jointly the better potential to increase
entrepreneurship by expanding the pool of investor beyond the traditional circle owner and
venture capital.
Crypto currencies: Cryptocurrency is a digital way of virtual currency at a secured by
cryptography. To better understand cryptocurrency it is a system that allows for securing of
payments through online transactions which made denominated in terms of virtual tokens
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(Pasten,, Schoenle and Weber, 2020). It is represent as an entry in ledger account internal to the
system.
CONCLUSION
From above report of Business management and Microeconomics is summarised where
economic related issues through government policies as with having better labour market and
described about impact of economic regulation. The monetary policy and having supply and
demand for money where highlight for impact in economy to stabilise taxes. The another similar
financial aspect to generate that is fiscal policy to better enhance of understanding and
expenditure as well as to decrease the inflation rates at the time of increasing in product and
prices. At last discussing on primary and secondary source of stock market along with
description about Crowdfunding and Cryptocurrency.
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