1 / 14

Understanding Economic Environment: Inflation, Unemployment, and Globalisation Challenges

This unit explores the critical components of the economic environment, including inflation, unemployment, and interest rates. Inflation leads to rising costs, affecting business profits, while high unemployment may decrease demand for goods and services. Interest rates influence borrowing decisions, impacting business investments and consumer spending. Legal policies and fiscal measures play significant roles in shaping the economic landscape. Additionally, globalisation creates interconnected markets and multinational companies, presenting both opportunities and challenges for businesses worldwide.

leora
Télécharger la présentation

Understanding Economic Environment: Inflation, Unemployment, and Globalisation Challenges

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. M2 Country Comparison Unit 1 – The economic environment

  2. Inflation • Inflation occurs when there is a general rise in the price of goods in the whole economy. • A rise in the rate of inflation might reflect a rise in costs they have to pay; employees will want more wages, costs of materials may go up and the cost of fuel and energy may rise. This may decrease the amount of profit a business makes.

  3. Unemployment • Unemployment is when you have people who are of working age and actively seeking a job but unable to find one. • If unemployment is high, this could benefit a business if it wants to expand. • If unemployment is high less goods and services will be demanded.

  4. Interest Rate • The interest rate is the cost of borrowing money. • The higher the interest rate the less likely a business will borrow money to invest. • The lower the interest rate the more likely customers will borrow money to buy goods and services.

  5. Legal Policies • Policies such as: • Holiday Entitlement • Statutory sick pay • Flexible working regulations • Disciplinary and dismissal procedures

  6. Fiscal Policy

  7. Monetary Policy

  8. China Employment Policies

  9. Global Interaction • Globalisation involves the creation of global markets, global businesses and global products. • Key aspects of globalisation include: • The creation of global brands • The creation of global products and global advertising • Huge economies like China and India • Instant global communications

  10. Types of Interdependence • Business reply on each other on different levels • Local Level • National Level • International Level

  11. Supply Chains

  12. Multinational Companies • A multinational company owns at least 50 per cent of the shares in at least one overseas business. • The overseas business that is part owned or fully owned is then called a subsidiary. • Some business may enter into a joint venture, this is when two businesses will create and share ownership of a new company.

  13. Movement of capital • Investors are always on the lookout for investment opportunities. • Investors may move their business operations to a country where costs are lower.

  14. Difficulties in relegating • Can move to new locations • Loss of Jobs

More Related