Economics for Management - Article Example

Name Instructor Course Date Economics for Management Economics is one of the major fields that can be considered essential in the management not only of businesses but also of a nation. The proper management of the different policies of the government related to different aspects of the nation. The important and essential processes in the nation are encompassed by the different concepts of economics. It can be surmised that in the study of the various facets in the administration of any government and the commencement of the different policies which are largely attributed to economics, make up the nation. This can be attributed to the factors such as employment and market dynamics (Chrystal & Lipsey, 1997). In the study that was conducted, the relationship and role of the different fields of economics is the main focus. The objectives were undertaken through the selection of articles that are based of areas of economics related to environment, to fiscal and monetary issues and to international concerns. A. Economics and the Environmental Issues One of the issues that are put into focus in the study that was conducted is economic application and policies in effect to the environmental issues. Such necessity can be perceived due to the fact that consumption of products that are derived from the natural resources can be encompassed by the measure of economic value and worth. In the United States, the convergence of the environmental issues is the Environmental Protection Agency (EPA). In an article that was published in November, the EPA had discussed the project that had been 3 yrs in the making. In the said issue, the said agency was able to affect the economic condition by reductions of the total pollution in the country. Specifically the agency recorded a reduction in the amount of pollution by 3 billion pounds. This resulted to diminution of health benefits required by the population by 3.5 billion US dollars, which is a per annum average (Ryan, 2006). The achievement was possible by restructuring the management of different establishments, organizations and companies. The particular action was undertaken through the participation of different groups and allocating resources for the reduction and decrease of pollution and the products that can cause harm to the environment. The actions that were undertaken were related air and water problems. The article that was studied mainly describes the action undertaken was made possible through the allocation of resources and economic planning that was implemented by the companies and manufacturing facilities that cooperated in the project. The main problem whose main solution was sought is the problem on waste management specifically involving the major economic participant, the producers of the goods. They are attributed to produce most of the harmful by-product. In reaction to the conceived problems regarding pollution, the reduction in the pollutants that came from the production of different products from the manufacturing agency is one of the conceived solutions which can be undertaken through the economic management of the resources of the participating groups. The said notion can be demonstrated through the equated amount for the reduction that is presented in Table 1. The pollutants was presented in monetary values to be able to present, compare and better determine the effect of the environmentally related problems to the economic aspect of both the industries and the nation at large. Table 1. The environmentally related problems in relation to the effect of the EPA project. Main Air Pollution Problems   Problems Pollutants Reduced (lbs.) Investments in Pollution Control ($) NSR/ PSD Acid Rain, Respiratory Illness, Heart Disease 135 million $310 million Air Toxics Cancer, Birth Defects 0.4 million $1 million Petroleum Refining Acid Rain, Respiratory Illness, Heart Disease 292 million $2,073 million Total   427.4 million $2,384 million Main Water Pollution Problems   Problems Pollutants Reduced (lbs.) Investments in Pollution Control ($) Stormwater Contaminated Runoff 195 million $ 150 million CAFO Animal Wastes 12 million $ 10 million CSO/SSO Raw Sewage 26 million $ 930 million Total   233 million $1,090 million Source: (Ryan, 2006) Based on the results presented on the table, it can be conceived that for every amount that is accounted for the reduction of the pollutant can be equated to a specified quantity of pollutants that is reduced. Due to the fact that economic aspect can be observed in any issues in the society, it is inevitable to consider that in the environmental issues can be expressed through the economic perspective. The benefits that can be attributed to the project can be presented through the results of the reduction of pollutant undertaken by the EPA which can be summarized through the following points: The objectives involve the air pollutants, petroleum processing plants and water contaminants. Air action per year: projected reduction of 379 M lbs sulfur dioxide, 92 M lbs nitrogen oxides Result: health benefit reduction of $3.5 B, 500 premature deaths and other ailments 230 M lbs decrease in water pollution The allocation of the resources that can be observed in the case presented can be considered as an essential aspect in the success of the EPA project. Although the said task was not fiscally mandated, the output can serve as the basis for the establishment of the venture as one of the actions that can be assumed to be able to attain the sustainability that can greatly affect the economic development of a nation or in a smaller scale an organization (Cypher & Dietz, 2004). The economic and the environmental aspects in a nation can be considered as two interdependent factors. This can be observed specifically in nations that are still developing. Most developing nations have their economy based mainly on the crops, on land and on policies exemplified by the Green Revolution. They are mainly composed of the agriculturally-based