Business Management and Macro-Economic Policy: A Comprehensive Review

This report provides a comprehensive analysis of the relationship between business management and macro-economic policy. It delves into various economic issues, government regulations, labor markets, income distribution, and employment dynamics. The report examines monetary policy, including the demand and supply of money, and explores fiscal policy, focusing on taxation, public debt, and their macroeconomic effects. Additionally, it investigates the role of primary and secondary capital markets in the context of the business environment. The report aims to provide insights into how these factors interact and influence business operations and overall economic performance. The report covers the effects of government policies, competition, consumer demand, and technological changes. It also investigates the importance of labor market flexibility, income distribution, and employment levels, and how these factors affect business success. The report also covers the role of capital markets, including primary and secondary markets, in facilitating investment and economic growth.

Business Management and Macro-Economic Policy

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

1. INTRODUCTION
The concept of business management is the organization of business operations and their
organization. Management is responsible for the strategy, organization, management and
utilization of the company's capital in order to achieve the policy goals (Demir and Ersan, 2018).
Wages may be affected by an economic policy of a government. It major factor salary benefits
by encouraging employers to make more money for the same job. That's generally fine for
employees, but for companies it can be daunting as costs escalate. Working expenses are
generally the biggest loss of a business. The report is based on analyzing different kinds of
aspects like economic issues, monetary policy, and fiscal policies as well as role of various
primary and secondary capital markets in the context of business environment.
2. General economic concerns
Government policies- Government regulations have the reasoning when and why things should
be done. The agenda of the government outlines a way forward which provides a basis for
reform (Al-Thaqeb and Algharabali, 2019). They will affect the amount of taxes paid by the city,
the immigrant status and legislation, pension payments, parking fees. These policies can affect
on business in different manner. Some of the other effect on industry and business from
developments in government policy are:
 Competition growing
 More consumers in demand.
 Techno-environmental changes rapidly.
 Shift needs.
 Human resource development requirements.
 Direction of the market.
 Public service loss of financial assistance
Labor markets- Flexibility or stiffness on the labor market means problems such as workers'
salaries, ease of hiring and fired employees by employers, duration of probation and union
control. These open economies, which benefit the rights of workers, will reduce unemployment
and increase productivity of labor. Labor organizations influence the supplies of professional

labor to new or developing companies by influencing high-growth enterprises. Legal and
structural barriers prevent firms from laid off underperforming employees which prevent the
expansion of potential growth firms.
Income distribution- The distribution of revenue is the lightness or fairness in which revenue is
shared by society members (Stiglitz, 2018). If all makes precisely the same sum, the distribution
of wealth is completely equitable. However, the allocation of a society's wealth generally lies
between fair and inequitable anywhere in the middle. At the microeconomic stage, inequality
improves poor health and spending on health, and decreases poor people's education
performance. All of these causes contribute to reducing the labor force's economic capacity.
Macroeconomic disparity will serve as a break to growth and lead to volatility. As disparity
influences the behavior of revenue categories. Incapacity to spend and lower levels of health
will, among other reasons, influence development. Growth might limit their appetite for services
and products. They will be able to see the investments accumulated, which banks would lend
then, thus growing economic spending.
Employment- Business owners need workers who can do their work, and the efficiency of
employees is essential to the company's ultimate success. The core advantages of employee
success continue to be understated by business executives to create coherent and rational
strategies for assessing workers. The arrangement of occupation is the agreement between two
parties; normally dependent on the agreement where the job is paid, in which party who may be a
business is the contractor the other the worker. Our main clients are employees who can have
crucial input into the overall consumer experience. Yet they are also ignored or underestimated
and are not seen by other businesses as a valued commodity – both as inputs into consumer
service and as global brands.
Fewer absences, less sales, less robbery and faults mean higher employment for staff. More
security, profitability and consistency. Better employee participation companies far outperform
competitive players in all areas.

3. Monitory policy
Introduction to monitory policy- Monetary policy is the method of drawing up, publishing and
implementation of an implementation plan for a state that oversees the quantity of money in the
market and mechanisms by which new money is provided by the central bank, national currency,
or other professional debt markets. Monetary policy involves monetary and tax control, aimed at
achieving macro-economic goals, such as unemployment, demand, stability and liquidity (Liao,
Ji and Wang, 2019). In order to retain reserves it would be necessary to adjust the rate of interest,
buy and sell public bonds, to regulate foreign exchange (forex) prices and to alter the amount of
cash banks. Monetary policy dependent on inputs from various sources is devised. For example,
economic and financial figures such as GDP and inflation, industry-specific rate of growth and
the related statistics, as well as organizations and communities’ activity – like oil embargoes or
trade tariffs – can be viewed by the monetary body. These organizations will also address issues
posed by industry and corporate associations, surveys by reputable organizations, and public and
other authoritative sources of information. The demand side of monetary strategy, monetary
policy, refers to an act of the banking system of a country to regulate the flow of labor to
achievement macroeconomic targets which foster economic growth.
Key aspects-
 Monetary policy includes decisions taken by the central bank of a country to manage
supplies of capital and achieve sustained economic development.
 Monetary policy may be classed as expanding or contractionary in general.
 Tools include free market activities, direct bank funding, bank balance conditions,
unorthodox lending schemes and management of market perceptions — subject to the
integrity of the central bank.
Demand of Money- The money supply in money economy is the preferred retention of financial
income in the event of cash: that is, reserves of money or banks, rather than savings. It may refer
to the need for money that has a narrow definition of M1 (directly spent) or M2 or M3. The
money demand applies to the overall income that households and businesses possess. Money
demand is influenced by various factors including wages, interest rates, price levels (inflation),

