BM413 - Global Business Environment: An Analysis of Economic Policies

This report delves into the intricate relationship between economic policies and the global business environment, focusing on trade protectionism, emerging economies, and the roles of monetary and fiscal policies. It examines the impact of Trump's trade policies, highlighting the potential for global trade wars and increased consumer prices. The report also explores opportunities for global expansion in emerging economies like Brazil, China, and Russia, emphasizing their growth potential and investment opportunities. Furthermore, it discusses how governments can stimulate economic growth through monetary and fiscal policies, using historical examples such as the US anti-inflationary recession in 1982 and the Economic Stimulus Act of 2008. This analysis provides a comprehensive overview of the economic factors shaping international business and is available for students seeking similar resources on Desklib.

Running head: ECONOMICS
ECONOMICS
Name of the student
Name of the university
Author note

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Table of Contents
Answer b....................................................................................................................................2
Answer c.....................................................................................................................................3
Answer d....................................................................................................................................5
Reference list..............................................................................................................................7

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Answer b
The trade policy of the Trump is driven by the belief that previously other countries
have taken advantage of the foreign policy of the united states. The president known to have
imposed tariffs on different raw materials which are imported from the European countries.
Therefore, America is known to have imposed huge amount of tariff on billions of dollars of
good from china, European union, Canada and Mexico. Tariffs are been put on the products
which are basically made abroad. this had led to global war which is known to hurt the
consumers around the world. It had therefore made quite hard for the companies for operating
and this will also force them to push higher prices on the consumers. The protections police
will be forcing the Europeans for facing the various unsettling problems of the huge current
account surplus. This can also lead to the negative impact in the stock markets. The tariffs
will be making the steel and aluminum from the United Kingdom much more expensive in
the united states that will keep on declining the demand and also will be affecting thousand of
jobs. Trump is known to impose security tariffs on the grounds of national security in order to
protect the goods and jobs of its own people. The tariff is known to make every day goods
expensive in nature. The US-Mexico-Canada Agreement and the pending US-Europe trade
deal will also result in slight economic downturn. The protectionist policies of Trump will be
leading to economic isolation that can also lead to political as well as cultural isolation. Due
to the huge amount of trade protectionism followed by Trump, it will be limiting the choice
of goods for the consumers along with stagnation of the technological advancements.

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Answer c
Internationalization and globalization are the two most important objectives that need
to be followed while running a business. The emerging economies are known to be those
economies which has the characteristics of the developed market although does not satisfy
the standards to be termed as the developed market. the four largest emerging economies are
India, Brazil, China and Russia.
Brazil is known to be the largest economy in the south America. Presently, the
country is been experiencing slow growth and inflation. Some of the reasons how brazil can
provide to opportunity for the global expansion are. Exponential growth: brazil which is
known to be eighth largest economy n the world where it is expected to grow to be the fifth
largest in the world. The domestic performance of brazil and the output had been doing quite
well. This shows that the country can do very well in the export market. it is also known to be
one of the emerging market economies as most of the products that brazil exports are the raw
materials. The country is also known to experience innovation with green technology,
facilitation of trade and building of the medium size enterprises. For this reason, Brazil can
be stated as the fertile ground for business. The collaboration potential of brazil also proved
to be one of the biggest opportunities for the business. In the year 2011, the united states of
America were the largest importer of Brazilian goods followed by china, Argentina and south
Korea. The huge growth of the air transportation, oil and gas and mining proved to be the
opportunities for the Brazilian market. the IT market of brazil is also expected to grow to
more than $134 billion in the present years.
There is presence of many factors which will allow the foreign investors to invest in
china. The factors are the huge availability of capital, high rate of competitiveness, presence
of regulatory environment, market stability conditions and openness to regional as well as

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international trade. The economy of china is known to have a major influence on the rest of
the world. The Chinese companies are also becoming increasingly competitive and influential
in nature where Europe has become one of the major trading destinations. The reason is that
there is a presence of huge potential growth in china where it is known that economy of
China will be growing at its own pace. The Shanghai free trade zone is also known to develop
on a positive note. Due to the sluggish domestic economic growth, the volume of the Chinese
investments for growth opportunities in the foreign countries are kept on rising. he
government predicts that Chinese investments in other countries will surpass the volume of
foreign investments in China during the course of next year. China also known to have an
influential and dynamic economy. The rise in the educated workers are also rising in the
future. The companies of china are also transforming themselves into giants on the global
scale and also becoming the major competitors.
There is presence of various advantages of doing business in Russia. For this reason,
Russia can provide the opportunity for the global expansion for business. Presence of the
educated population with rich natural resources and strong financial system can help in
boosting the economic activity. The presence of global boom in the commodities had also
helped the stock market of Russia to become one of the top performers.

