Applied Eco - FINALS

• Macroeconomic goals of a country


  • Efficiency in the pursuit of economic goals
  • Eliminate poverty
  • Provide employment
  • Reduce inequality
• Economic Growth


  • Measured through Gross Domestic Product (GDP)
  • Characterized by the upward and downward trend of GDP observed over a period of time, usually years
  • Illustrated through the production possibility frontier (PPF)
• Full Employment


  • Characterized by zero cyclical unemployment
  • Unemployment as a result of the business cycle is known as cyclical unemployment
• Price Stability


  • Absence of prolonged inflation and deflation
  • Inflation has negative consequences
  • Deflation contracts the money supply and limits liquidity
• The Philippine economy has been experiencing growth since 1999 as evidenced by higher year-on-year GDP
• Macroenvironment factors


  External forces that influence organizations and which firms have no control over
• Microenvironment factors


  Internal factors that impact only a certain industry
• PESTLE approach


  Tool for macroenvironment analysis, covering political, economic, social, technological, legal and environmental factors

  
• Political Factor


  Government rules, laws, and fiscal policy changes that influence an industry or organizations
• Tax Reforms


  Revisions on the implementation and collection of taxes, including increasing and lowering of existing tax rates as well as implementation of new ones
• Government Spending


  • Part of fiscal policy, monitored to ensure it remains within the budget
  • Budget surplus when tax revenue is greater than spending
  • Budget deficit when government has to finance spending through debt
• Political Stability


  Strength and effectiveness of the government in upholding its sovereignty and implementing the rule of law
• New Government Regulations


  Regulations to streamline procedures and improve the ease of doing business have a positive impact on business
• Economic Factor


  Overall economic state of the country that influences the success of local industries
• Gross Domestic Product (GDP)


  • Measure of a country's economic performance
  • Growth in GDP means an increase in total output from previous period
  • Steady GDP growth signifies a strong and stable economy
• Inflation


  • Loss in value of money
  • High inflation rates erode the purchasing power of consumers
• Interest Rate


  One of the central bank's most effective monetary policy tools
• Foreign Exchange


  Value of peso in terms of another currency like the US Dollars, managed by the central bank
• Social Factor


  Importance of culture, population, and other social determinants to the business environment
• Demography


  Study of the population and its attributes, including gender, age, growth rate, mortality rate, income levels
• Lifestyle and Trends


  Growing trend for consumers to lead a fit and healthy lifestyle, use of organic ingredients
• Religion


  Belief customs and religion that may affect the macroenvironment of industries
• Technological Factor


  Trends in technology and development that present opportunities for businesses
• Innovations


  Largely driven by continuous technology development research, such as the advent of the internet
• Research and Development (R&D)


  Backbone of innovation, investment in technology means investment in R&D
• Technology-related Legislation


  Implications of new government agencies and partnerships with the private sector to improve the ICT environment
• Legal Factor


  New regulations and government mandates that influence operations of businesses
• New Regulations


  Labor as an important input of production, businesses trying to cut corners to save cost
• Environmental Factor


  Natural resources as fixed inputs of production, with growing population sharing the available resources
• Environmental Regulations


  Laws created and implemented by the Department of Environment and Natural Resources (DENR) to protect the environment
• Climate Change


  One of the most pressing environmental issues, connected to recent natural catastrophes such as typhoons, flash floods, earthquakes, volcanic eruptions, storm surges
• Republic Act. 8749 Clean Air Act
• Republic Act. 9275 Clean Water Act
• Republic Act. 9729 Climate Change Act
• Republic Act. 9512 Environmental Awareness and Education Act