Economics and Finance: Circular Economy, Trade & Macroeconomic Impact

This report delves into key economics and finance concepts, starting with an analysis of circular economy strategies for a golf club's services, applying various 'R' principles. It further explores international trade and development, focusing on Papua New Guinea's palm oil exports and strategies for enhancing their complexity and market reach, recommending trade policies to reduce export costs. A comparative macroeconomic analysis of Maldives and Australia assesses inflation and unemployment rates, determining Maldives' current business cycle phase and advising the Four Seasons Hotel accordingly. Lastly, the report examines how a central bank can influence macroeconomic factors by adjusting official interest rates, particularly in the context of a developing country aiming to stimulate economic activity. Desklib offers a wealth of similar solved assignments and past papers to aid students in their studies.

Economics and
Finance for Business

Contents
Contents................................................................................................................................................
INTRODUCTION................................................................................................................................
SECTION 1..........................................................................................................................................
Propose four circular economy strategies of this golf club's two services..................................3
SECTION 2..........................................................................................................................................
International trade and development............................................................................................4
SECTION 3..........................................................................................................................................
Variation between the macroeconomic measures of Maldives and Australia with assessment of
the business cycle phase Maldives is currently in.......................................................................6
Provide recommendations to Four Seasons Hotel on the basis of business cycle of Maldives...8
SECTION 4..........................................................................................................................................
Assess how the Country’s Central Bank bring change in the official interest rate and how
would this change affect different factors in Macroeconomics...................................................9
CONCLUSION..................................................................................................................................
REFERENCES...................................................................................................................................

INTRODUCTION
Economics is the study of the social science which is related to the aspects that is leading
to have the huge growth and sustainability in the target market. As the branch of knowledge is
being concerned with the production, consumption and the overall transfer of wealth. On other
hand business finance is the funds which are being availed by the business owners in order to
meet the needs which also includes the commencing a business, obtaining the top-up funds to the
finance business operations which are being obtained to purchase the capital assets for the
particular business (Anderson, 2019). Business finance is called as the corporate finance for the
effective allocating resources, creating economic forecasts, reviewing the related opportunities
and so on. This respective report is based on the following question and their respective case-
study which analyse the circular economy strategies by using different R principle. In section-2,
they are having the large island country north of Australia and analyse the export items and its
complexities. Moreover, this analyse the unemployment rate and balance of trade and Would this
country's central bank be likely to increase or decrease its official interest rate at the same level.
SECTION 1
Propose four circular economy strategies of this golf club's two services.
Circular economy is model of production and consumption that includes the sharing,
leasing, repairing, refurbishing and recycling existing materials as long as possible. There are
certain circular economy strategic which are being used for the and in content to Manly Golf
Club, it is the main concern of the business which is related to the overall growth of the business.
They are dealing in two services which are explained as follows:
Golfing: It is the club and ball sport in which the certain players which use the various
clubs to hit balls into a series of hotels on a course in as few strokes as possible (Gallegati, and
Semmler, eds., 2018). In context to golf club, they are offering golfing in which they are using
the various R principles which are explained as follows which helps the business to have the
overall consideration of the market are as follows:
 R0, Refuse: In this, Manly Golf Club make the product redundant by abandoning their
functionality or by offering the same functions with a radically unique product.

 R1, Rethink: In this strategies, they must make the product use more intensive such as
sharing product. The Manly Golf Club use the rethink about the particular use of the their
services.
 R2, reduce: Golf Club must increase the efficiency in the product manufacturing or use
by consuming the fewer natural resources and related materials.
 R3, Reuse: In this strategy, they must use the alternative use of their products and the
resources so that they can have the effective use of the aspects (Dupacova, Hurt, and
Stepan, 2006).
Weddings and functions: Furthermore, the company is also dealing in the conducting
the weddings and functions so Golf club have to use the appropriate aspects which is leading to
have the better approach in the market. There are following strategies which can be sued by them
are illustrated below:
 R4, Repair: The Golf Club have to repair and maintenance of defective products by
which they can use with its original functions which helps the company to ensures its
profitability and growth.
 R5, Refurbish: The Manly Golf Club must ensure the keep their old products and keep
update them so that they can have the innovative and advancement in their products and
services.
 R6, Remanufacture: They must use the parts of discarded products in the manufacturing
of new products and keep their same functions.
 R7, Repurpose: In the last strategy, The Manly Golf Club must use this in which they
can use the discarded products or its parts in a new products with the unique functions.
SECTION 2
International trade and development
International trade and growth is defined as the foundation for the economic growth and
the poverty, reduction but it must be inclusive and consistent with the effective development
with the sustainability within the economy. International trade helps in increasing the revenue
and decrease the overall competition in the target market. This also has longer product lifespan
which also ensures the easier cash flow management. This also leads to have the better risk
management to the business by which they can rightly ensures the overall working and the

