TITLE

UNDERSTANDING ECONOMICS AND HOW IT AFFECTS BUSINESS

GROUP 2 :

1. Mus Ida Hanifa (213403050003)

2. Devi Ratnasari (213403050002)

3. Amelia Rahmadania (213403040001)

4. Indah Tri Wahyuni (193403020012)

5. Hanifa (193403020002)

Teaching Lecturer : Drs Bolean Silalahi, M.M

UNIVERSITAS MPU TANTULAR

FACULTY OF ECONOMICS
ACCOUNTING MAJOR
2021/2022
 TABLE OF CONTENT

I. Explan basic economics

 Definition of economics
 Definition of macroeconomics and microeconomics
 Differents of macroeconomics and microeconomics
 Economics indicator
II. Explan what the capitalism is and how free market work
 Definition of free market and capitalism
 Four foundation of capitalism
 How free market work
 Compethition whitin free market
III. Compare socialism and comunism
 Definition of socialism
 Benefits and negative concequeen of socialism
 Definition of comunism
IV. Analyz the trend towards mixed economics and business cycle
 What is mixed economics
 What the benefit of mixed economics
 What are the four phase of business cycle
V. Contracs fiscal policy and monetery policy and explain each affect business
 Definition of fiscal policy
 What is importance of monetery policy to the economics
 What is economics ?

Economics is the study of how society chooses to employ resources to produce goods and

services and distribute them for consumption among various competing groups and

individuals.

 Defintion of macroeconomics

Macroeconomics is a branch of economics that studies how an overall economy—the

market or other systems that operate on a large scale—behaves. Macroeconomics studies

economy-wide phenomena such as inflation, price levels, rate of economic growth,

national income, gross domestic product (GDP), and changes in unemployment.

 Definition of microeconomics

Microeconomics is the study of decisions made by people and businesses regarding the

allocation of resources, and prices at which they trade goods and services. It considers

taxes, regulations and government legislation.

Microeconomics focuses on supply and demand and other forces that determine price

levels in the economy. It takes a bottom-up approach to analyzing the economy. In other

words, microeconomics tries to understand human choices, decisions and the allocation

of resources.

 Different of macroeconomics and microeconomics

macro
Area of study Macroeconomics studies the
whole economy, that covers
several market segments
Deals with Macroeconomics deals with
various issues like national
income, distribution,
employment, general price
level, money, and more
micro
Microeconomics studies the
particular market segment of
the economy
Microeconomics deals with
various issues like demand,
supply, factor pricing, product
pricing, economic welfare,
production, consumption, and
more.
 Business application It is applied to
environmental and external
issues.
scope It covers several issues like
distribution, national income,
employment, money, general
price level, and more
significance It perpetuates firmness in the
broad price level, and solves
the major issues of the
economy like deflation,
inflation, rising prices
(reflation), unemployment, and
poverty as a whole
limitation It has been scrutinised that the
misconception of composition’
incorporates, which sometimes
fails to prove accurate because
it is feasible that what is true
for aggregate (comprehensive)
may not be true for individuals
as well
It is applied to internal issues
It covers several issues like
demand, supply, factor
pricing, product pricing,
economic welfare, production,
consumption, and more
It is useful in regulating the
prices of a product alongside
the prices of factors of
production (labour, land,
entrepreneur, capital, and
more) within the economy
It is based on impractical
presuppositions, i.e., in
microeconomics, it is
presumed that there is full
employment in the
community, which is not at all
feasible.

 Economics indicator

Gros domestic Gross domestic product (GDP) is the total monetary or market value of all
produc (GDP) the finished goods and services produced within a country’s borders in a
specific time period
Unemployment rate Employment rates are defined as a measure of the extent to which
available labour resources (people available to work) are being used. They
are calculated as the ratio of the employed to the working age population

Concumer Price The Consumer Price Index measures the average change in prices over
index(CPI) time that consumers pay for a basket of goods and services(Consumer
Price Index (CPI)
GNP GNP is the market value of goods and services produced by all citizens of
a country—both domestically and abroad.

