Impact of Macroeconomic Policies on Economic Growth
Added on 2020-10-23
13 Pages3355 Words390 Views
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Financial and EconomicLiteracy for Managers
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. Business expansion by using business economics concept of globalisation andmultinational companies.............................................................................................................12. Macroeconomic policies used by UK government to improve economy...............................23. Business economics concepts of market structure, demand and supply.................................54. Management accounting cost concept and budgeting.............................................................65 a. Amortization schedule for 3 years........................................................................................75 b. Calculation of present value.................................................................................................75 c. Calculation of Net present value..........................................................................................8CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10
INTRODUCTIONA business always starves for growth and expansion both financially and economically.This motive of an organisation is achieved by its managers and directors of the business byputting in continuous and efficient efforts. The present report is made with a purpose of aidingthe managers of an entity with the information which can assist them in achievement of thebusiness goals of growth and expansion. The mangers are also presented with the factors whichaffects the business in both positive and negative ways with the measures that how they can grabopportunities. The financial literacy is presented with concept of management accounting costand budgets. Overall the report prepared to present the economic and financial factors, data andinformation to manager so that they have complete knowledge and skills to deal with thebusiness, adhere the opportunities and solve problems.MAIN BODY1. Business expansion by using business economics concept of globalisation and multinationalcompaniesBusiness expansion: A major sign of growth for an organisation is expansions. Withexpansion a concern enters into new markets, introduces new products/services, expands itsbusiness operation in different activities. The expansion of an enterprise largely depends uponthe financial situation of an organisation (Krugman, 2017). The availability of funds and theability of an entity to generate funds and its capacity to pay back that funds are the key factorsthat governs the expansion of an organisation. The strategies for business expansion includesmarket penetration, market expansion, product expansion, diversification and acquisitionstrategies. underneath are the two expansion plans for a business:Globalisation: This means to enter the world market with current or new product orservices. Form past 2 decades globalization has become a part of the large business organisation.As with the development of the economy and technology the world got connected in a betterway. with this connectivity the demand of the products available in one country have developedin another country as well (Messne, 2016). But going global a business it expands its activitiesnot only financially but also economically. This also improves communication integral amountthe various nations around the globe. In the 21st century the pace of global trade, outsourcing andsupply chain are gearing on and are having a significant impact on organisation and its practices.With globalisation a business gets financial and economical exposure in form of better trade and1
communication between nations, access to improved technology, media, healthcare, education,consumer goods and other resources (Intriligator, 2017). This also comes with huge risk anddisadvantages such as its can have hazardous impact on the environment due to increasedwastage and also can threaten the local and national level business of that nation which willdiminish the economic development of the country. So, to global is an opportunity for a businessbut it shall be done with an in-depth research and evaluation of financial position of business andeconomic environment of that nation.Multinational companies: A multinational corporation means business carrying out itsbusiness operation other than its home nation. These companies have their offices or factories indifferent countries and a centralised head office from where it coordinates its global managementand business operations. Multinational corporations create jobs with higher pay, access toadvanced technology and creates a pile of opportunists for the nations in which operates. Themultinational corporations require a huge investment (Multinational Corporation, 2018). ThisMNCs are very large and big in their business operations such that they have access to advancedand sophisticated technology with a professional and skilled engagement around the globe. For abusiness organisation to enter into an international market being a multinational corporation anoption with this the business entity will also become a part of globalisation. Business expansion and MNCs: To go global means to enter the international marketand MNC is a technique to enter the global market so this can be stayed the MNC is a measure togo global for a business organisation (Otley, 2016). This can be concluded that globalisation andmultinational corporations are two different business concepts that go hand in hand and present amutual idea to of entering the international market with a huge business organisation to present asignificant product or service in the international Marketa. 2. Macroeconomic policies used by UK government to improve economyUK government has made various policies that are helpful in improving the economiccondition of UK. The key objectives of these policies is to stable the inflation rate. Authoritiesalways aim to improve production level and generate more employment opportunities for thepopulation by making effective macroeconomic policies (Cingano, 2014). The main aim ofgovernment is to provide income sources for the public so that they can live a healthy life.Government of United Kingdom is continuously working to raise standard of living and reducingpoverty by framing effective policies. 2
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