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Answer d
Government can stimulate the growth of the economy with its two main instruments
that are mainly the monetary policy and the fiscal policy. The trickle-down theory refers to
that economic proposition where taxes on the business and the wealthy society should be
reduced for stimulating the business investment during the short term. As it will be benefiting
the society in the long term also. The benefits include tax cuts on the business, high income
earners along with the capital gains and theory. Th two main policies that the government
employs for influencing the growth in the economy and inflation are the monetary and the
fiscal policy. Monetary policy takes place due to changes in the rate of interest which will
affect the supply of money. For increasing the spending in the economy and also encouraging
the growth of the economy the government may be lowering the rate of interest and increase
the amount of money supply. When the economy will be growing too much, there will be
inflation and the government at that time will be increasing the rate of interest or lower the
supply of money for discouraging spending. On the other hand, the changing in the spending
of the government along with taxation known to influence the aggregate demand. For raising
the aggregate demand in the economy, the government in known to raise the spending and
lower the amount of tax. When the government will be decreasing the aggregate demand,
they might lower the government spending and raise taxation.
One of the most successful implementations of the monetary policy took place in the
United States in the year 1982 where the ant inflationary recession had been taken place
under the guidance of the Federal reserve. Back in the 1970, the unites states had known to
suffer from huge rise in prices with the rising unemployment which resulted in stagflation.
The interest rate had been quite low at that time. By the end of 1981, the funds had been
raised to m more than twenty percent for fighting the inflation. After that the rate of inflation

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which was more than 13.5 percent in 1981 went down to 3.2 percent. The rising rates were
known to be shock to the capital structure in the economy. The companies had to cut cost as
they were suffering from huge loses. The economy had also known to went into depression,
however, the objective of the monetary policy has been able to lower the amount of inflation.
Fiscal policy is considered to be one of the most effective policies in order to
counterbalance the natural depression in case of spending and economic activity which will
be taking place at the time of recession. An example of the fiscal policy is the Economic
Stimulus Act of 2008 where the government attempted to boost the economy. In this case the
government used to send a lump sum amount to the dependent people where the total cost
reached to $152 billion. The tax cuts were favored for expansionary fiscal policies. Also, in
case of American Recovery and Reinvestment Act, there had been tax reliefs for families
which includes withholding reductions of $800 per family. Along with health care extensions
which help in stimulating the economic growth.

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Reference list
Amundson, C., 2017. Free Trade or Protectionism.
Armanios, D.E., Eesley, C.E., Li, J. and Eisenhardt, K.M., 2017. How entrepreneurs leverage
institutional intermediaries in emerging economies to acquire public resources. Strategic
Management Journal, 38(7), pp.1373-1390.
Bown, C.P., 2017. Steel, Aluminum, Lumber, Solar: Trump's Stealth Trade Protection (No.
PB17-21).
Chang, J., Van Witteloostuijn, A., Eden, L., Eden, L., Miller, S., Hitt, M., Cheng, J., Eden, L.,
Hoskisson, R.E., Eden, L. and Lau, C.M., 2018. Strategy in emerging economies.
In International Business in the Information and Digital Age (Vol. 41, No. 2, pp. i-xiv).
Amsterdam, The Netherlands: Elsevier.
Freund, C., 2017. Trump's Confrontational Trade Policy. Intereconomics, 52(1), pp.63-64.
Gay, R.D., 2016. Effect of macroeconomic variables on stock market returns for four
emerging economies: Brazil, Russia, India, and China. The International Business &
Economics Research Journal (Online), 15(3), p.119.
Karwowski, E. and Stockhammer, E., 2017. Financialisation in emerging economies: a
systematic overview and comparison with Anglo-Saxon economies. Economic and Political
Studies, 5(1), pp.60-86.
Lim, L., 2018. Trump’s Protectionism: Method to the Madness?.

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