The Business Environment
Role of Business
For centuries people have practiced the barter system, where they’ve traded goods and services to satisfy their needs. A business is the evolution of this process; it provides goods and services in a society to earn a profit by exchanging currency. The role of business in the economy contributes to a higher quality of life, bringing people, equipment and other resources together coordinating the production of goods and services, and creating jobs. Some of the ways businesses raise the standard of living are: paying taxes which the government uses for society, supporting charities, and new innovations that create opportunities for new businesses which serve as suppliers. Overall the key role of business in the economy is: producing goods and services, buying and selling goods and services, creating other businesses, providing employment, innovation and revenue.
Role of For-profit and Nonprofit
In order to compare and contrast the roles of for-profit and nonprofit organizations in the economy, it is necessary to illustrate their similarities and differences. The similarities of both businesses are: they employ people, provide goods and services, have stakeholders, create revenue, have bank accounts, can own assets, receive income from sales, enter into contracts and have investments. The differences for-profit businesses are that they function for the financial benefits of its owners and or shareholders, and pays taxes on their revenues. A nonprofit is a charitable business, whose role or mission is for the greater good of the society, and it is exempt from paying taxes, can be profitable, but their profits are used to facilitate their mission.
Impact of Fiscal and Monetary Policy
The affect that the fiscal policy has on the economy depends on how effective the government’s efforts are to stimulate the economy through taxation, and how their spending decisions are designed to encourage growth, boost employment, and curb inflation. The fiscal policy currently has a huge federal deficit that continues to grow. This huge deficit is in part a product of the recession and slow recovery. As businesses closed and jobs disappeared, tax revenue fell. Meanwhile, spending soared as more people qualified for programs such as unemployment insurance and welfare. In addition, Congress and the White House increased spending and kept taxes low to stimulate the economy, and this did not include the tax cuts put in place years ago by President Bush.
Monetary policy refers to actions that shape the economy by influencing interest rates and the supply of money. The Federal Reserve System (Fed) manages U.S. monetary policy, so the Fed has a vital interest in the fiscal policy and its impact on the economy. Now our nation moves toward a sustainable budget, but wise choices about how to spend our money needs to be made; we must make sure we have the revenue to pay for this spending. The Fed’s new program is to purchase forty billion dollars of mortgage backed securities each month. Their current program expands the holdings of longer-term treasury securities by forty-five billion dollars a month, and keeps interest rate low. These actions lower borrowing costs and improve financial conditions. In doing so, these investments make our economy more productive and competitive.
Strategy for Accessing Global Markets
The GreenPool Service is a membership based program committed to personal and economic development both nationally and internationally. This program will bring together existing green networks and professionals from a broad range of academic and vocational
backgrounds. In order to ensure that the GreenPool program has access to global markets the first point of contact would be the US Commercial Service. The US Commercial Service has information on international markets and trade barriers, and trade…