Effect of Macro-economics on companies Essay Example

continued economic output increase in the United States, albeit slower than the previous year, the emerging markets still make the biggest contribution to global growth.

The government's implementation of Fiscal and Monetary Policies in Germany and China has significant implications for Brayer Business. These policies are essential tools for achieving macroeconomic objectives by regulating aggregate demand levels, ultimately aiming for economic growth, price stability, and full employment. The government modifies economic activity and aggregate demand through modifications to taxation rates and government expenditures.

The overall influence on Brayer's operations and performance primarily stems from macroeconomic factors, although there may be some impact on sectarian levels. Germany and China are significant exporters, specifically in the manufacturing industry. Despite China's domestic market growth, government fiscal and monetary policies will still affect Brayer's operations and performance.

It is crucial for Germany to adhere to the policies of the European Central Bank (CB) due to its significant size and importance within both the Eurozone and European Union. The CB's Governing Council may operate under the belief that what benefits Germany will also benefit the rest of the SEC (Eurozone). However, the CB's decisions only moderately align with German economic interests. Despite having an economy only a quarter of the size of that of the US in terms of volume, Germany's exports are almost as high as those of America.

Germany's vulnerability to changes in demand for exports from other countries is emphasized by its trade-to-GDP ratio of 87.4%. Although Germany has a significant surplus in trade balance with partner nations, it accumulates debt and invests heavily in Greek debt. CB countries such as Spain and Portugal have budget deficits

and import German products extensively. In order to maintain growth amidst weak domestic demand and low wage inflation, Germany purchases debts while relying on export growth to offset the situation.

If CB countries default on their debts, Germany's debt and export market will suffer. This was not a worry when the economy was thriving but the financial crisis has made it one. Inflation is high in CB countries and they are at risk of debt defaults. As a result, Germany may experience a decline in its exports which would also impact Brayer. At the same time, China is concentrating on implementing an active fiscal policy to promote economic growth along with a cautious monetary policy to control inflation and maintain price stability.

In order to create more job opportunities, the Chinese government has sought to modify the taxation system by reducing structural taxes for impasses. This move is aimed at encouraging public consumption and incentivizing companies to invest.

In response to the 2008 global financial crisis, the world's major economies have implemented measures such as the quantitative easing program from the United States and the European Central Bank's "unlimited" bond-purchasing program, colloquially known as "printing money."

China's excess money has resulted in a significant increase in inflation and potential risks that demand more attention. According to the 2011 statistics from the World Bank, China ranks tenth among nations with the greatest surplus ratio, while the global average is 126%.

The primary cause of the European debt crisis is the excessive printing of money by central bank countries and an unfavorable money supply to GAP ratio. Additionally, a comparative analysis was done on the macroeconomic factors

of Germany and China, which have implications on the Brayer GAP of both nations. In 2013, the GAP of Germany was valued at 3634.82 billion IIS dollars, making it the largest economy in Europe, fourth largest by nominal GAP globally, and fifth-largest by GAP Purchasing Power Parity (POP) - representing 5.86% of the world economy.

The Euro crisis is expected to have a detrimental effect on growth rates, resulting in limited growth of approximately 2% for the global economy and developed economies like Germany.

China's GDP increased by 7.8% in 2013, reinforcing its standing as the second-largest economy worldwide. Due to China's high GDP per capita and considerable size, it is an appealing destination for foreign businesses such as Brayer that benefit from China's position as a manufacturing hub for exports. Brayer and other multinational corporations primarily cater to the export-oriented industry in both local and global markets. The rise of interest rates in countries like Germany will affect not only Germany but also other nations under the Central Bank.

Fluctuating prices can cause different consequences, such as modifying the cost of living, impeding citizens' access to loans, elevating borrowing expenses and mortgage payments while discouraging savings in favor of spending. Not only consumers but also companies like Brayer suffer from escalating interest rates and government debt interest repayments. Inflation is a likely outcome when goods and services are traded at a higher-than-real value. Additionally, there is a necessity to boost wages.

Various factors contribute to inflation, such as the escalation of fuel prices in worldwide markets, increased costs from importing manufactured goods, and the domino effect of price hikes in related products.