projects and activities. In such cases, the economy of the country can largely defined on the environmental aspects. Although the different scenario can be recognized in developed countries such as the United States, the definition and the interdependence of the two factors does not vary and cannot be wavered. Thus, the importance of the economic policy can be justified through the case presented. The sustainability and environmental integrity is essentially defined, in this case related policies are just on the way, for the importance and the advantages can already be perceived. The ‘circle of poison’ can be considered as one of the most important concept that can be presented, it can be viewed as the inability to perceive the tradeoffs and the turnabout of the wastes that are thrown in nature that can hinder the development of the economy in the future (Cypher & Dietz, 2004). Pollution policies have been undertaken already, but the case presented exemplified the positive results of such advocacies. These types of policies can be lined with significant policies such as Green revolution, promotion of agriculture and land reform policies and laws. B. Economic Issues and Monetary Policies In the study that was conducted, one of the most important areas that can be examined is the dynamics of monetary factors. The said aspect can also be related to the policies that are made by the government. The area is essential in the government due to the fact that the economic aspect is one of the most important factors in administration. In the article published in the Market Watch, the main focus is the reduction of consumer prices in October. The said decrease in consumer prices by 0.5%, while a core inflammation was recorded to be 0.1%, the smallest recorded increase in an eighth-month period. The result that came up were attested to be comparatively positive than what was predicted to be CPI reaching a low of 0.2% while the core rate to be 0.2% (Nutting, 2006). The figures are known to be affected by the inflation strains. The trend that resulted in the said figure can be attributed to the continuing toll of the market reaction of decreasing foreign capital inflows in the United States. Although the figures that were presented can be considered as comparatively more stable that what was preconceived, the overall projection that can result from the said economic trend can be hazardous specifically to the overall market analysis and behavior of financial factors of the nation. The article presented essential data regarding the state of the US market in October. The result can be stated in the following: Energy prices down 7%, gasoline 11.1%, natural gas 7.7% Equivalent rent increased 0.4%; transportation decreased 3.1%; apparel down by 0.7% Medical consumption increased 0.3%; food increased 0.3% Net foreign capital from $97.1 B to $53.7 B, August to September (Nutting, 2006). The trend in the United States market can be attributed to the inflation that can be observed to have detrimental effects to the economic state of the country. Although the predicted trends fell below the real occurrence, the fact that the factors dictated a low performance economy and market due to inflation calls for policies to be applied by the leaders of estate. Another cause of alarm is the fact that the analysis of the data that are presented was criticized to have missed some points and that an alternative interpretation can reveal the underlying problem if increasing effect of inflation in the market and in the economy of the United States. In the light of the perceived probable effect, it is important to consider the policies that can be related to the monetary and market dynamics. The policies of the government regarding the dynamics that are involved in the market can be related to diverse and converging aspects. The resulting inflation the low performance of the market can be attributed to the different disasters that had struck not only the nation but the international community. In general, the events had greatly affected the nation. In response to the economic trials that was felt there are different suggestions that were given. These notions include assistance in the different funds and government allocations, taxes and tax incentives and other conditions that can be recognized that have possibilities of improving the state of the nation (Benanke, 2005). These forms of resolution can be deemed helpful for a short period of time. These are also needed to be undertaken as preliminary actions to the situation and for the rehabilitation of the nation through the calamities. Another policy that was perceived to be able to counteract the effects of the problems related to the economy is in relation to the employment and assistance that will be given by the government in relation to the people that are in great need of the source of livelihood (Benanke, 2005). In this aspect it can be considered that the policy that was initiated can be a challenge due to the fact that the said factor is greatly related to the economic capacity of the country. When one focus on the factors that revolves in economics it can be considered that the process is always a cycle, thus, difficulty can be encountered. The United States government also highlighted the importance of the tax related policies and the implementation. This is due to the fact that tax can be considered as the primary income of the government. In this aspect, in periods of difficulty in the economy, taxes are handles with importance and great care. In terms of the policies that were proposed, objective of the government can be analyzed through different factors. One is the aim for economic recovery which can be achieved through short-term actions. Another is for the stabilization and the improvement of the problems in the economy that has beset the nation as well as the international community. One example that can exhibit the objectives of the government is the establishment of tax relief as a permanent notion. This is to be able