and insecurity. The effect of these causes on the money demand is demonstrated by the three
main explanations. The below are the three reasons:
 Speculative: People often keep capital for speculative reasons to profit from sale of
investments. If the present returns on financial instruments are strong, people want to
spend rather than retain capital for a speculative purpose. We may assume that consumer
spending for speculative reasons rises as potential risk in many other financial products
rises.
 Caution: with unknown outcome needs such as unexpected health expenditures, this is
the extra money. The need for capital is rising with the development of the industry.
 Transactions: this is the required money to complete the transfers. If the overall
transaction amount and size grows in an economy, the demand for cash increases as well.
The short-term interest rates and the need for the capital that households and companies are
interested in have an inverse correlation (Đuričin and Herceg, 2018). The demand for cash is
strong while inflation is low and the inflation cost is increasing; the demand for cash is low.
That's because the expense of holding capital rises as interest rates rise, so people are better off
investors in various assets than transferring cash.
Supply of Money- The provision of money to an economy is regulated by, for example, the Fed
in the United States, its central bank. With free market operations or shifting reserve needs, the
Fed will adjust its money supply.
The brief interest rate is based on the supply-to-money balance. Excess cash supplies exist while
the borrowing costs are above equilibrium. This suggests that households and companies keep
more assets and buy shares to reduce their cash reserves. This will cause defense premiums to
rise and interest rates to decrease. Likewise, once interest rates are below the equilibrium rate,
there is surplus demand for liquidity, and people want to keep the money. This will lead to shares
being sold by companies and households, which will reduce security premiums and raise interest
rates.

4. Fiscal policy
Introduction to fiscal policy- Fiscal policy relates to government expenditure and tax policies to
impact market situation, particularly economic and financial circumstances, such as aggregate
growth in the economy, jobs, inflation and sustainable growth (Ferreira Gregorio, Pié and
Terceño, 2018).
Taxation and its macro-economic effects- Tax policies are the way a government changes its
expenditure levels and tax rates to track and control the economy of a country. It is the sister
monetary tactic by which a central bank controls the money supply of a country. These two
strategies are used in different variations to guide the economic objectives of a government. The
following is an analysis of how fiscal policy operates, how fiscal policy can be monitored and
how it can impact the various people in an economy. Tax policy builds on John Maynard
Keynes, theory of the British economist. This theory often referred to as keynesian economics,
essentially states that policymakers can affect the level of economic and financial efficiency by
raising or decreases taxation and public expenditure levels. In exchange, this effect slows
inflation (generally deemed stable between 2 and 3 percent), increases jobs and preserves a
healthy supply of money. In controlling the economy of a nation, fiscal policy plays a crucial
role. In 2012 for example, many feared that the US economy will actually send the US economy
with simultaneous rises in taxation rates and reductions in government expenditure scheduled for
January 2013.
Public debt in a nation is deemed manageable if the Government is willing, without
extraordinary financial aid or default, to fulfill both its existing and prospective financial
obligation (Rehman, 2018). The risks involved with refinancing are often relevant as countries
lend from capital markets. A loan instrument is a financial assertion requiring the delivery by the
issuer to the borrower on the future point of income, interest or even both. Currencies include
banks, personal bond holders, other nations, their official lending agencies and
intergovernmental creditors like the United Nations, and a wide variety of creditors' debts.
Public debt in a nation is deemed manageable if the government can comply without
extraordinary financial aid or failure to fulfill both its existing and prospective financial
commitments. Analysts examine whether debt stabilization policies are viable and compatible
with retaining opportunities for growth or success in development. The cost involved with

