Business Environment Essay

1025 Words Jul 7th, 2014 5 Pages
The economy in its simplest definition is a system of trading goods. Our text lists it as both a financial and social system that “represents the flow of resources through society, from production, to distribution, to consumption” (Kelly & McGowan, 2012). In this system then businesses represent one part of the economy, consumers another, and the government a still another part. The economy falters if consumers do not have money to spend or if businesses do not have goods or services to trade. Businesses make the products, ship the products, and provide the services that consumers purchase; therefore, they can influence the economy by choosing what to sell or not to sell. Businesses and Business-like establishments come in two …show more content…
A for-profit business is mainly interested in making profit for its owner, owners, or stockholders. In a non-profit, financial gain is not the goal. Most non-profits work “hand in hand with businesses to improve the quality of life in our society. Focusing on areas such as health, human services education, art, religion, and culture” (Kelly & McGowan, 2012). The government also has an effect on the economy. Through fiscal and monetary policy the government attempts to influence the economy. The fiscal policy is the government's effort to “influence the economy through taxation and spending decisions that are designed to encourage growth, boost employment, and curb inflation” (Kelly & McGowan, 2012). While, fiscal policy is often directly related to political ideology, it is still widely accepted that lowering taxes increases the economy (Kelly & McGowan, 2012). Currently government spending is quite high but there is some debate whether this has increased the the economy or not since local and state governments have scaled back spending possibly trying to meet budgets (Lucking & Wilson, 2012) and the economy is still sluggish. Meanwhile the current monetary policy from the federal reserve is keeping interest rates low in an attempt to promote economic growth. This seems to be having mixed results. Many companies seek to market their wares globally. As a hypothetical example, The South's Finest Chocolate Factory, could decide to market globally.

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