Economics Report: Impact of Economic Issues on Business Environment

This economics report delves into the evolution of management theory and practice, examining various economic issues and their effects on the business environment. It provides an understanding of government policies, labor markets, income distribution, and employment. The report analyzes monetary policy, including interest rates and money supply, and explores the implications of different aspects of money demand. It also covers fiscal policies, focusing on taxation, social security, pensions, and public debt. Furthermore, the report discusses the role of primary and secondary capital markets, including stock and bond markets, in raising investment capital, with a brief overview of crowdfunding and cryptocurrencies. The report aims to provide a comprehensive overview of these economic concepts and their relevance in the contemporary business landscape.

EVOLUTION OF
MANAGEMENT
THEORY AND
PRACTICE

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Understanding of economic issues such as government policies, labour markets, income
distribution and employment, and their impact on the business environment.......................3
Understanding of monetary policy and supply and demand for money. Implications of
different aspects of the demand for money............................................................................6
3. Understanding of fiscal policies focussing on taxation and its macro- economic effects,
social security contribution, pensions and benefits. As part of the explanation of fiscal
policies, the report should also evidence an understanding of public expenditure deficits and
the sustainability of public debt..............................................................................................7
4 Discussion on the role of various primary and secondary capital markets such as stock
markets and bond markets in raising money for investment. The report should also include a
discussion on crowd funding and crypto currencies...............................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Evolution management is demonstrated as the process of thought which was begin in the
early days of man. Evolution management was started when man realized needs to live. There
are various economics issues which has been faced by the world economy or the countries and
regions which include inequality, labour issues, emerging markets, prospects for growth and
inflation along with influence of new technology. Monetary policy it is adopted by the monetary
authorities of a nation in order to manage and control money supply and interest rare. Monetary
policy is defined as the macroeconomic policy and this policy is usually laid down by central
bank. This policy primarily involves interest rate and supply of money and it is demand side in
the terms of economic policy which has been used by the government to accomplish
macroeconomic objectives which include consumption, inflation, liquidity and growth. Fiscal
policy is demonstrated as the tax policies and government expenditure which impacts on
macroeconomics conditions and economic conditions which include demand for inflation,
employment, and services and goods as well as economic growth. Capital markets they are
defined as investments and savings which are bought among the suppliers of capital, those are in
need of capital. Capital market are those in which current securities have been sold and issued
and they are also known as primary market and in addition secondary market are those in which
already issued securities have been traded among investors(Bagire and Namada, 2015).
MAIN BODY
Understanding of economic issues such as government policies, labour markets, income
distribution and employment, and their impact on the business environment.
Economic issues are those which have been faced by the count6ries or regions and world
economy and it includes labour issues, prospects for growth and inequality as well as emerging
markets and the effect of latest technology. The primary issues of the economic is unlimited
wants, there is scarcity of many resources they are provided in a limited quantity such as finite
fossil fuels, due to the reason of scarcity there always remains a sustained opportunity cost. If
any resource is consumed as one good this means another resource cannot be consumed.
Consequently the feature of the economic they have been concerned about how to distribute the
resources in the society in order to make them fair as well as more efficient use of resources.

There are micro economic problems monopoly and the problems of externalities, volatile prices,
recession, poverty and inequality and inflation.
Unemployment
 The group of peoples entering in the job market are larger compared to the jobs created.
 There might be possibility that rural and urban migration may increase because of the
employment opportunity.
Poverty
 In equality in income
 Increment in population
 Unemployment
There are some changes which influence the government policy on industry and business which
include more demanding customers, increasing competition, along with rapidly changing
technology, market orientation, require of improving human resources, Threat occurring from the
multinational corporation, loss of budgeting, improving focus on exports, corporate vulnerability.
1. Increasing competition – Firms and the business they have been facing competition
exclusively not only from new local entrants but they are also facing competition from
multinational competitors. They need to compete with the remaining world.
Liberalization as well as market orientation they usually create some situation regarding
competition.
2. Changing of technology in an environment- Presently technologies have been changing
rapidly in an environment and they are found quite helpful for the firms because they
helps firm to enhance their services and goods as well as methods and equipment’s for
the purpose of surviving in the market along with to face the levels of competition.
However presently producers have been utilising best world class technology. This
process probably leads to the more investment in the terms of development in innovation
product as well as in research and development (Feldman and Worline, 2016).
3. More demanding customers- Because of increasing competition this process has
extended the choice of the customers in the terms of services and goods. Therefore in this
way customers have been becoming demanding day by day. There are number of new
schemes which have been evolved by the firm in order to drag the attention of the
customers in the larger customer oriented markets.

