Economic sustainability- how far should the state involve itself in the world of business?
Definitions and conceptual understanding.
It is the use of a bevy of strategies for in order to employ all of the existing resources optimally. o
A responsible and beneficial balance that can be achieved over the longer term would be the most ideal form of economic sustainability. o
Within the context of a business, economic sustainability usually involves using the variety of assets of the company efficiently to allow it to continue functioning profitability over time. o
Usually the state should not intervene in the world of business, namely the Forex market(Greenback, Euros), commodities market(Nymex Crude, Gold, Sliver), stock market(NYSE Euronext, STI) and the banking, forestry industries. This is to enable the free market to operate freely using the forces of supply and demand. o
However, in the moment of a financial crisis, the state would usually intervene to save the entire market from crashing, avoiding market crisis and hence a depression. This, if were to happen, would result in massive unemployment and widespread discontent with the government. o
Hence, the government should only intervene in times of crisis. o
The state should also involve itself in the operations of CRUCIAL DAY-TO-DAY running business of a country, i.e. the transport industry, medical industry and the enactment of a central bank to regulate IBOR(Inter-Bank Offered Rate) and currency rates Stakeholders
Citizens of a country
The sector that experienced the crash, followed by other sectors Facts and trends in the economic landscape
Quantitative easing (QE) - A unconventional monetary policy used by central banks to stimulate the national economy when the conventional monetary policy has become ineffective. Quantitative easing is implemented by buying financial assets from commercial banks and other private institutions, thus creating money and...
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