BSc Business Management: Macroeconomic Policy and Business Report

This report delves into the intricate relationship between business management and macroeconomic policy, providing a comprehensive analysis of key economic factors that influence the business environment. It explores the impact of government policies, labor markets, income distribution, and employment on business operations. The report further examines monetary policy, including its role in controlling interest rates and money supply, alongside the influence of supply and demand forces. It also discusses the implications of monetary policy on economic growth and stability. Additionally, the report analyzes fiscal policy, encompassing taxation, social security, and public expenditure, and assesses its effects on economic indicators. The role of primary and secondary capital markets in financing long-term investments is also discussed. Overall, the report aims to provide a detailed understanding of how macroeconomic policies shape the business landscape and offers insights into effective management strategies within this context.

Business
Management
and Macro-
Economic
Policy

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
CONCLUSION...............................................................................................................................................9
REFERENCES..............................................................................................................................................10

INTRODUCTION
Business Management and Macro-Economic Policy refers to the way in which the
management of the Businesses can be done and developing a particular level of understanding
about the Macro-Economic policies of the Government (Ahmed and et.al., 2021). Therefore, it is
quite important for the management of the organizations that it is able to understand it and
implement it in their working pattern in a highly effective manner. Therefore, the managers are
required to enhance their understanding about it and make sure that they are able to work in a
proper manner for the purpose of implementing the required level of changes so that the business
is able to sustain in the market. In this report, a detailed focus will be made on understanding of
economic issues, understanding of monetary policy and supply and demand for money,
understanding of policies. Additionally, a specific analysis will be made on discussion on the
role of primary and secondary capital markets.
MAIN BODY
General Economic Concerns-
In a particular economy, there can be multiple general economic concerns which are
required to be managed in a proper manner (Awadallah and Elsaid, 2020). The General
Economic Concerns which are associated with the economy are explained as follows-
 Government policies- The Government policies are quite important for an economy as
they act as a basic parameter on which the economy’s growth level can be determined
(Chourou, Purda and Saadi, 2020). Therefore, it becomes quite important that the
Government of a particular country is able to make sure that it sets out the right policies
which will be quite helpful in ensuring that it is able to attain the goals and objectives in a
proper manner. If the Government policies are good then this can lead towards a positive
impact on the Business Environment and if the Government policies are not good then
this can create a negative impact on the Business Environment. Thus, the Government is
required to carefully determine its policies.
 Labor Market- Labor Market is also known as Job Market. Here, there are different
forces like Demand and Supply forces of labour. Therefore, it is quite important that the
Government is able to make sure that the influence of these particular forces is accounted
and therefore this market is able to provide skillful and talented employees. If the right
policies are set then the Labor Market will be able to put a right impact on the Business
Environment thereby allowing the Business Organizations to progress further quite
effectively and efficiently in a proper manner.
 Income Distribution- This refers to the way in which the Income Distribution can be
done in a proper manner. In an economy, there should be a particular focus on ensuring
that the Income Distribution is done in such a manners so that the all the sections of the

society are able to progress in a right way. The focus of the Government has to be on
ensuring that the Income Distribution is done in such a way so that the growth of all the
sections of the society can be ensured which will help in attaining the economic goals and
objectives quite effectively and efficiently in the right manner. This will be quite helpful
in ensuring that a positive impact is put on the Business Environment.
 Employment- This refers to the level of employment which is being generated in the
economy (Haq and et.al., 2020). Therefore, it is quite important for the Government of a
country to make sure that the sufficient level of employment is generated in the economy
which will be quite helpful in ensuring that the economic growth and progress can be
attained in a proper manner. Therefore, in this way it can be said that a positive impact
can be put on the Business Environment.
Monetary policy-
It is a particular policy which is adopted by the monetary authority of a nation in which
the focus is on the control of interest rate payable for short-term borrowing or the money
supply which is often seen as an attempt to reduce inflation for the purpose of ensuring
the general trust of the value and stability of the nation’s currency (Iqbal, Gan and
Nadeem, 2020). There is a particular level of influence which is put by the supply and
demand forces of money. Thus, the Government is required to make sure that these
particular forces are considered in the terms of their impact. Further, there are also
implications of different aspects of the demand for money like Transaction, precautionary
and speculative. The Monetary policy of a country has to be good so that there is a
positive impact on the Business Environment and the Businesses are able to progress
further.
Monetary policy is considered as a very important policy. This is due to the following
reasons-
 Increase in the economic growth- Setting out an appropriate monetary policy is quite
essential to increase the overall level of economic growth (Iwuoha, 2020). Therefore, for
the government of the country it is quite important that the monetary policy is reviewed
constantly so that the increase in the economic growth can be ensured.
 Solving out economic problems- With the use of a monetary policy the different types
of economic problems can be identified properly by the Government (Meyer and Hassan,
2020). Therefore, it is quite important for the Government that it brings out suitable
changes in this policy which will be quite helpful in ensuring that these problems are
solved and thus the economic stability can be ensured. When economic stability is
ensured, the overall level of GDP growth within the economy can be enhanced and thus
this will be quite useful in ensuring that the attainment of the economic goals and
objectives can be ensured in a proper manner for boosting the economic growth in the
long-term.
There is a particular level of influence which is put by the Supply and Demand forces of
money in the market. Therefore, it is quite important that the influence of these forces can

