Macro economics

Economic environment

It shows the state of the nation's economy, which is how corporate organizations function. It constantly and significantly affects business. Economic policies (trade, industrial, fiscal, and monetary policy), national income, production, inflation, interest rates, savings, investments, prices, foreign exchange rates, and the market system are all included. A favorable economic climate is an opportunity. Increasing circumstances = threats Macroeconomic factors (those that have an impact on company decisions and the macroeconomic climate) (those that affects an entire economy and all of its participants)

Economic system

It is a system of resource distribution in a society as well as the production and exchange of commodities and services. The underlying problem that all people and nations face is scarcity. Not everything we ask for can be granted. The fundamental economic difficulty that has faced people and countries throughout history is how we manage these constraints, that is, how we prioritize and distribute our constrained resources like money, time, and other resources. Different countries have approached this problem in different ways. Different overarching economic strategies have been created by societies to manage their resources. Although traditional, command, market, and mixed economic systems are generally recognized by economists as the four fundamental types of economic systems, there is some disagreement on which system best tackles the problem of scarcity. Generally speaking, it falls into three types;

• Free market economy:
  • It is sometimes referred to as a free-market economy. It is an economic system in which private individuals own a major portion of the ownership and control over resources and the production of goods. Individuals make all decisions relating to investment and the use of the means of production. What is produced is determined by the market. In this economy, maximizing profits is the primary objective. Government involvement is minimal. Public products are produced at the behest of governments. One of the most well-known examples of capitalism is the United States.
• Centrally planned economy:
  • Additionally referred to as a command or collectivist economy. an economic system where the majority of the resources and production equipment are owned and controlled by the public The state (government) decides what should be produced, how it should be produced, and who should receive it. All economic activity is governed by the government. Investment is carried out through state-directed procedures. The state determines how to use and distribute resources. Cuba, China, and North Korea are still holding on to their planned economies.
• Mixed economy:
  • It combines elements of a free market and a government-run economy. Demand and supply factors in the market decide some prices, whereas governments set other prices. What is created is influenced by both the government and the public. While the public sector seeks to enhance societal welfare, the private sector's goal is to maximize profits. The public sector fills the gap left by the absence or unwillingness of the private sector by producing goods and services.

Nepalese economy

The mixed economic structure that exists in Nepal Both the public and private sectors actively participate in economic activity and own the means of production. However, the private sector's influence has grown.

Dimensions of economy:

The population's size and pace of growth, income level and distribution, natural resources, agricultural and manufacturing activities, level of urbanization, etc., all affect a nation's economy's structure. All of these factors are connected. Below is a brief explanation of each of an economy's four structural dimensions.

• Economic dimension:
  • It reveals the purchasing power and consumption habits of the populace. A country's economic performance can be measured using a variety of metrics. Measures of overall outcomes in terms of output, prices, and employment are included in the concept of internal economic performance.
• Socio- economic dimension:
  • It offers information on population size and shows the demographic make-up of a nation. A potential market must include enough individuals with the financial capacity to purchase a product.
• Industrial and Agricultural Dimension:
  • This shows the country's capacity to produce things, provide services, and import raw materials. The capacity to offer goods, services, and raw materials to consumers and industrial units on the domestic as well as international markets increases with the strength of the industrial and agricultural foundation.
• Economic Development Dimension:
  • This component, which represents economic growth plans, is called the economic development dimension. It outlines general socioeconomic development policies, plans, and the process for allocating resources across various economic sectors.

Dimensions of Nepalese Economy:

It is made up of numerous economic sectors that support the overall economy. The significant economic sectors and their contribution to GDP in 2011 were as follows:

• Agricultural sector (36%)
• Industry Sector (7%)
• Service Sector (57%)

Agricultural Sector:

• The agricultural industry in Nepal includes several types of livestock, food crops, cash crops, forestry, and fishing.
• Agriculture commodity quantity index climbed from 100 in 2001 to 133 in 2011. (signifies a slow rate of growth) Fruits (187.2) and vegetables (190.7) have the highest growth rates when compared to other crops.
• Agriculture's share in the overall GDP is dwindling.
• In 2009, it reached 33%, or 1/3 of the entire GDP.
• About 17% of all exports from Nepal are agricultural-based.
• Still a significant source of work, with 74% of people employed ( labor force survey 2008)
• Major problems:
  • Low productivity: subsistence oriented
  • Poor quality
  • Weather dependent
  • Lack of innovation and technology
  • Poor policy

Industry Sector:

• It involves the use of tools or human labor to change raw materials physically or chemically into a new product. The following five sub-sectors comprise the manufacturing sector.
  • Food, beverage, and tobacco
  • Textile and garment
  • Chemicals
  • Mechanical engineering
  • Electrical and electronics
• Major problems:
  • Low productivity: subsistence oriented
  • Poor quality
  • Weather dependent
  • Lack of innovation and technology
  • Poor policy

References:

• colorado.edu/economics/courses/econ2020/section7/section7-main.html
• docfoc.com › Documents
• es.scribd.com/doc/302654055/Project-in-Economics
• gnospuddulte.ugu.pl/free-essays-economic-systems.html
• investopedia.com/terms/m/macro-environment.asp
• steelerslounge.com/2016/01/types-of-economic-systems/179600/