Dynamics of Business Chapter 1 Paper

Dynamics of Business

# Paper 1.

In chapter 1, I learned about basic economics and economic system, including the significance of key economic indicators, especially GDP (Gross Domestic Product), the unemployment, and fiscal and monetary policy. Those are the basic elements of economics when economics of any countries would be explained. I would like to describe about the definition of these terms first. GDP is literally Gross Domestic Product. It means to gauge the total dollar value of all goods and services produced in a country over a specific time. It includes the goods and services produced by foreign-owned companies, which is located within the country. Also it is so much important to know GDP of own nation. This is because every economic is based on GDP. If GDP is in high range, the standard of living is in high range as well, which means citizens can more enjoy their lives. Before defining the unemployment rate, we should know who is an unemployed person. It is someone who is seeking to work, but does not have a job. Based on the definition of an unemployed person, the unemployment rate refers to the percentage of the total unemployed people. Lastly, there are fiscal and monetary policy. Fiscal policy refers to the federal government’s control of economic activities, using taxes, government spending. Monetary policy refers to control both of the money supply and interest rates in order to promote the growth of economies. When the economy is booming, the Fed decreases the money supply. It causes to decrease interest rates. On the other hands, when the economy is depressed, the Fed increases the money supply. It has an impact in pulling up interest rates.

I choose a country in order to describe these terms easily. I choose Sweden, which is an exported-oriented economy. According to Trading Economy(2013-2014), GDP of Sweden from 2013 to 2014 are 579.7 billion USD (2013) and 570.59 billion UDS (2014). It shows that GDP is falling down. It could be found from the growth of GDP. 2013 is 1.6% and 2014 is 2.1, which means Sweden’s growth of GDP is slow. The reason why Sweden has slow growth is that low interest rates lift the country out of a long period of slow. Also, here is the unemployment rate of Sweden. According to Trading Economy(2013-2014), the unemployment rates published in January, 2013 are 7.9% and the unemployment rates published in January, 2014 are 8.1%. The figures of the unemployment rates are rising little by little. The key fiscal policy of Sweden is distributions welfare in the short and long term. So the council of Sweden is trying to mix diverse fiscal policy. According to the Riksbank(2013-2014), which is Sweden’s central bank, in April, 2013, repo rate is 1.00 and deposit rate 0.25. Compare to 2013, in April, 2014, repo rate is 0.75 which means repo rate decreased and deposit rate is 0.00, which means deposit rate is increased. That is all of my research on the Economics of Sweden.

Look at my own country: South Korea. What business circle is my country? We have been gone through a depression in 1997. After a depression, we are going toward a recover. So I think a recovery, but not a perfect recovery. This expression is somewhat weird. This is due to rapid industrialization. Economics of South Korea has been growing up rapidly for about 50 years, contrary to other countries. It influences on growing GDP up gradually. According to Trading Economy(2013-2014), GDP of South Korea in 2013 is 1305.6 billion and 2014 is 1401.68. Indeed, during few years, the unemployment rate is falling down little by little, which refers South Korea is not going to being in recession or depression. However, in terms of stabilization of economy, it is not. Because of not good stabilization of economy, many businesses are discouraged. I think if economy of