be accounted. The Supply force of Money refers to the supply of the money in the
market. The Demand force of Money refers to the demand of the money in the market.
The point at which curves of both these forces meet is the point where equilibrium is
struck. This is a major determinant of Interest Rates to be used within the market.
If there is a change in the quantity demanded of the money or quantity supplied of the
money then this creates an impact on the point where the equilibrium will be achieved.
Thus, generally this creates an impact on the price levels which are prevailing in the
market and thus impacts them a lot.
Further, there are various types of aspects which are related with the demand of money in
the market. A detailed explanation about all of these aspects is provided in the following
manner-
 Transaction- This refers to a level of demand which has to be considered by the
government of a country (Njerekai and et.al., 2020). It covers the requirement of the level
of currency which is required by the people of a country for the purpose of purchasing the
goods and availing the services. Therefore, this acts as a major determinant in the demand
force of money in the economy. The Government therefore is required to make sure that
it is able to consider this particular aspect while determining the demand for money
because in this way it will be able to make sure that it can take the right actions in this
regard.
 Precautionary demand for money- This type of demand for money is mainly
channelized by the precautions which the people generally take in order to make sure that
a particular balance of money can be maintained as a precaution so that it can be used in
the case of a contingency. The Government has to thus consider this particular aspect of
demand of money so that it is able to make sure that it can take the appropriate actions in
this regard.
 Speculative demand for money-This type of demand is influenced by demand for
highly liquid financial assets like domestic money or foreign currency which is not
influenced by real transactions like trade or consumption expenditure. Therefore, in this
way this type of demand of money is quite important to be considered while determining
the demand level of money in the economy which will be helpful for the Government in
taking all the necessary actions according to the needs and requirements.
Fiscal Policy-
This refers to the policy in which the government revenue collections and expenditures
are covered and the wide ranges of detail are also covered (Ozdemir, Han and Dalbor,
2021). Therefore, it is quite important that this particular policy can be used by the
government so that it is able to ensure that the revenues can be enhanced and the
expenditures can be reduced. The main aim of the Government should be to make sure
that the fiscal goals and objectives are attained as a part of this policy and the fiscal

deficit should be reduced to a certain percentage of GDP. This will lead towards a boost
in the overall economic growth of the country.
Taxation is a process in which a certain percentage of tax is levied by the government of
a country on an individual’s income. This thus helps the government a lot as it a main
source of income for its which helps it in carrying out all the necessary expenditures.
There are various types of macro-economic effects of Taxation. An explanation of these
effects is provided as follows-
 Impact of increase in the taxes- With an increase in the tax rates the savings of the
people reduces and thus this reduces their potential to purchase the goods and avail the
services in the market (Phan and et.al., 2021). Therefore, in this way it lowers down the
demand level of the Businesses in the economy.
 Impact of decrease in the taxes- With a decrease in the tax rates the savings of the
people increases and therefore this can lead towards an increase in their potential to
purchases the goods and avail the services in the market (Robina-Ramírez and Human,
2020).
Social security contribution, pensions and benefits are a part of Fiscal Policy. These are
quite essential from an economic point of view because the people are required to be
provided appropriate financial security after they retire from their job. Thus, the
Government has to make sure that a provision is kept for providing financial security.
This will be quite helpful for the Government to be able to make sure that it can help the
people by providing them financial security.
Public Expenditure Deficit typically occurs when the overall Government Expenditure is
more than the Revenues during a particular period of time i.e. mostly a year. Therefore, it
can be said that it is good till a certain percentage of GDP. This is so because it shows
that the Government is spending the right amount of money on the society and is carrying
out its social expenditures in a proper manner. There are different types of deficits. Their
explanation is provided as follows-
 Revenue Deficit- It refers to the difference between the Total revenue expenditure and
Total revenue receipts.
 Fiscal Deficit- It refers to the difference between the Total expenditure and Total receipts
excluding borrowings.
 Primary Deficit- It refers to the difference between the Fiscal Deficit and Interest
payments.
Thus, these are the main forms of deficit which create a particular level of impact on the
economy. Therefore, it becomes quite crucial that the Government is able to manage
them in the long-run which will be helpful in the attainment of the long-term economic
growth in the market.