refinancing are often relevant as countries lend from capital markets. The concept of
government debt differs according to its meaning. The fiscal national bank is covered by a
usually limited concept of public debt. The national partner is a wider term. The widest concept
of public debt integrates the state with public – anti entities, such as the central bank. This also
includes state debt (the public sector has a duty to pay not but does not keep debt) and foreign
government debt (debt held by nonresidents of the country). It is necessary to cover all kinds of
debt which pose a danger for a nation's public finances in order to assess the maturity of its debt
proper.
Concentrating only on a loosely specified public debt term will lead to unforeseen rises. For
instance, if a loss-making government-owned company is unable to meet its debt, the central
Government inevitably has to bear the responsibility of ensuring public liability and causing an
unintended deterioration of the debt sustainability of a nation. Fiscal policies are critical to good
economic governance because taxation, expenditure, inflation and jobs all contribute to the
domestic gross product (GDP). This statistic shows the worth of a country's goods and services
over one year.
5. Capital markets
Introduction to capital markets- Stock markets are places where savings and profits are funneled
between capital-intensive producers and capitalists. Both retail and institutional shareholders,
many with money, while those seeking capital are companies, governments and individuals.
Main and secondary markets consist of capital markets. The stock exchange and the bond market
are the two common financial markets.
Primary capital markets- When an enterprise sells new company shares commercially for the
first time, they do so on the equity main market (Rehman and Apergis, 2019). This business is
also known as the market for new topics. The new issue also comes in the form of an initial
public offering (IPO). When customers buy primary shares, the securities provider hires a
company to analyze them and to establish a proxy statement that sets out the value and other
information of the bonds that must be sold. Strict regulations apply on all primary industry
questions. Companies shall submit declaration statements and check for the authorization of their

filings until the Securities and Exchange Commission (SEC) and other securities agencies can go
public.
Firms that sell shares via the secondary equities market can employ investor bankers to buy
shares on offer from major investors (Don, 2019). Small buyers frequently are not in a position at
this stage to purchase securities so because corporation and its stock brokers wish to sell all the
stocks available to meet the requisite volume within a limited time, but must concentrate on
selling the sales to major investors, who will purchase more stocks simultaneously. Investors
may market the transaction often by showing a lane, or by dog and pony, in which money
managers and representatives of the group fly to meet new shareholders and persuade them of
the importance of protection. In the primary market prices are often unpredictable, since demand
is often difficult to forecast when protection is released first. That is why many IPOs have been
developed at low prices. Since joining the secondary market, a firm can collect more money in
the main market through a tender offer. Investors are now owned by the corporation and have
prorated rights. A private placement is another choice that a firm will sell directly to a major
investor, for example a hedge fund or the bank. The securities are not published in this case.
Secondary Capital Markets- Securities are exchanged on the secondary exchange after the firm
sells its offer on the main market. The capital exchange is often referred to. Secondary exchanges
are the New York Stock Exchange (NYSE), the London. The opportunity for small investors to
trade shares on the marketplace is even easier, as they are exempt from IPOs (Brondoni, 2018).
All can buy secondary securities as long as they are ready to pay the required share price. In
general, a broker buys the shares for a secondary market holder. Contrary to the main markets,
where rates are established before the IPO occurs, prices fluctuate with competition on the
secondary market. Investors are also required to pay the dealer a fee for the exchange. The
number of exchanged shares varies every day, since the security supply and demand differs. This
also has a major impact on the price of defense. The secondary market has two classifications:
the market for the auction and the market for dealers. The sale is home to a transparent screening
mechanism where sellers and buyers gather in one place and declare the rates they are prepared
to purchase and sell their shares. One representation of this is the NYSE. But people trade via
telecommunications means in dealer markets. The majority of small investors are trading through
dealer markets.

Crowd funding- Crowd funding involves the use by a vast number of people of limited sums of
money to support a new company. Crowd funding allows use, via social media and crowd
funding platforms, of quick exposure for large networks of individuals to put investment and
investors together to raise the entrepreneurial spirit by increasing the investor pool far beyond
conventional ownership, relatives and venture capital firm circles. The limits on who can finance
a new company and how much they can contribute extend to certain territories (Bond and
Malikane, 2019). These rules should cover in sophisticated or non-wealthy shareholders, similar
to the constraints on hedge funds investing, not to hinder so much of their assets. When too many
young companies struggle, the risk of their shareholders losing their principal is high. Crowd
funding provided developers with an incentive to collect hundreds or millions of dollars of funds
from everyone to donate. Crowd funding gives everybody a place to pitch them before waiting
investors. The two most key roles of this word reflect the crowd funding of startups seeking to
get a product or service into the universe and of people in emergencies. Many people hit by a
natural tragedy, heavy treatment costs or another catastrophic incident, such as home burning,
have gained financial support from crowd funding sites they may otherwise have not accessed.
Crypto currencies- A crypto currency is a digital or financial instrument protected by
cryptography that allows for a counterfeit and a double spending almost impossible (Cavaghan
and O’Dwyer, 2018). Many crypto currencies represent decentralized block chain-based
networks—a distributed leader supported by a disparate computing network. Crypto currencies
are described as generally not released by any central authority, which technically renders them
resistant to government interference or exploitation. Crypto currencies are mechanisms that
permit stable online transfers, priced in dollars in digital 'tokens,' defined by the’s functional
distributed ledgers. "Crypto" leads to various data encryption and encryption algorithms, such as
incline creeping, block chain pairs and hazing roles that safeguard these entrants.
CONCLUSION
On the basis of above report this can be concluded that economic factors play a significant role
in the aspect of success of business. It is so because a business exists inside an environment in
which a range of factors are included such as employment, inflation rate and many more. Each of
them can affect a business performance. From the second part of report this can be concluded

that role of various primary and secondary capital markets such as stock markets and bond
markets in raising money for investment can affect to business in different manner.

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