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Chapter 2

Chapter 2 - How Economic Issues Affect Business

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Department
Commerce
Course
COMMERCE 1E03
Professor
Rita Cossa
Semester
Winter

Description
Chapter 2How Economic Issues Affect BusinessA major part of business success is due to an economic and social climate that allows businesses to operate freelyWhat is economics Economics the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals Ballard power systemsworking with auto manufacturers to develop the next generation of efficient and clean engines for buses automobiles and trucksMacroeconomics the part of economic study that looks at the operation of a nations economy as a wholeMicroeconomics the part of economic study that looks at the behavior of people and organizations in particular marketsResource development the study of how to increase resources and the creation of the conditions that will make better use of those resources eg recyclingMariculture the farming of aquatic plants and animals in land based tanks and ponds or in sea cagesGrowth economics and Adam Smith Adam Smithone of the first people to imagine a system for creating wealth and improving the lives of everyoneRather than thinking fixed resources had to be split up between everyone he envisioned creating more resources so that everyone could become wealthier An Inquiry into the Nations and Causes of the Wealth of Nationslater considered the foundation of the study and understanding of the newly developing capitalist industrial society Adam Smith believed that freedom was vital to the survival of any economy especially the freedom to own land or property and the freedom to keep profits from working the land or owning a business He made the desire for improving ones condition in life the basis of this theory How businesses benefit the communityPeople work primarily for their own prosperity and growthYet as people try to improve their own lives Smith sad their efforts serve as an invisible hand that helps the economy grow and prosper Invisible hand the process that turns selfdirected gain into social and economic benefits for all Smith assumed that as people became wealthier they would naturally reach out to help the less fortunateNot always been the case so government regulation in the public interest has always been required
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