Government borrowing, government budgets and fiscal policy impact Assignment

Government borrowing, government budgets and fiscal policy impact - Assignment Example 2. The government often increases its spending to expand an economy. In this situation, the actual deficit for the year is less than the forecasted amount. This shows that the government spending was less than expected; however, the revenue was more than the forecasted value. This indicates a surplus in the budget, and this implies faster economic growth. Yes, this is a problem in trying to balance the budget as the forecasted amounts vary widely with the actual expenditure and revenues. 3. Poor economic growth resulting in things such as unemployment could be caused by contraction of the country’s economy this can be corrected by the putting an expansionary fiscal policy in place. This system enables the government to increase the amount of money being transmitted in the country by cutting on state taxes, increasing the amount of government expenditure while the central bank is regulating by increasing the amount of money being supplied in the country. This helps in increasing production while creating more jobs. Expansion of a business cycle creates inflation in the country. A contractionary fiscal policy seeks to attend to this problem by trying to decrease the amount of money spent by the government while increasing the amount of interest rates on loans offered as to discourage people from borrowing hence reducing the amount of money in supply in the country. 4. Crowding out effect is whereby there is shrinkage in the private sector economy due to an apparent increase in government interest rates. There will be a less crowding out effect if the government spending is reduced as this will see a decrease in interest rates and higher investments in the private sector. 5. When Marginal taxes are cut off by the government, people tend to spend more on buying of products as they seem to have more money to spend. While they spend more on marketing, the government tends to collect more money from

The Coca-Cola Company Struggles with Ethical Crises Essay

The Coca-Cola Company Struggles with Ethical Crises - Essay Example The Belgian government ordered Coca-Cola to recall all its products, a move that was also witnessed in the Netherlands and Luxembourg. Coca-Cola at first underestimated the gravity of the matter, and took several days before correcting the situation or even going to the press about the issue. As a result of this delay, other people continued to suffer from the contaminated products, which had been determined to be the result of a consignment of carbon dioxide that had been improperly processed. France also reported about a hundred people had become ill after consuming coke, which led to all Coca-Cola products being banned from the country (Ferrell, Ferrell & Fraedrich ,2011) . The situation escalated and culminated in December the same year, when Belgium ordered Coca-Cola to halt a campaign it had launched to re-introduce its products in the country. Coca-Cola market eminence in Europe reduced significantly after this scandal, due to the incapability of the corporation to handle the cases professionally and with the seriousness they deserved. Coca-Cola was also accused of unfair competition in the international arena especially in European countries. In 1999, Coca-Cola sought to expand its market in France by trying to purchase a beverage company. The government intervened and stopped Coca-Cola from acquiring the company, under the antitrust laws of the European Union. Other countries such as Italy also accused Coca-Cola of anticompetitive prices and won a case against the company on the same. Other companies such as Pepsi also accused Coca-Cola of using discounts and refunds to get more consumers, something that was against European laws. Allegations of racial discrimination also plagued the Coca-Cola Company in 1999, after about 1500 employees of African-American descent sued the company on grounds of racial discrimination. The employees complained that favoritism was evident, in terms of payment, performance analysis and promotion. These allegations caused a lot of unrest in the company, and Coca-Cola had to pay 193 million dollars to settle the case (Griffin & Moorhead, 2011). Another case was in store for Coca-Cola, when it was accused of shipping more inventories to its supplies before a quarter was over, against business law. Afterwards, the company would count the shipments as sales, despite such goods remaining in the warehouses or being returned. These sales were then counted as revenue, thus creating the impression of a strong company, therefore, fooling investors who believed the inflated profits. Distributors of Coca-Cola products in the U.S sued the company in early 2006, after the company started using delivery agents to supply its products to warehouses. This move according to the distributors was against antitrust laws, and Coca-Cola had to find a way to settle this dispute. In Colombia, accusations surfaced between 2001 and 2004 that Coca-Cola had been intimidating its employees since 1989. Statistics showed that eight w orkers had died, 48 forced into hiding, and 65 issued with death threats in the Colombian bottling plant. The workers union sought compensation for the affected families, although Coca-Cola maintains that these allegations were unfounded. In India, the Coca-Cola subsidiary was accused of using contaminated ground water to make soft drinks, resulting in excess levels of pesticides in these drinks. In addition to this,