Business
Unit 1: Government influence on the Business activity
Government objectives
Lower unemployment
Lower inflation
Balance payment
Economic growth
Job creation
Exports and imports: difference between exports and imports.
inflation increases
REAL INCOME decreases
DEMAND decreseas
There is not EXPANSION OF BUSINESS
registered workers
better standard of living
Unit 2: EXTERNAL INFLUENCES ON THE
BUSINESS ACTIVITY
GDP: Value of the good and service produced in a year in a country
IMPORTANCE: Foreign currency
DEFICIT: +import
SURPLUS= +exports
Government Economic Policies
Ways to influence economy
Business Objective
Boom: too much spending //Prices rise quickly //Costs rise
Recession: too little spending //demand decreases// profits decrease
Growth: GDP rises // Unemployment decreases/ / standards increases-
Slump: Serious long recession //High levels of unemployment// businesses fail
MONETARY POLICY AND INTEREST RATES
SUPPLY SIDE POLICIES
FISCAL POLCY (tax)
Directly
Income tax (people) = salary
Profit tax (business) = profits
Indirect
Import tariff/duties=arancel
Import quota ( restricting the number of imports of different products)
retaliation (when the state start to reduce the number of imports in a business, the business will stop to import their products to the country)
interest rates: the cost of borrowing money and the Central Bank only can change
fixed term deposit (plazo fijo)
strategy to increase the competition of national industry against foreign industry
EXAMPLES: Privatization, education public and increase competition (giving new companies help= capital)
Government controls:
LOCATION
COMPETITION: to prevent monopoly
PRODUCTION
RESPONSABILITIES TO ENVIROMENT: ethical decisions: sustainable decisions
regulation of companies ex. weapon business or drugs
The government decided where the companies can be set up
Planning control: if your company doesn't have any problem, the gov. give you a permit to set up your company.
Regional Assistance: the state will help you to set up the company if you set up in unemployment, unpopulated areas ex, San Juan Argentina.
RESPOSIBILITY TO CONSUMER / COSTUMER: consumer protection laws.
Constrains to the business activity
INCREASE COMPETITION
constrain: a limit for a business
ENVIEROMENT
TECHNOLOGICAL ADVANCE
need for business to catch up new technologies
Afford new technologies (new tech. are expensive)
which things is the competition doing? is profitable? is expensive? etc.
how the state can prevent destroying natural habitats?
Environmental fines penalties
laws
Pollution Permits
Consumer BOYCOTT/ presure groups
Boycott: withdraw from commercial or social relations with (a country, organization, or person) as a punishment or protest.
"we will boycott all banks which take part in the loans scheme
OBJETIVES:
Business: Sustainable production method
Gov: Sustainable development
Cost benefit analysis
PRIVATE COST
All the cost as part of a business (pay $)
PRIVATE BENEFIT
Earn $
EXTERNAL COST
The community will pay: ex pollution
Public Benefits
job creation, variety of products