Market Forces Shape Organisational Responses

Topics: Monetary policy, Inflation, Economics Pages: 7 (2238 words) Published: August 5, 2013
Countries that use Economic Systems
The Economy of England is the largest economy of the four countries of the United Kingdom. England is a highly industrialized country. It is an important producer of textiles and chemical products. Although automobiles, locomotives and aircraft are among England's other important industrial products, a significant proportion of the country's income comes from the City of London. Since the 1990s, the financial services sector has played an increasingly significant role in the English economy and the City of London is one of the world's largest financial centers’. Banks, insurance companies, commodity and futures exchanges are heavily concentrated in the City. The British pound sterling is the official currency of England and the central bank of the United Kingdom, the Bank of England, is located in London. United States

The US has abundant natural resource, a well-developed infrastructure, and high productivity. It has the world's sixth-highest per capita GDP (PPP). The U.S. is the world's third-largest producer of oil and second- largest producer of natural gas. It is the second-largest trading nation in the world behind China. It has been the world's largest national economy (not including colonial empires) since at least the 1890s. China

The Socialist market economy of People’s Republic of China (PRC) is the world's second largest economy. It is the world's fastest-growing major economy, with growth rates averaging 10% over the past 30 years. China is also the largest exporter and second largest importer of goods in the world. It is the world's fastest- growing major economy, over the past 30 years. China is also the largest exporter and second largest importer of goods in the world.

Japan
Japan is the world's 3rd largest automobile manufacturing country, has the largest electronics goods industry, and is often ranked among the world's most innovative countries leading several measures of global patent filings. Facing increasing competition from China and South Korea, manufacturing in Japan today now focuses primarily on high-tech and precision goods, such as optical equipment, hybrid cars, and robotics. Beside Kanto region, Kansai region is one the leading industrial clusters and the manufacturing center for the Japanese economy. Manufacturing in Japan today now focuses primarily on high-tech and precision goods, such as optical equipment, hybrid cars, and robotics. Fiscal and Monetary Policy

Fiscal Policy is the instrument whereby a government can produce effects in the economy through decisions on taxing and spending. When spending outstrips revenue over a defined period, a budgetary deficit occurs. When revenue exceeds spending the result is a budget surplus. Monetary Policy is the instrument whereby a government controls the supply of money and cost of borrowing money through interest rate changes. Cutting interest rates the cost of money increases borrowing and the supply of money in the economy. Raising interest rates has the opposite effects. Importantly, a change in the cost of money affects its exchange value, measured against other currencies. A change in the exchange value measured against the currencies of trading partners can stimulate or depress a country’s export market.

Difference between Monetary and Fiscal Policy

* Monetary policy involves changing the interest rate and influencing the money supply. * Fiscal policy involves the government changing tax rates and levels of government spending to influence aggregate demand in the economy. * They are both used to pursue policies of higher economic growth or controlling inflation.

Effectiveness of the Fiscal Policy
Attempting to stimulate the economy, through fiscal policy, requires an increase in government spending and the budget deficit. The resulting increase in interest rates the cost of money, raises the cost of producing goods causing higher prices and then making...
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