Money, Business, Economy: The 3-Way Link - Essay Sample

Introduction

Money, business, and the economy are closely related. Companies are set up to give the owner money, while the situation of the economy will determine if the business will prosper or not. Arguing it from an economic perspective, there are numerous wants from people, companies and the government. However, the factors of production required to satisfy these wants are few as they include land, labor, and capital. The raw materials required will come from the area, and the money is the machinery needed to process the raw materials. On the other hand, people will be needed to handle raw materials, thus relating to labor. The overall state of businesses in each country depends on the economy of that country as it controls the activities taking place both internally or externally (Tapscott, 110-145).

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When there is favorable economic growth, there will be a fiscal dividend where the country will experience an increase in revenues and reduce government spending (Doherty). When an economy is desirable, the business tends to earn more profits, thus expanding its territories to the neighboring countries since they have enough capital to cater for all the expenses incurred. A stable economy will help increase the standards of living, thus reducing the causes of poverty and unemployment (Sarmiento, 234-256). When almost all the working-age personnel are employed, there is less dependency as well as no government spending hence the fiscal dividend. Assuming the economy is unfavorable, it would mean that the businesses will not be prospering thus would not require labor, thus resulting in unemployment and low standards of living. It's evident that when the economy not favorable, it affects the businesses, thus dragging the country behind and pushing potential investors away (Sarmiento, 234-256).

In a situation where the economy is unfavorable, the businesses will also suffer as they will not incur profits but instead will collapse. Assuming the economy of a country is not growing due to unstable conditions, and then the business people will not attract both the local and foreign investors (Stephany, 43-79). Arguing from a real-life perspective, no person would risk investing in an economy that one cannot predict about it in the future. A deteriorating economy will drag businesses behind as their people in that economy are not able to buy the products from the company (Doherty).

According to researchers, people are advised to avoid issues that are likely to drag behind the economic growth of their country. Concerns such as terrorism and political instability drag the economy behind. When terrorists continuously attack an economy, it will discourage people from setting up businesses in that place (Tapscott, 110-145). There are no customers to purchase their products or even investors who are willing to invest in a country that is continuously attacked (Stephany, pg 43-79). Several nations are known to be victims of terrorism, and political crashes thus are advised by experts to think about their nation's economy soon. If the issues of terrorism and political instability are addressed, then it is likely that the cases of the unstable or unfavorable economy will be history.

Conclusion

In conclusion, starting and running a business is not an easy task. Nobody can know the state of the economy in a given day or time hence the reason why business owners are referred to as risk-takers. The take the risk of setting up a business without knowing what waits for them the next day; hence 'The only strategy that is guaranteed to fail is not taking risks.'

Works Cited

Tapscott, Don, and Alex Tapscott. Blockchain revolution: how the technology behind bitcoin is changing money, business, and the world. Penguin, 2016.,pg 110-145

Stephany, Alex. The activity of sharing: Making it in the new sharing economy. Springer, 2015. , pg43-79

Sarmiento, E. "Book review: A world made for money: economy, geography, and the way we live today." Journal of Cultural Geography 33.2 (2016)., pg234-256

Doherty, Emma, Ben Jackman, and Emily Perry. "Money in the Australian Economy." RBA Bulletin, September Quarter (2018).