sustainability of the business in the given marketplace. The country is required to keep the
different products which they are exporting and importing under check.
In this aspects, Papua New Guinea is the chosen country for the scope of this section. The
product which has been taken from the site provided which has low complexity is “Palm oil”
which is the export item and is having low complexity. There is certain point by which the
overall complexity could be improved with the use of creativity, innovation and value-adding
which are explained as follows:
It is being known that the 95 % of the country palm oil is rated as sustainable and they
are global leader in premium palm oil produces but with the current introduction of palm Papua
New Guinea oil ad logging industries, they have begun to put the serious strain on the once
evergreen landscape of the country (Varian, 2020). The country can make the processes of
production of palm oil more advanced and innovate with the view that the Palm oil generation in
the country is viewed as better and new countries attract to buy the product from the country.
With the aim of international trade, America is the chosen area for the target market as this
respective proposal leads to have the huge market growth so that they can rightly ensures the
better working of the economy and with the help of oil extraction machine and the innovative
techniques, they can use the better use the such aspects by which they can rightly expand their
business in the international marketplace. This will be effective proposal as this helps in the
better lives of the people and they are using the price effective export policies by which they can
rightly ensures the better versions of the company and so on.
The trade related policy is being recommended to the country is that, the government
should try on reducing the different transportation costs which are related to export. The country
needs to reduce the trade and tariffs which are making it more complex for the country to export
its goods. Palm oil is a product which can be put to different uses and can be considered a
necessity. The country can help in making the exports easier so that they can gain an increased
amount of export fees and can bring increased level of foreign currency into the country. With
the help of effective trade-related policy, this also leads to have the better consideration which is
leading to have the effective operations within the economy.

SECTION 3
Variation between the macroeconomic measures of Maldives and Australia with assessment of
the business cycle phase Maldives is currently in.
Inflation Rate:
The Australian inflation rate as seen some ups and downs in the last 10 years. At the start
of 2012, the country saw a low inflation rate of 1.3% which eventually raised in the second
quarter of 2014 but due to coronavirus outbreak, the country saw a regressive decline in the
inflation rate and it fell below 0% and turned negative (Kayal, and Rohilla, 2019). The economy
eventually managed itself in the year 2021 and currently the country is having an inflation rate of
3.5%
Figure 1 Australia Inflation Rate
As compared to Australia, the inflation rate of Maldives has been very high and too low.
At the start, in 2012, the inflation rate the country has was 11% which is too much for a country.
After progressive usage of fiscal and monetary policy, the country was able to lower this high
inflation but it has decreased too low in the years. After the coronavirus pandemic, the country
was not able to recover as the Australian economy did and till date, the country is facing an
inflation rate near t0 0% but since it has a small rise, there’s hope.

Figure 1 Maldives Inflation Rate
Unemployment rate:
The Australian economy has seen many fluctuations in the unemployment rate of the country
over 25 Years. The country saw its peak in the year 1996 when the unemployment rate was
above 8% in the country (Orzechowski, 2020). After effective use of macroeconomic policies,
the country was able to bring down this rate and currently the country is facing an unemployment
rate of 4%.
Figure 1 Australia Unemployment Rate

As compared to Australian economy, Maldives has faced a less unemployment rate in the
country. The least of the rate was seen during the year 1992 when it was 0.8. But this
unemployment rate has increased gradually for the country and now, the country faces an
employment rate of 6.4 which is 2 point more than that Australia faces.
Figure 1 Maldives Unemployment Rate
From the above comparison, the economy of Maldives is said to be in the contraction
phase as the country is seeing similar rate of unemployment over some years and the inflation
has reduced to some extent, this means that public is not spending as they were before. The GDP
of the country has also done down crucially in this year.
Provide recommendations to Four Seasons Hotel on the basis of business cycle of Maldives.
The business of Four Seasons Hotel should not expand its hotel operations in the Maldives in this
case as it will not be beneficial for the business to invest in an economy who is facing
contraction in its business cycles (Mayer, 2018). The business might want to employ high
qualified hotel managers which would rise the cost for the business and the revenue is not certain
in a contractionary business cycle.