to provide for the needs of the country related to the fact that taxes can be considered as source of income for the government and the country. Although the policy on the stabilization of the tax relief as a permanent policy in the United States, it is essential to consider that the said resolution to economic problems can lead to changes on the economic aspects too. Due to the fact that there is an equal action that can be attributed the effects on the different industries. The action can benefit the economy of the nation as a whole but can have certain effects to the taxpayer and the people as a whole. The impact was lessened due to discounts, exemptions and other factors pertaining to the market. In relation a groups was appointed to be able to guide policies on the matter. C. International Trade and Economy One of the main focuses is the international trade in the actions of the government regarding economy. A continuous decline in terms of the stocks was being experienced by the United States in relation to the different countries and the economic factors. Although efforts regarding mergers and other industrial actions were undertaken by the economic sector to be able to improve the performance of the stocks in the market, the efforts failed (Wines, 2006). Some of the mergers that were undertaken are the Freeport-McMoRan Copper and Gold and its overtaking the Phelps Dodge Corp; the M & A Blackstone Group’s interest on the Equity Office Trust; and also the Russia’s Evraz over the Oregon Steel Mills. These are only some of the examples of the mergers that was perceived to improve the state of the US stocks in the international market but failed to do so. Although the performance of the economy of the US which is measured through the index was better (0.2%) than what was expected (0.3%) the behavior of the market can be conceived as a failing mark (Wines, 2006). In relation to the effect of the said problems and intensified by the failure of the conducted action, another policy was being suggested. The action that was conceived is the establishment of a new governance law. In the aim to ascertain a particular law that can create an ideal equilibrium between the most needed profit and output with the costs or input not only to large enterprise but specifically to the small enterprises. This is where the concept for the adaptation of the 2002 Sarbanes-Oxley rules of corporate governance came in (Schroeder, 2006). The particular law mainly focused on the internal financial stability of both small scale and large scale businesses. In relation to this, it is important to consider that the implementation of the said law will ideally improve the economy from within. This is mainly on the basis of the different corporate establishments and organizations that comprise and contribute to the economy of the nation. A law that is aimed to act on the basis of a cost effective manner can be considered essential to be able to improve international relation of the country and the performance in the market. The discussion on the possible implementation of the law also targets the need for greater participants in the market. The problem with the present trend in the market and the economic arena is related to the fact that the competing groups can be counted through a digit only. It means that less than ten major groups compete and participate in the market. Thus, the movement of these participants can greatly affect the market. An encouragement of more participants can be considered as one of the most important factor inclusive of the proposed implementation of the Sarbanes-Oxley Act (Schroeder, 2006). The objectives of the said policy can be considered as logical but it can be perceived as being obvious that the need for approval can raise questions on feasibility. A consideration of the fact that if this Act can be considered ideal to be able to commence and administer solutions to the economic problems and dilemma why was it not implemented earlier on. Implementation of such policy is important, but decision can be detrimental. Certain areas of the Act can be introduced and adopted through. The importance of the strength of the economy which can be implemented through the strengthening of the participants such as the small scale and large scale businesses can be considered essential to the nation. Such decision covers every other aspect of the industries such the employment, the benefits, and other related factors of the economy. There factors are also considered in the process of seeking solutions to the issues and problems of the economy. Summary The study that was conduct can be considered as a brief overview of certain aspects of the economy. The importance of the economic aspect in every system and organization can never be questioned. In this case, the economic aspect defines the strength of the every establishment, from the smallest financially operative unit towards the establishment and commencement of the policies of a nation, economy and economic policies can dictate the success of failure of the system and its management. Works Cited Bernanke, Ben S. The Outlook for the Economy and for Policy. President’s Council for Economic Advisers at the National Association for Business Economics, September 2005. Chrystal, K. Alec & Lipsey, Richard G. Economics for Business and Management. Oxford: Oxford University Press, 1997. Cypher, James M. & Dietz, James L. The Process of Economic Development. New York: Routledge, 2004. Nutting, Rex. Economic Report: Core inflammation eases to 0.1% in October. Market Watch, November 16, 2006. Ryan, Dave. EPA Enforcement Cuts Total Pollution by Record 3 Billion Pounds Over Last Three Years - Air Pollution Reductions Alone Result in Health Benefits of $3.5 Billion Yearly. US Environmental Protection Agency, November 15, 2006. Schroeder, Robert. Paulson calls for some Sarbanes-Oxley changes. Market Watch, November 20, 2006. Wines, Leslie. U. S. Stocks Turn Lower in Afternoon Action. Market Watch, November 20, 2006. Read More