4. Market orientation- Presently market had become customers oriented. Firstly every firm
should study the market situation after examining all situation, then only firm should
produce services and goods according to the choices of the customers. The firm should
make plan production which should be based on the wants and needs and market research
of the customers.
5. Developing of human resource – To do competition with other firms one company
should be high trained and skilled in order to compete human resources. The huge
expenditure is done on the development of workforce and training.
6. Threat from multinational corporations – While taking entry in multinational
companies them do face threats while having supporting position with ventures (Mackey
and Bassendowski, 2017).
The labour market is called job market and this market is mainly refers to the supply as well as
demand for the group of labour, in this process number of employees supply the demand and
employers they usually provide the demand. This is known as their major component and they
have been combined and linked to the markets for services, goods and capital. The rigidity in the
labour market it refers to the issues of employment which includes staff wages this means
companies could hire and fire number of employees, power of unions and length of trail periods.
The labour market they usually favour the rights of the workers further this process leads to the
more labour productivity and lower unemployment. The flexibility7 of labour market is only the
reason which creates employment issues. The supply and demand they both have been
determined in the terms of labour markets. Those who participate in the labour market they are
known as firms and workers. Workers are those who commonly supply labours to the various
firms in swap for wages. Income distribution this is taken as central part issues in the terms of
political economics. The income distribution it is known as statistical measures how many group
of employee could earn as well as receive amount of money, this statement is called income
distribution. The process of income distribution might cause large scale transformation in the
structure of human resources. The changes in economic output might influence on the motivation
and satisfaction of work. Employment is defined as state of working and having a pair of work.
Underemployment this process occurs while an individual do not work whole time and an
individual doing certain type of job which do not reflect their financial needs and additionally in
training(Suprayogi, Valcke and Godwin, 2017).

Understanding of monetary policy and supply and demand for money. Implications of different
aspects of the demand for money.
Most fundamentally monetary policy this is called as demand side in the economic policy
and this policy also referred as set of actions which could be taken by the central of nation. The
monetary policy this could be classified as expansionary. There are many tools which are
included in the terms of market operations, such as managing market expectations, bank reserve
requirements and direct lending to the banks. The monetary policy it is defined as the process of
complying or implementing the plan, announcing and drafting and the actions should be taken by
the monetary authority or the central bank of a country which probably controls the amount of
money or quantity of money in the economy. The monetary policy it is consist of management
interest rates, and the objectives of macroeconomic which include liquidity, controlling inflation,
growth and consumption. This could be accomplished by the actions such as altering regulating
foreign exchange, interest rate, along with selling or buying government bonds and forex rates
these are required to maintain as well as reserves. Monetary policy primarily they have
responsibility of central bank. In U.S they have Federal Reserve such as (FOMC) Federal Open
Market Committee. They also include Governors of Fed board, they are the presidential
appointees and the presidents of reserve bank they mostly serves and voting FOMC members.
Monetary policy mainly refers to the actions which are taken by the federal open market
committee in order to pursue with directive of price stability along with to maximize the
sustainable employment. Fiscal policy it is demonstrated as spending decisions and revenue
collection which are created by the government. Which include how much is taxed and what is
taxed and in addition which programs are prioritized. Fiscal decisions they are often made by the
administration and congress. The term federal reserve it is probably not involved in the setting of
fiscal policy (Christie and Lemire, 2019).
Policy actions amid coronavirus
The fiscal and monetary policies have been played a vital role when there is occurring of
economic shock. The leading pandemic COVID- 19, this had disastrous effect on the public
health but presently this is affecting economy across the world. For the prevention of COVID –
19 there are various steps have taken by the Fed board of governors and federal open market
committee which needs to be taken. The monetary policy could have positive impact on
economy, this could be successful while negative outcomes could be avoided of poor monetary

