• March 31st, 2016

Economics

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In the village of Sweden with 100 inhabitants, 49 people in the current situation a job to go to. The main employer is the village’s engineering industry, which employs 30% of the employed, both as workers in industrial production but also by officials. The company’s biggest market is Europe and especially Germany. A new player from Asia has appeared on the company’s market and they prove to be a tough competitor through aggressive marketing lures with lower prices. What can it lead to the village economically, ie How can the village and its inhabitants suffer if it turns out that the Asian competitor to win significant market share? You must both describe the potentially downward economic process can work and also how this may affect the village as a whole and how individual citizens and groups of citizens may be affected by this. Enlist the help of theories! How can the village’s financial managers handle the situation? Discuss and argue about how can / should handle the situation both from slowing a downward cycle and how to act if a recession comes true. In your answer you should use at least two of the economic theories raised in the working area. You must account for how one should act based on the theories of your choice. Reason also about what you expect for the outcome of your proposal (ie the consequences of the theories of your choice). Lift Thus both the strengths and weaknesses of using the theories of your choice. Be sure to think about and discuss how the economic and social conditions may be affected! How to deal with the weaknesses you see in using the theories?

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