Preview

Economic Factors

Good Essays
Open Document
Open Document
979 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Economic Factors
Chapter 9: Political and Economic Factors Affecting International Business 9.3 Economic Factors Related to International Business
Page 284 – 292 Economic Systems An economic system is what allows a country to decide what to produce, how to produce, and for whom to produce. These systems include natural resources, labor, capital, management and standards for creating products. Market Economies In market economies, i) ownership of private property is encouraged, ii) businesses are encouraged to produce better products, iii) competition is encouraged because it can create better quality and lower prices, iv) the Government has little direct involvement with the business itself, and v) selfsufficiency is not seen as an economic goal. Supply and demand control market economies. The “law” of supply states that as the price of a product increases, producers will be willing to make more of that product. The “law” of demand states that as the price of a product increases consumers will demand less of that product. Producers must find the equilibrium point which is the point at which the consumers are willing to pay the asking price and the company still makes a profit. Centrally Planned Economies In centrally planned economies the government controls the ownership of private property. By having more government control the profit motive is not the main goal of the business. There are fewer pure centrally planned economies following the collapse of communism in the former Soviet Union. Mixed Economies A mixed economy includes government involvement and private ownership of businesses. In some countries, the government owns the transportation and communication businesses. In socialist mixed economies, most of the main industries are government controlled, but citizens are free to work in other industries. Canada has a mixed economy. Because Canada has a large, land mass and a relatively small population, the Canadian government has to play a major role in our important

You May Also Find These Documents Helpful

  • Good Essays

    economic factors

    • 415 Words
    • 2 Pages

    Critical thinking is an individual's form of judgment that has a particular purpose and reflective judgment. When individuals use critical thinking they reach a decision or solves an issue of judging what to believe or what to do, but reaches this conclusion in a thoughtful way. Critical thinking is a tool that individuals can use to evaluate incoming information. On the other hand, ethics is a branch of philosophy that encompasses right conduct and good life. Ethics has broader in the analyzing right and wrong than the standard conception. Ethics is a set of choices that individuals make on how to live their lives.…

    • 415 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    economics

    • 291 Words
    • 2 Pages

    Problem #5 >>Answer Yes I believe the airline should accept a charter flight proposal from a group that offers to guarantee the sale of 90 seats over 250, because the risk varies highly because its only 90 seats and realistically those 90 seats will be a guaranteed buy opposed to 250. So it will be a great advantage to the airline to do that plus sales increase.…

    • 291 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Each society is faced with a problem concerning their economic state. The economic problem is that there are limited resources in relation to unlimited wants. This problem brings about the need for a system to answer questions like what to produce, how to produce, how much to produce and how to distribute production. An economic system is the organisational and institutional pattern through which choices are made about which wants to satisfy, and how to allocate resources to do this. The different economic systems include planned economies, market economies and mixed economies. Australia has a mixed-market economic system in which there is a mixture of control by the government and freedom of individual enterprise and in which the basic economic…

    • 1625 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    An economic system is an organized approach to producing and distributing goods and services. It is an organize way to answer the three economic questions of what, how and to whom to produce. Although every country must have an economic system to answer these three economic questions, their method of producing and distributing largely depends on the country's historical experience, form of government, objectives and ideologies. To some people, government intervention in the economy are consider significant to protect against the worst elements of capitalism while others think that such regulations are unnecessary invasions of their freedoms. To what extend should the government get involve in the economy. The government should take a limited role in the economy while allowing private enterprises because such involvement would eliminate the negative aspects of capitalism while adopting the positiveness of Socialism. This would benefit the economy in variety of ways. Firstly, government regulations allow businesses to remain in the private hands while removing some of the worst abuses of pure capitalism. Secondly, a government intervention protects the consumers, producers, and the community as a whole. Finally, limited government involvement prevents crises such as inflation, unemployment and depression.…

    • 1029 Words
    • 5 Pages
    Good Essays
  • Better Essays

    An economic system is an organized approach to producing and distributing goods and services. It is scarcity (in economic theory, the limited availability of resources and goods; the excess of wants over needs), which creates a need for economic systems. There are different types of economic systems in which all are believed to be the correct solution when it comes to scarcity. Capitalism is based on an approach to economics that promotes private enterprise. In a private enterprise system, you will see profit, initiative, competition, incentive and self-advancement. Socialism is an economic philosophy that stresses public ownership of the means of production rather than private ownership. Underlying this philosophy is the belief that this system is morally better because it reduces the gap between the rich and the poor. In socialism, there is government involvement in the economy, either through control or ownership of productive resources. Socialists believe that the government should provide basic necessities for all, as well it believes in competing political parties chosen to govern by majority rule, with minority rights guaranteed. The economic systems of nations in today's world are not simply capitalist or socialist. Economic systems now have elements of both capitalism and socialism. They are mixed economies. Canada is a mixed economy because it has a unique combination of capitalist and socialist policies. Government intervention basically means the amount of involvement the government will have in the economy. For Capitalism to work there must be little or no government involvement in the economy. For socialism to work there must be complete government intervention in the economy, where as in Canada there is some government involvement in the economy, but people have the freedom and individualism to do as they wish like in Capitalism. Some people believe that governments have a responsibility to protect the public good by regulating the activities of the…

