¶ … Future of Marriage
Economy and Business
The economic business cycle is represented by the fluctuating levels of economic activity than an economy goes through during longer periods of time. The stages of the business cycle are growth or expansion, peak, recession or contraction, through, and recovery. It is not possible to determine the duration and frequency of each business cycle stage, as they vary in accordance with each economy and environmental factors that influence it. The economic growth process for most businesses takes place during the expansion stage of the business cycle. This economic growth refers to the development of companies regarding their sales, production capacity, and incomes.
The economic variables that can be analyzed in relationship with economic change are represented by gross domestic product, final and intermediate goods, real and nominal GDP, per capita GDP, the consumer price index, and others. Economic change depends on the evolution of these variables. Their flexibility or inflexibility determines economic change opportunities. In addition to this, these economic variables' evolution allows country's economies to address the opportunities provided by each stage of the business cycle. By analyzing these variables, governments can identify the economic change they are interested in producing in their economies.
1.3. Inflation has an important effect on economic growth. In situations where the inflation index reaches high levels, this means that consumers cannot afford to purchase most of the products in the economy in case. If the quantity of purchased products is reduced, the companies that produce them suffer important economic setbacks. In addition to this, governments are affected by the reduced levels of collected taxes that are applicable to purchased products, and to companies' incomes. Therefore, inflation can stop the economic growth process, and determine economies to enter recession. Lower levels of inflation can also produce such effects. Specialists...
The fiscal policies from which economic strategies are developed are represented by different spending policies that can significantly influence macroeconomic conditions. The objective of these policies is represented by the state's attempt to control the national economy. Such fiscal policies are based on reducing or increasing tax rates, reducing or increasing interest rates, and reducing and increasing government expenditures level. Based on these fiscal policies, other authorities develop the economic strategies that are intended to reach the objectives established by fiscal policies.
2.2. The government has an important influence on economic growth in business. This is because company's activity and possibility of growth significantly depends on macroeconomic conditions within the country in case (Investopedia, 2013). These macroeconomic conditions are established based on the fiscal and monetary policies developed by governments. In countries with numerous types of taxes to be paid by companies, and that also reach high levels, companies' economic growth is strongly slowed down. In countries with fewer taxes to be paid by companies, they are encouraged to increase their investments, and to expand their business. This also helps improve national economies.
2.3. There are significant differences between public and private sector business. In the public sector businesses are limited to state owned enterprises. Such enterprises can be found mostly in developing countries. International organizations are interested in determining governments to develop privatization processes for these state owned enterprises. The disadvantage in public businesses is that they reduce competition in different industry sectors. This is because in most cases, such enterprises hold the monopoly in these sectors. The advantage is that governments have the ability to establish the prices in these…
