Businessman mainly look at the following macro economic parameters:
Economic growth rate: Growth rate of the economy is a crucial factor in business decision making. Economies with high growth rates will attract investment because they will experience rising income and rising demand for goods and services. This is a favourable environment for business.
Economic policies: Businessmen will favour investment-friendly economic policies. Regulation is necessary. But too much regualtion and restriction will lead to harassment of business. Inspector Raj will drive away investment. In the modern days, regions are competing to attract investment by formulating business-friendly economics policies.
Taxation: Within economics policy, taxation is very important. Excessive levels of taxation will drive away investors. Global experience is that countries that followed low levels of taxation achieved faster economic growth in the long run.
Trade Policy: Business will require imports of capital goods, technology and other input, This will require a liberal import environment with minimum restrictions on imports.
Exchange rate policy: In this era of globalization, countries complete to attract capital. If there are restrictions on capital movements and controls on exchange rate, it will not be regarded as business-friendly environment.
Availability of human resources: Human resources, their availability and cost are important factors in business decision making. If human resources are available in plenty and their cost is reasonable, that can be very favourable for business.
Market: The size of the market is an important factor. This, in turn, depends on the size of the population. per capita income and rate of growth of income.
Price stability: Mild inflation is good dor business: but hyper inflation will cause economic and social instability. Therefore, price stability is an important macroeconomic equirement for business growth.
Macro economic stability: Two important macro economics parameters that indicate the health of the economy are fiscal deficit and current account deficit. If these two deficits exceed the limits, that will endanger the health of the economy. leading to server economic crisis. Therefore businessmen look at these macro indicators before business decision making.
Political stability: Political stability is an important macro feature. Investors would be reluctant to invest in counties characterized by high level of political instability, particularity in developing economies. Political changes should not cause changes in economic policies. In fact, more than political stability, stability in policy is important
Economic growth rate: Growth rate of the economy is a crucial factor in business decision making. Economies with high growth rates will attract investment because they will experience rising income and rising demand for goods and services. This is a favourable environment for business.
Economic policies: Businessmen will favour investment-friendly economic policies. Regulation is necessary. But too much regualtion and restriction will lead to harassment of business. Inspector Raj will drive away investment. In the modern days, regions are competing to attract investment by formulating business-friendly economics policies.
Taxation: Within economics policy, taxation is very important. Excessive levels of taxation will drive away investors. Global experience is that countries that followed low levels of taxation achieved faster economic growth in the long run.
Trade Policy: Business will require imports of capital goods, technology and other input, This will require a liberal import environment with minimum restrictions on imports.
Exchange rate policy: In this era of globalization, countries complete to attract capital. If there are restrictions on capital movements and controls on exchange rate, it will not be regarded as business-friendly environment.
Availability of human resources: Human resources, their availability and cost are important factors in business decision making. If human resources are available in plenty and their cost is reasonable, that can be very favourable for business.
Market: The size of the market is an important factor. This, in turn, depends on the size of the population. per capita income and rate of growth of income.
Price stability: Mild inflation is good dor business: but hyper inflation will cause economic and social instability. Therefore, price stability is an important macroeconomic equirement for business growth.
Macro economic stability: Two important macro economics parameters that indicate the health of the economy are fiscal deficit and current account deficit. If these two deficits exceed the limits, that will endanger the health of the economy. leading to server economic crisis. Therefore businessmen look at these macro indicators before business decision making.
Political stability: Political stability is an important macro feature. Investors would be reluctant to invest in counties characterized by high level of political instability, particularity in developing economies. Political changes should not cause changes in economic policies. In fact, more than political stability, stability in policy is important
