The Role of Business and the Economy
Jared J. Leda
Professor Matthew Schigur
BUS 100, Assignment #1, May 4th 2013
Role of Business The role of business in the economy is to ensure capital growth, provide employment, and to produce goods and services. Business is the economy. If there was no business there would be no need for a economy. Small and big business firms pay taxes needed to support governments, give jobs to citizens, and provide consumers the products that they wish to own.
“A business is any activity that provides goods and services is a effort to earn a profit”. (KELLY & MCGOWAN 2012). Profit is the main motivation to start a business. A nonprofit business is a “business like establishment that employ people and produce goods and services with the fundamental goal of contributing to the community rather then generating financial gain”. (KELLY & MCGOWAN 2012). Nonprofits are in the business of doing good. The may or may not earn a profit. Any profit earned must roll over the next fiscal year.
The definition of fiscal policy is government’s revenue (taxation) and spending policy designed to (1) counter economic cycles in order to achieve lower unemployment, (2) achieve low or no inflation, and (3) achieve sustained but controlled economic growth. (businessdictionarey.com 2013). The definition of monetary policy is economic strategy chosen by a government in deciding expansion or contraction in the country's money-supply. Applied usually through the central bank, a monetary policy employs three major tools: (1) buying or selling national debt, (2) changing credit restrictions, and (3) changing the interest rates by changing reserve requirements.. (businessdictionary.com 2013).
The impact of the current fiscal and monetary policy on the economy has had a uncertain effect in financial stability. There is no doubt that policy measures have prevented a sharp contraction in demand in many countries, but...