    • 1425 Words
    • 4 Pages
    Better Essays
  • Good Essays

    Econ 202-1 Summary

    • 825 Words
    • 4 Pages

    Unlike in planned economies, their consumers ultimately decide what goods and services will be produced. The government has little intervention in this market because market economies primarily rely on privately owned firms to produce the goods and services for them. This is the best thing even though the government has little control, sometimes decisions are better made in a whole, than in the hands of one man. Although recently developed nations are known has market economies, they could and have been classified as a mixed economies also. This is because they allow market forces, they way of running the society, to drive most of their activities, only permitting government intervention to bestow that it is needed to provide stability. A mixed economy is where majority of the decisions are made by the interaction of consumers and also the government plays a significant role in the allocation of resources process. In other words, a mixture of the planned and market economy is where this economy falls, some industries are privately owned and others are publicly owned or nationalized. The mixed economic system combines capitalism and socialism in itself as a characteristic. Capitalism because they encourage businesses to create…

    • 825 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Imagine a country where the goods and services that are produced are based on the market. The market decides who gets them and how the economy grows. This is called a Free Market which is also known as Capitalism. In capitalistic countries citizens have sole ownership of their land or businesses. Profit is the motivating factor in this economy. The citizens are more willing to work due to the retention of profits from their businesses. Corporations are able to issue bonuses and rewards for those with high productivity. Businesses can establish themselves or trade with other nations for more profit. There is limited government input in a free market economy. Businesses compete with each other giving the consumer a wide variety of goods and services at a low competitive price. The market is determined by supply and demand. The citizens in a free market have the ability to…

    • 470 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Economic Environment

    • 3234 Words
    • 13 Pages

    Using economic concepts from the module; identify the key factors from the economic environment that affect an organisation of your choice.…

    • 3234 Words
    • 13 Pages
    Powerful Essays
  • Better Essays

    Economics

    • 1429 Words
    • 6 Pages

    Gasoline has become an essential part of life, something in which many of us have become dependent on. The price of gas is closely watched by the millions of consumers, and with the fluctuating prices it has many of us feeling drained, and always asking a common question; why do gas prices rise and fall? There are several factors that cause gas prices to fluctuate. One factor being the price of crude oil itself. Crude oil is used in the production of gasoline, so it 's an essential component. Secondly seasonality plays a part in the pricing of gas. This means at specific times during the year gas prices may differ for various reasons. Lastly futures market influence the price of gas by changing the price of oil itself.…

    • 1429 Words
    • 6 Pages
    Better Essays
  • Better Essays

    Economics

    • 1017 Words
    • 5 Pages

    Domino’s pizza is considering entering the market-place in your community. Conduct research about the demographics of your community, for example the population size and average income per house-hold, and other independent variables, such as price of pizza and price of soda, for this assignment. By conducting a demand analysis and forecast for pizza, you will be able to make a decision whether Domino’s should establish a presence in your community.…

    • 1017 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    Economic

    • 708 Words
    • 3 Pages

    * They do not have money because their milk price has been 38cent per litre…

    • 708 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    economic

    • 678 Words
    • 1 Page

    people or groups of people (populations) and thier income or way of money. Economic inequality…

    • 678 Words
    • 1 Page
    Good Essays
  • Powerful Essays

    Economic

    • 1743 Words
    • 8 Pages

    This front sheet must be completed by the learner and included with the work submitted for assessment.…

    • 1743 Words
    • 8 Pages
    Powerful Essays
  • Satisfactory Essays

    Mixed economies have advantages of both free enterprise system and the command system. It is based on the free enterprise principle, which means that firms can people in a country with this kind of economy are able to choose which goods and services to purchase. Mixed economies are owned by both private and public sector. The government needs to prevent monopolies and to guarantee that products are safe for consumers and to protect the environment. It also plays a role in the allocation and distribution of resources. Nevertheless, mixed economies still encourage consumption of harmful goods.…

    • 259 Words
    • 1 Page
    Satisfactory Essays
  • Good Essays

    SOCIO ECONOMIC ASPECT

    • 746 Words
    • 3 Pages

    Ecocell Thundervolts Company embraces its social responsibility to the community while satisfying the needs of the customers. As a business entity the company is assuring that it complies with the rules and regulations given by the government.…

    • 746 Words
    • 3 Pages
    Good Essays