Chapter_2 - Business Management A Malaysian Perspective Oxford University Press Malaysia 2008 All Rights Reserved 2 1 CHAPTER Influence of

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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 1
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 2 Influence of Economics on Business CHAPTER
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 3 At the end of this chapter, students will be able to: LEARNING OBJECTIVES ± Explain the major differences between a free market system and a centrally-planned system. ± Discuss why many economies of the world have adopted the mixed economic system. ± Explain how a free market works. ± Elaborate on the different types of market structure. ± Relate the impact of economic growth, unemployment, inflation and globalization on businesses. ± Define fiscal and monetary policy and explain how they are used by the government to regulate the economy.
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 4 INTRODUCTION TO ECONOMICS Economics as a study of scarcity and choice. Scarcity – a situation whereby human wants/needs are forever greater than the supply of time, goods and resources. The two branches of economics: microeconomics and macroeconomics
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 5 FACTORS OF PRODUCTION Land Labour Capital Entrepreneurship
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 6 ALL ECONOMIES HAVE TO ADDRESS THREE ISSUES: What goods and services to produce? How to produce the goods and services? For whom are these goods and services going to be produced?
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 7 EARLY ECONOMIC THEORIES Malthus Economic Theory Control the population so that people are able to enjoy more goods and services. Adam Smith’s Economic Theory Wealth creation among individuals is healthy and it will improve the lives of everyone. Freedom to accumulate wealth and make profits are vital for the survival of an economy.
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 8 ECONOMIC SYSTEMS The free market system The centrally-planned system The mixed system
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 9 FREE MARKET SYSTEM Also referred as capitalism. A system where all economic decisions are taken by individual households and firms with no government intervention.
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 2– 10 Individuals have four basic rights: FREE MARKET SYSTEM (CON’T) 1. To own private property. 2. To own a business and keep all its profits
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This note was uploaded on 02/03/2012 for the course IT 2010 taught by Professor Mohd during the Spring '11 term at Multimedia University, Cyberjaya.

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Chapter_2 - Business Management A Malaysian Perspective Oxford University Press Malaysia 2008 All Rights Reserved 2 1 CHAPTER Influence of

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