policy. In order to achieve this mainly require low as stable inflation. Monetary policy is quite
important for the economy because the process of money supply and adjustments regarding
interest rates they both could play a vital role in confronting economic slowdowns. In the firms,
monetary policies also could decrease the cost of investment. This statement means reducing the
interest rates could increase expenditure by both firms and households, in this way economy is
boosted. If amount of money increases in the economy, further the central bank promote private
consumption. The demand of money would bring a change in real GD, preferences, price level,
expectations and transfer costs. The supplying of money is known as vertical line (Bursch,
Emerson and Sanders, 2019).
The price level
The more prices are higher, the more money is needed to purchase specific services and goods.
In the other things they remain unchanged this means the more the price, the higher the demand
for money. This statement means if the prices are higher than demand will be greater.
Transfer costs
When the process of expenditure is held and the amount of money is reduced, and it requires
more demands for the regular transfers among the money deposits and non-money. If the cost of
these transfers arises then customers would choose fewer out of them (Rosa, 2018).
3. Understanding of fiscal policies focussing on taxation and its macro- economic effects, social
security contribution, pensions and benefits. As part of the explanation of fiscal policies,
the report should also evidence an understanding of public expenditure deficits and the
sustainability of public debt.
Fiscal policy this policy is utilised by the tax policies and government spending which
impacts on macro- economic conditions and economic conditions which include collective
demand for the employment, services, goods and economic growth and inflation. This policy is
mainly used by the government for the purpose of expenditure and revenue collection further
which effects the country's economy. Most fundamentally this policy evaluates the spending of
government and taxation which influence the economy this statement is known as fiscal policy
(Ho, 2018). This process leads to the government lower the taxes and spent much amount of
money in some case it could be both. The main goal of fiscal policy is that to accomplish as well
as maintain the complete employment. Along with reaching higher rate of economic growth and
additionally keeping all the wages and prices in a stable manner (Jugmohan and Steyn, 2015).

This policy is also used in the terms of macroeconomics issues and aggregate demands. Social
security deposits pension schemes is refers to the benefit schemes which commonly provide
regular payments which is known as pension and these schemes are contributed as well as
invested by the scheme manager. Social security this is guaranteed income and it is provided
from the government. This is a basic income which is provided for the older and it is government
based income given to the older peoples and it is funded as special task. This security it is
financed through a payroll, tax. A budget deficits s defined as the spending of the government
and exceeding of the taxes and revenues as well as other sources. If inn any case public savings
are negative this means government has been running a budget deficit. The spending of more
than tax this process this process allow as government to turn a budget deficit, and these deficit
budgets are financed by borrowing. Government usually borrow the money and run the deficit
budget. The public savings is defined as the budget surplus. If there is expenditure more than tax
than this process allow as government to borrow money along with this run the deficit budget.
Public debt is the amount of money which have been owes to the entity by the government. This
debt is commonly composed of different categories which include external and internal. Most of
the public debt are accounted as external debts. Debts are differ from one economy to another.
The developed economy they probably rise their funds by supplying their securities.
Revenues
A range of revenues they comes from income taxes for the national government which includes
social insurance taxes, income tax, consumption tax and corporate tax. However for the non-
governmental companies and organization the revenues comes from services and goods.
Budget deficit – implications
In the contradictory budget deficits are not always negative in the terms of economic health.
Some implication in the terms of deficit budget had been mentioned below.
Increase aggregate demand
The reduction in the taxes further would increase the expenditure of the government, which is
result into increasing in the demand of country in the terms of economic growth.
Fiscal policy
The term budget deficit could be used as expansionary fiscal policy. Which include lower
income as well as corporate taxes. The increasing in government expenditure on the

infrastructure this type id investment drag the attention of the foreign capital and in this way
economic growth is boosted. The country’s public debt is referred as sustainable if the
government have capability to meet present and future payments obligation. When the number of
countries they borrow from the financial markets and the severe risk has been associated with the
refinancing are significant too. Even national debt could be accounted as sustainable for the short
term and at some level there would be possibility of rising rates, debt, and deficits these all
things should be addressed with the process of expenditure cuts and increasing in tax.
4 Discussion on the role of various primary and secondary capital markets such as stock markets
and bond markets in raising money for investment. The report should also include a
discussion on crowd funding and crypto currencies.
Capital market is demonstrated as the place where amount of money is usually exchanged among
the group of peoples who already have excess of it or to those who are in deficit. Capital market
is defined as the part of financial system which is mainly have involvement with raising capital
funds by making deal with bonds, and in shares as well as with long term investments. It is
defined as the market in which investment instruments which include mortgages, bonds and
equities are traded and this process is called capital market. There are numerous financial
instruments which have been traded in the terms of capital markets has been mentioned below;
1. Hybrid instruments
2. Equity instruments
3. Foreign exchange instruments
4. Credit market instruments.
There are different functions of the capital market had been mentioned below :
1. Regulations of funds in proper manner.
2. Rapidly development and economic growth.
3. Capital formation
4. Mobilization of savings.
Primary capital market
The primary capital market are those while any company selling their bonds as well as new
stocks publicly for the first time and it is known as primary market. The primary capital market
is also known as new issues market. The achievements of the capital markets it commonly rely

