Business Environment Essay Example | Topics and Well Written Essays - 2000 words

Business Environment - Essay Example Others macroeconomic factors like production, inflation, employment, investment, domestic income, international business relationships etc are discussed in Macro Economics (Childs, D, and Deitrich, S. 2003). P4: Economics can be described as social science. It is a study of how individuals, households, firms, consumers, nations maximizes there profit with limited resources and availabilities. In economics way we can term it as generating characteristics or optimizing their behaviours. Optimizing or maximizing behaviour means generating more gain for the concerned authorities with limited amount of resources. So in this type of economic social science people came to know how to utilize the limited resources to reach the targeted result. For example for an individual household it is like distributing their limited resource (income) into several household goods and services to gain maximum satisfaction for the all family members. It’s very hard for the households to decide (what to buy and how much to buy?) to maximize their satisfaction level. Three economic systems are Capitalist Economy or free market economy, Socialist Economy or state-run economy and mixed economy or public sector economy. Examples of free market economy are United States Economy. For socialist economy or command economy example can be North Korean economy and for mixed economy it can be United Kingdom’s Economy. In a free market economy capitalist society runs with the method of free organization network. Government’s role in this economy is like- Whenever government get a chance to promote competition it does that. Clear all the restrictions for the organizations to operate in a free market. To control the free competitions government should intervene with the market time to time. Sometimes government interventions motivate free market economy so that other way it wouldn’t be possible. In a command economy government role in it is very prominent and strict. For c apitalist economy where government had minimum role in the economy but for socialist one government plays a huge role regarding markets rules and regulations. Nations with this system not only dislike free economic systems but also they made strict law against it. In this system all the productions units and natural resource are controlled by government and no private organizations are allowed to do that. Another economic system where simultaneously free economic system and socialist economic system works is known as mixed economy. There two sectors private and public resides simultaneously. Here private sector can work as a free market entity in broader economic and political restrictions. Main four questions for any economy is ‘what to produce’, ’how to produce’, ’when to produce’ and ’whom to produce’. All the country cannot produce everything by them. Resources are limited and fixed in this world. If a country wants to produ ce everything by them then that country will not going to make a single thing perfectly and because of lack of resources in middle of the work everything will be stopped or jeopardise. P5 To acquire certain economic goal government policies regarding taxation, current account deficits, subsidiaries and other financial matters which are under government’