Moreover, consumer behavior and tendencies are significantly influenced by high inflation rates.

Brayer is facing difficulties predicting the future and accurately calculating prices and returns from investments due to the wide fluctuations in the inflation rate during a high inflation period. If China continues to have a higher rate of inflation for a considerable period of time, its exports will become less price competitive in world markets. As a result, export reduction and fewer jobs may occur, which could also negatively impact Brayer's business performance.

China faced a notable rise in inflation during 2008 due to the escalating costs of fuel and food, resulting in an inflation rate of 7.1%. However, the government took action to tackle this problem by implementing measures aimed at managing inflation.

Brayer's worldwide presence extends to other developing economies, which must consider several factors like manufacturing expenses, imports and exports (including visa and tax implications), supply chains, demand chains, and overall costs that affect the global economy. Moreover, in the past month, Germany's Federal Statistics Office has observed a significant reduction in industrial production, exports, business confidence levels, and factory orders.

Unemployment may arise due to a reduction in the overall demand, especially if the production cost is high.

China's reported unemployment rates only account for formally registered urban workers, which excludes the vast majority of migrant workers totaling 230 million living in cities. Despite this discrepancy, skilled workers remain sought after in China's new economy, posing a challenge for Brayer when hiring them. Meanwhile, Germany's highly unionized workforce presents the problem of redundancy. To influence the economy, one tool available to the central bank is adjusting interest rates

either up or down to affect consumer spending and investment opportunities.

The impact of increased interest rates on overall demand is complex. At first, they discourage borrowing by households and businesses and encourage saving instead. Additionally, they reduce disposable income for property owners by raising mortgage interest payments, limiting their spending power. Higher borrowing costs also decrease business investment and make planned projects unprofitable, leading to a drop in aggregate demand. In contrast, Germany and the entire Eurozone use low interest rates as a strategy to stimulate economic activity.

China has taken its second step towards avoiding an overheating economy by increasing interest rates for the second time since mid-October.

Germany's trade surpluses persist due to its robust export industry consisting of automobiles, machinery, chemicals, hardware, electronics, metals and pharmaceuticals.

The US and MIFF express concern over the utilization of exchange rates by nations reliant on exports, such as Germany and China, to boost their competitiveness instead of promoting domestic demand. This tactic may result in unfavorable repercussions for other economies and contribute to worldwide trade imbalances.

China is striving to globalize the renaming trend, which is gaining momentum. In light of potential fluctuations in interest rates resulting in decreased domestic and export sales, companies such as Brayer must exercise caution when investing in China. An examination of the market structure in Germany and China shows that Brayer HealthCare operates in an oligopoly market, while Brayer Materialistic, which specializes in high-end polymers, competes in an oligopoly market despite commodity polymers being a contestable market.

In Germany, there are strong anti-trust laws, low barriers to business entry, and the development of common standards that promote exports.

The chemical industry in Germany is largely composed of medium-sized companies, although there are a few larger companies such as BASS, Brayer, and Hooch's. Pharmaceutical companies like Brayer have been operating in a tightly regulated market for many years. Due to their success in inventing and marketing medicines over the last century, they have become highly regarded contributors to national economies.

Despite facing challenges in China with its unclear legal system and bureaucratic regulations, Brayer continues to be a major player in both Germany and China. The company maintains its position by focusing on patents for new drugs and implementing measures such as drug price controls, tougher safety law enforcement, and post-market monitoring regulations. Although the entry barrier for generic drugs is low after the patent period ends, Brayer remains competitive in the market.

The government manipulates the oligopoly in China.

Brayer finds China to be a highly competitive market where opportunities for international investment exist.

While China's future development will differ from its past model, meeting the demands of its prosperous consumers will remain crucial for growth. Brayer acknowledges that investing in China is essential to fuel expansion due to its significant size and consistent 10% average growth over the past thirty years. Despite caution being necessary, Brayer views China as an indispensable economy deserving attention. The company has already made substantial investments in China and should continue doing so while opportunities to improve production capacity remain.