on the primary market. These markets could be directly obtained from the shareholders. The
small scale business and medium scale business they biotype entry in the primary market in
order to increase their money from the public. There are three methods of primary issue has been
mentioned below;
 Initial public offer
 Preferential issue
 Right issue
Secondary market
Secondary market is demonstrated as the securities which has been traded after the company sold
and it exclusively do offering on the primary market. Secondary market is referred as London
stock exchange, New York stock change along with this Nasal are known as the secondary
markets.
Crowd funding - It is defined as the small amount of the capital from huge group of individuals
in order to finance a new venture, crowd funding utilizes the wide range of networks of peoples
through crowd funding websites and social media.

CONCLUSION
As per discussed above that evolution is something that man realize the need for the survival that
is called evolution. Fiscal policy is used by the government expenditure as well as tax policies
which barely impacts on the economic conditions which include macroeconomic conditions and
along with this collecting demand of the services, goods, inflation as well as economic growth.
Monetary policy is demonstrated as demand side of economic policy and the actions are taken by
the central bank in order to manage supply of money as well as accomplishing macroeconomic
goals that could promote economic growth. Monetary policy this could be classified as
expansionary. In this policy there are many tools which have been included in market operations
such as bank reserve requirements, direct lending to bank, managing market expectations and in
additionally unconventional emergency lending programs and these all are subjected to the
credibility of the central bank.

REFERENCES
Books and Journals
Bagire, Namada, and et. al., 2015. Management theory, research and practice for sustainable
development in Africa: a commentary from a practitioner's perspective. Africa Journal
of Management, 1(1), pp.99-108.
Bursc and et. al.,2019. Evaluation and management of factitious disorder imposed on
another. Journal of clinical psychology in medical settings, pp.1-11.
Christie, and et. al.,2019. Why evaluation theory should be used to inform evaluation
policy. American Journal of Evaluation, 40(4), pp.490-508.
Feldman, and et. al., 2016. The practicality of practice theory. Academy of Management
Learning & Education, 15(2), pp.304-324.
Ho, and et. al., 2018. From performance budgeting to performance budget management: theory
and practice. Public Administration Review, 78(5), pp.748-758.
Jugmohan, and et. al., 2015. A pre-condition evaluation and management model for community-
based tourism. African Journal for Physical, Health Education, Recreation & Dance, 21.
Kannan, and et. al.,2015. Perioperative anaphylaxis: diagnosis, evaluation, and
management. Immunology and Allergy Clinics, 35(2), pp.321-334.
Kretschmer, et. al., 2016. Evaluation and management of postprostatectomy incontinence: a
systematic review of current literature. European urology focus, 2(3), pp.245-259.
Mackey, Bassendowski, and et. al.,2017. The history of evidence-based practice in nursing
education and practice. Journal of Professional Nursing, 33(1), pp.51-55.
Rosa, and et. al., 2018. Transcultural pain management: Theory, practice, and nurse-client
partnerships. Pain Management Nursing, 19(1), pp.23-33.
Ruiz-Villaverde, and et. al., 2017. Public participation in European water management: from
theory to practice. Water Resources Management, 31(8), pp.2479-2495.
Suprayogi, and et. al.,2017. Teachers and their implementation of differentiated instruction in the
classroom. Teaching and Teacher Education, 67, pp.291-301.
Vaidya, and et. al.,2017. An individualized approach to the evaluation and management of
primary aldosteronism. Endocrine Practice, 23(6), pp.680-689.

Wagire, et. al., 2020. Development of maturity model for assessing the implementation of
Industry 4.0: learning from theory and practice. Production Planning & Control, pp.1-
20.