Business Environment Essay Example | Topics and Well Written Essays - 3500 words

Business Environment - Essay Example The total of the gross added value in various activities related to the economy is referred to as GDP at factor cost. The sum of the indirect taxes and GDP at factor cost subtracted from subsidies will give GDP at producers’ price. According to the income approach, GDP is calculated by summing up the incomes that firms are required to pay to the households for providing the production factors namely wages, interest, rents as well as profits. Inflation: Inflation is defined as the continuous or sustained rise in the general level of price. It can also be defined as continuous reduction in the value of money. The movement in the general price level is referred to as inflation. The changes in the price level of goods and services purchased by the households are measured by Consumer Price Index (CPI) and the Producers’ Price Index (PPI). The CPI can be calculated as the ratio of updated cost and price of the base period multiplied by 100. The second measure that is producer price index measures the average changes in prices as received by the producers for the products. Unemployment: Unemployment or joblessness occurs when individuals are actively looking for jobs but are not able to find it. The rate of unemployment is calculated by dividing the number of unemployed in the total labor force usually in percentage form. The International Labor Organization provides four methods on measuring the unemployment rate. The most preferred method of unemployment rate calculation is Labor Force Sample Surveys. Surveys provide the most comprehensive results and contribute in calculation of unemployment according to groups. The official estimates are calculated from the combination of information from the other methods. Social Insurance statistics is computed by the number of persons insured for the benefits and the number of insured persons collecting benefits. The balance of payments: Healthy balance of payments situation is ideal to attract investments. The investments can be used in diverse activities in up gradation of technology. The technological