Social Impact of Business Essay Example | Topics and Well Written Essays - 750 words

Social Impact of Business - Essay Example Translational corporations such as WTO and IMF try to establish international operations by locating industrialized plants or operations in different countries to help in cutting costs; it may also be possible to subcontract work. Globalization helps create international supply chains (IMF, 2001). It helps buy components, raw materials, or additional supplies from traders in different countries. Big Transnational Corporations identified by the UN as firms that manage resources abroad. There are around 79 thousand Transnational Corporations functions in the modern world economy. This allows them ten times the amount of affiliates such as subcontractors, suppliers, and various entities that have business connections with them. It is a fact that a few influential firms carry out most of international commerce. The first firm at the top of the list is the World Bank. Developed in 144, the World Bank offers loans of economic expansion to its member nations. They provide funds for use on p ower plants, roads, pipelines, dams and other communications projects. The World Bank also negotiates strategies of structural adjustment with countries it provides loans. It also gives the countries conditions, which some claim result to unfair load on developing countries (Aslam, 2001). Another firm is the International Monetary Fund (IMF), which is a sister firm to the World Bank established at a similar time. The purpose of IMF is to ease currency exchange for countries that are members so that they have the capability to be part of global trading. It provides access to member countries for foreign exchange. World Trade Organization WTO, established in 1995, is a global body that creates ground rules for international trade (IMF, 2001). Its main goal is to encourage free trade by eliminating any potential barriers to it such as duties, quotas and tariffs. The organization performs negotiations rounds on different topics. Social Impact of Business During the end of the 1990s, the International Monetary Fund (IMF), World Bank, and the World Trade Organization (WTO) started a sequence of efforts focused on improving the policy consistency of their relevant organizations (Aslam, 2001). The policy coherence links to encouraging trade liberalization in southern countries. The World Bank and the IMF have long constituted trade liberalization along with their various policy prescriptions connected as loan stipulations in their agreement with borrowing members. At present, there is better coordination of these efforts with the membership needs of the diverse agreements in negotiation inside the WTO. On a summit in 2001, the World Bank declared that they have 60 billion dollars to give out as loans to Latin American countries over 5 years (Cali, Ellis, & Willem, 2008). The main objective for IMF and WTO was to improve their operational purposes towards more trade liberalization. The economy of the world is growing in its integration. There is exportation of more out put share throughout national borders. Almost half of all services and goods produced globally sell in different nations, instead of domestically. This percentage is higher than that of 1960, which was mostly the export of goods. A significant current trend is service globalization such as insurance, travel, information services, and financial. What drives globalization are factors such as technological

The Difference between Macro and Micro Economics & Price Elasticity of Essay

The Difference between Macro and Micro Economics & Price Elasticity of Demand - Essay Example Microeconomics focuses on the demand and supply of a single product. It studies the behaviour of a particular institute in the market, helping in the management of that institute. It helps in answering various questions such as what type of a product is to be produced; how much of that product is to be produced to meet the market demands; how is it going to be produced; what raw materials are going to be used; what type of fuel would be used; for whom the good is to be produced; and many other such questions are answered via microeconomics. So all the choices a particular person makes comes under microeconomics because he is just concerned with what he is producing rather than the total production of a particular good in an economy. Macroeconomic issues are related to the balance between aggregate supply and aggregate demand. If the aggregate demand gets much higher than aggregate supply, inflation and balance of payment deficit (exports become greater than imports) can take place. O n the other hand, if the aggregate demand gets lower than aggregate supply, recession and unemployment may occur. So it is crucial to maintain the balance between aggregate supply and aggregate demand and macroeconomics helps in doing so. ... Task 2: The Price Elasticity of Demand (PED) measures how much the quantity demanded of a commodity responds to a change in price of that commodity. Price Elasticity of Demand can be calculated by using the following formula: Price elasticity of demand = Percentage change in quantity demanded / Percentage change in price For example, if there is a 40% rise in oil price and the demand for oil decrease by 10% then Price Elasticity of Demand will be -10% / 40% = -0.25. The value of PED is always negative, because demand graphs are mostly downward slopping, meaning that price and demand always go opposite. An increase in price will result in a decrease in demand and vice versa. Thus there will always be a negative figure which would make the sign negative. If the quantity demanded responds substantially to the changes in price, the demand for that good is said to be elastic. On the other hand, if the quantity demanded responds slightly to changes in prices, the demand for that good is sa id to be inelastic. PED helps us in determining whether a good has elastic or inelastic demand. Ignoring the negative sign, if PED is greater than 1 then the demand will be elastic and if PED is less than 1 then the demand will be inelastic. Consider the example of oil. A rise in the price of oil may result in a slight decrease in the demand of oil. The vehicles will continue to use oil, so people would have to pay higher prices. The slight decrease in demand may occur because some people might shift to bicycling. In this case the demand for oil is inelastic. Goods which are classified as necessities have inelastic demand. A patient would have to buy a life saving drug how much expensive it might be