The Impact Of Fiscal And Monetary Policy On Business Organizations And Their Activities

3036 WordsNov 21, 201413 Pages
Introduction The environment is defined as the sum total of all surroundings of a living organism, including natural forces and other living things, which provide conditions for development and growth as well as of danger and damage.(Business dictionary,2014) This means that every business always meets dangers and damage in a different environment, especially, in an unstable environment. For example, Malaysian Airlines have endured financial problems by an aircraft crash, which result in Malaysian Airplane losing 10 million dollars for paying compensation to victim families.This incident demonstrates the environment has always changed , sometimes it could be a good opportunities to develop the businesses or great disasters to damage it. This essay will discusses the changing factors of business environments in detail , following by the sections:how economic systems attempt to allocate resources effectively,the impact of fiscal and monetary policy on business organisations and their activities,the impact of fiscal and monetary policy on business organisations and their activities. 2.1 Explain how economic systems attempt to allocate resources effectively The principles of economy indicates the essential of economic problems: ‘Economic is the study of how society manages its scare resources.In most society,resource are allocated not by a single central planner but through the combined actions of millions of households and firms.(Mankiw,1998:4). However,who

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