 Definisi free market and capitalism

Free market free market is a system in which the prices for goods and services are
self-regulated by buyers and sellers negotiating in an open market.
capitalism Capitalism is an economic system based on the private ownership of
 the means of production and their operation for profit.
 The foundation of capitalism

The right to own Private ownership mean individu can buy,sell,use land ,building
private property machinery ,invention and other from property ,they can also pass
property to their childern
The right to own That profit equal revenue minus expens(salaries,material,taxes)profit
business and keep all act importan incentive for business own
that buseness profits
The right to freedom Within certain guidelines estabilish by the government ,individual s
of competation are free to compite with other individuals or business in selling and
promoting goods and service
The right to freedom People are free to choose where they want to work and what carrer
of choice they want to follow

 How free market work

Free market is one in which buyer and seller negotiating price for goods and service

influence the decisions about what get produce and in what quantities ,when buyer

demand more goods ,the price goes up ,signaling supplier to produce more .the higer the

price the more goods and service supplier are willing to produce ,price is the mechanism

that allows free market to work.

 Competition whitin free market

perfect competition The degree of competition in wich three are many seller in a market
and none is large enough to dictate the price of a product
Monopolish monopolistic competition, many sellers offer differentiated products
competition —products that differ slightly but serve similar purposes. By making
consumers aware of product differences, sellers exert some control
over price
oligopoly oligopoly, a few sellers supply a sizable portion of products in the
market. They exert some control over price, but because their
products are similar, when one company lowers prices, the others
follow.
Monopoly monopoly, there is only one seller in the market. The market could be
a geographical area, such as a city or a regional area, and does not
necessarily have to be an entire country. The single seller is able to
control prices.
 Definisi socialism

An economic system based on the premise that some ,if not most ,basics bussiness should

be owned by the government so that profits can be more evenly distribute among the

people.

 Benefit and negative concequen of socialism

benefite negative
The major benefit of socialism is supposed Socialism is that it lower the incentiveto start a
to be social equality ,ideally it come about buseness or to work hard socialis economics
because the government taxes income from tend to have a hinger unemploeyement rate and
wealthier people in the from taxes and a slower growth rate than capitalism economics
redistribute it to poorer people through
variousegoverment programs ,free
education through collage ,free health care
and free child care are some of benefit
socialism government using the money
from taxes my provide to their people.

 Definition communism

an economicand political system in which the government makes almost all economics

decisions and owns almost all the major factor of productions.

 What is mixed economy

a mixed economy is part capitalism and part socialist ,some bussenes are privately

owned, but taxes tend to be high to distribute income more evenly among the population

 What are the benefit of mixed economic

a mixed economic has most of the benefit of wealty creation that free market bring plus

the benefit af greater social equality and concern for the efiorment that socialism

promises
 What are the four phases of business cycle

Boom an econoomic boom is just what it sound like businesss is booming

recessions in two or more consecutive quarter of decline In GDP in a recesion
price fall ,people purches fewer product and buseness fail,recession
bring high unemploeyment ,increased bussiness failures ,an a overall
drop in living standar
depression in a savere recesions ,usually accompained by deflation ,buseness
cycle rarely go through a depresion phase ,in a fact ,while there ,In
fact ,while there were many business cycle during the 20 th
century,there was only one severe depressions 1930s ,nonetheless
some economics are predicting a depressions in the coming years
Recorvery A recorvery accours when the economics stsbilizes and starts to grow
,this eventualy leds to an economics boom ,starting the cycle all over
again .

 What is fiscal policy

Fiscal policy consist of government efforts to keep the economy stable by increasing or

decresing takes or government sepending.

 What is importance monetary policy to the economics

Monopoly policy is managemen of a money supply and interest rates. when

unemploeyment gets to high ,the federal reserve bank /the fed may put more money into

the economics and lower interest rates .that is supposed to provide a boost to the

economics as a bussiness borrows and spend more money and hire more people.