SECTION 4
Assess how the Country’s Central Bank bring change in the official interest rate and how would
this change affect different factors in Macroeconomics.
Monetary policy is the action taken by a country's central bank to maintain economic
stability and achieve other objectives such as reducing unemployment, inflation, price instability,
and recession (Calafiore, and Damianov, 2021). Because such a policy reform is designed to
regulate the current economic condition or difficulty, it is termed a corrective measure. Monetary
policy may be classified into two types: contractionary and expansionary. Changes in the
discount rate, open market operations, and reserve requirements are among the tools or measures
used by the central bank under this policy.
In the case of country X, the Central bank of the country would reduce the current interest rate.
Currently, the interest rate is at 4%. The central bank would apply monetary policy and will try
to bring this interest rate down. This is due to the fact that country X is a developing country. It
needs better flow of money in the economy so that different needs of the economy are able to be
met. From the past two years, the country is having a very low GDP growth and is also facing
unemployment. To cater these, it requires a better flow of money in the markets of the economy
so that people would spend and invest more, rather than saving (Kalecki, 2022). This reduction
in interest rate would guarantee more investments in the economy and in return, new additions to
the GDP and better employment. This type of usage of monetary policy is known as
Expansionary Monetary policy as the country would now face expansion in the market and GDP.
Impact of using Expansionary monetary policy on different following factors:
a) Consumer spending and Business investment- Due to the reduction in the interest rate of
the banks, the borrowing costs for the public has reduced. Due to this, borrowings would
increase in the market which in turn rise the money circulated and in hand of the public.
Consumers will spend freely and businesses would invest more in the business.
b) The Unemployment rate- As the businesspersons invest more money in the businesses,
the economy welcomes new start-ups in the country with better and increased job
opportunities. This in turn would reduce the unemployment rate of the country.
c) As the spending rises in the economy, so does the general price level of the products in
the economy. This reduction in interest rate would rise the inflation rate and bring it to
normal, i.e., 2% for the economy.

d) As the availability of the money has increased in the economy, the rate of domestic
currency falls in front of international currency making a rise in the currency exchange
rate (Profits, and Credit, 2020).
e) As the exchange rate rises, the exports of the country get cheaper and the trade balance
moves towards a deficit.
CONCLUSION
From the above mentioned report it can be concluded that, having detailed knowledge of
economics and finance is crucial for a business to start up or invest in a economic setting. The R
strategies helps in guiding the business in what way they can be more competitive in the market,
some of them selected are, rethink, reduce, reuse, etc. The business of Four Seasons Hotel is
recommended to not invest for now as the country is facing Contractionary business cycle. The
usage of monetary policy has its chain effects which helps the economy to bring stability and
growth in the economy.

REFERENCES
Books and Journals
Anderson, P.L., 2019. Business economics and finance with MATLAB, GIS, and simulation
models. Chapman and Hall/CRC.
Gallegati, M. and Semmler, W. eds., 2018. Wavelet applications in economics and finance.
Dupacova, J., Hurt, J. and Stepan, J., 2006. Stochastic modeling in economics and finance (Vol.
75). Springer Science & Business Media.
Varian, H.R., 2020. Computational economics and finance: modeling and analysis with
Mathematica (Vol. 2). Springer Science & Business Media.
Sen, A., 2021. Money and value: On the ethics and economics of finance. Economics &
Philosophy, 9(2), pp.203-227.
Krieg, R.G. and Uyar, B., 2021. Student performance in business and economics statistics: Does
exam structure matter?. Journal of Economics and Finance, 25(2), pp.229-241.
Calafiore, P. and Damianov, D.S., 2021. The effect of time spent online on student achievement
in online economics and finance courses. The Journal of Economic Education, 42(3),
pp.209-223.
Kalecki, M., 2022. A theory of the business cycle. The Review of Economic Studies, 4(2), pp.77-
97.
Profits, C. and Credit, I., 2020. the Business Cycle. Trans. R. Opie. New York.
Kayal, P. and Rohilla, P., 2019. Bitcoin in the literature of economics and finance: a
survey. Available at SSRN 3441652.
Mayer, C., 2018. Prosperity: Better business makes the greater good. Oxford University Press.
Orzechowski, P.E., 2020. US Small Business Administration loans and US state-level
employment. Journal of Economics and Finance, 44(3), pp.486-505.