Exercise 5-4 Perpetual: Income Effects Of Inventory Methods Lo A1

Posted By Admin @ Mar 02, 2022

Tittle: Report on Business and the Environment of the Aldi

Type: Report

Subject: business

APA

1. Introduction of Business and the Environment of the Aldi

             Economics is a study of the consumption of goods and services, distribution, and production. In each country, economic condition is different because of the difference in trading and consumption behavior, government interventions, and national income. The macroeconomic environment of a country draws an impact on the overall lifestyle of citizens and business outcomes in the country. Organizations perform in the country and generate an impact on the overall national economy. Thus, the national economy and businesses both have an impact on each other. Present work is consist of analysis and assessment of the national economy and businesses of the Aldi (retailers). Present work will discuss the business type, legal structure, organizational objective, and business strategy of Aldi.

2. National Economy of Business and the Environment

           The term national economy is a widely discussed term that represents the economic-related information of a country or state. National economics cover several areas relevant to the growth and stability of the economy. National economics cover areas such as economic growth, inflation, employment and unemployment, and balance of payments. Analysis of national economy presents that macroeconomic indicators can provide adequate information concerning with the national economy. The macroeconomic indicators are the balance of payment, rate of inflation, economic growth, and level of output. Basically, all these macroeconomic indicators have the primary function to provide detailed information and numerical information about the condition of the national economy. Increase in the rate of unemployment can definitely create a bad impact on the national economy. Thus by measuring the unemployment level, we can predict the condition of the national economy. Concluding all analysis in a brief we can say that the national economy term is the representation of the economic condition of a nation in the specific duration.

3. Reasons for Government Intervention in an Economy

          The government has a major impact on the economy by the development of economic policies in the country. The government gets involved in the economic market with different methods including state production, financial interventions, state production, income transfer, and regulations. The government needs to monitor operations in the market to ensure the quality of the offered products to the citizen for the reason government use regulation. The assessment indicates that another major reason for government intervention in the economy is to control activities, monopoly, and prices in the market. For this purpose, the government takes the assistance of financial interventions. Whenever the government fails to regulate markets appropriately it causes to fail the whole national economy.

 The major reasons for the Government to take its policy intervention in an economy are (Bénassy-Quéré & Pisani-Ferry, 2018) such as:

• In order to correct the market catastrophe

• In order to accomplish a further justifiable distribution of both wealth and income

• In order to enhance the economic performance

For types of interventions performed by the Government are described on the table below

Market Consequence Market Failure Government Intervention

Immobility aspect Operational unemployment Government investment in training and education

Public products The market is failed to deliver pure public products Government subsidies the public products for a huge public consumption

Failing products Over product’s consumption along with the adverse externalities Government advertisement for proper product’s consumption

Quality products Products’ under consumption with progressive externalities Government subsidies

Monopoly appearance in a market Loss of allocative effectiveness due to higher prices Government’s policy regarding competition

4. An evaluation of market structures and how they influence business

             Market structures basically consist of different structure including monopoly, monopolistic competition, perfect competition, and oligopoly markets.

• Perfect Competition Market Structure

The perfect competition-based market provides the opportunity to the firms to provide the best possible product or service for the targeted customers and society (Dransfield, 2013). The perfect competition also encourages businesses to bring up some innovative outcomes with a competitive advantage. This perfect competition market structure is actually a hypothetically ideal structure of market, in which there are free access and exit which enable the businesses to enter the market effortlessly and exit the market when they found out that the market is not profitable. Examples for the businesses in this perfect competition market structure are agricultural and craft businesses.