Public Debt refers to the amount of money which is owed by the Government of a
particular country to the various types of lenders (Schiavone and et.al., 2020). The
Government of a country is required to make sure that it is able to manage this debt
which will enable it to be able to make the right economic progress quite effectively and
efficiently in a proper manner.
The Sustainability of Public Debt depends upon the influence which is created by a
number of factors (Tilt and et.al., 2020). The Debt Burden which has been taken by the
Government is considered as sustainable when it is able to meet out all its necessary
obligations without facing problems and issues. Therefore, in this way it can be said that
if the Government is able to meet out all the necessary obligations without requiring
financial assistance or going into default then the Public Debt can be termed as
sustainable. Further, for the purpose of maintaining the required sustainability level it is
quite necessary that the Government of a country aims for bringing out stability which
will be quite helpful for it effectively and efficiently.
For a proper assessment of sustainability, the debts which pose a threat to the country’s
public finances are required to be covered. It is best for the Government to take a proper
approach to deal with this risk so that it is able to maintain the required economic
stability. Thus, it is quite important for the Government of a country that it is able to take
a comprehensive approach and thus ensure that the economic stability is not
compromised while taking more Debt. Also, the Debt Burden which the economy can
bear has to be determined so that the management of the debts can be carried out quite
appropriately. This will help in managing the debts in such a manner so that the public
finances do not face excessive burden of debt.
Capital Market-
Capital Market refers to a market where there is an extensive dealing in the long-term
debt or equity (Vlados and Chatzinikolaou, 2020). Here there are people who have a
requirement of capital for their various types of needs and requirements. Also there are
people who want to invest their capital for getting an optimum amount of returns.
There are different types of Capital Markets. Their explanation is provided as follows-
Primary Capital Market- Primary Capital Market is where dealings are conducted by
ensuring that the equity-based securities are given directly to the investors by the issuers.
Thus, the trading of equities of various companies happens in such type of market.
Secondary Capital Market- Secondary Capital Market is where the various types of
investors buy and sell the securities which they already own. Thus, here the buying and
selling of the already existing securities in the market takes place through the use of a
common platform.

Crowdfunding- Crowdfunding refers to a particular concept where the funding is done
by ensuring that the small amounts of money can be gathered from a large number of
people (Vural-Yavaş, 2020). This is typically done when a large project is required to be
funded which involves a heavy expenditure to be incurred on the part of the
organizations. Therefore, it is quite crucial that the focus is put on it so that the funds can
be gathered as per the needs and requirements. The types of Crowdfunding are discussed
as follows in the following manner-
 Reward-based Crowdfunding- This refers to a type of Crowdfunding where the
individuals contribute a small amount of donation for a particular business. This is done
with the expectation of receiving a non-financial reward in return later on.
 Donation-based Crowdfunding- This refers to a type of Crowdfunding where the
funding for a large project is done by asking the different types of individuals to donate
small amount of funds for the same purpose. This is quite helpful to make sure that the
project can be managed quite successfully and in the right manner effectively and
efficiently.
 Peer-to-Peer lending- This refers to the creation of an online service where the
matching of the lenders and borrowers can be done. Therefore, in this way it can be said
that the use of this type of service can be quite helpful for ensuring that the needs and
requirements of both can be met.
Cryptocurrency- It is a digital asset in which the investors invest a large amount of
money and expect a higher-rate of return to be provided to them within a short-period of
time (Li and et.al., 2020). Investment in cryptocurrency is considered to be quite risky as
the cryptocurrencies market is considered quite volatile because it witnesses a lot of
fluctuations. Thus, the investors who want to get more returns within a short-period of
time ensure that they are able to invest in Cryptocurrency. Investment in cryptocurrency
is considered to be quite secure because it is protected through cryptography which
makes it nearly impossible to counterfeit it. There are different types of cryptocurrencies
in which the consumers are investing. They are explained as follows-
 Bitcoin (BTC)
 Litecoin (LTC)
 Ethereum (ETH)
 Bitcoin Cash (BCH)
 Ethereum Classic (ETC)
 Zcash (ZEC)
 Stellar Lumen (XLM)
 Bitcoin Satoshi’s Vision (BSV)
Thus these are the main cryptocurrencies which are trending in the market and therefore
the customers can invest in them to ensure that their investments get a higher-level of
return within a short-time period. This is an emerging and new form of investment which

has made sure that the people are able to invest their surplus funds in it which has raised
its value within the market and has ensured that it gains a high-level of popularity among
the people in the market.
CONCLUSION
From the above report, it can be concluded that Business Management and Macro-
Economic Policy refers to the approaches adopted in order to ensure that the Businesses are able
to prosper well in the future in the market. Therefore, it is important that the desired actions can
be taken by the Businesses to be able to sustain in the market properly and ensure that they are
able to attain a much-required strategic edge over the competitors in the market. The
management of the Businesses is required to give consideration to the influence put by multiple
factors which can be quite helpful in ensuring that the appropriate level of profits can be earned
and the attainment of the various types of short-term, medium-term and long-term goals and
objectives can be done in the future.

REFERENCES
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