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Creation of employment for citizens is one of the most valuable things that a government can do. Many people, especially the youth, live in poverty mostly because of lack of employment and a proper area to display and implement their talents and expertise. The economy of a nation is made up of simple and complex mechanisms that aim to generate income and benefit people as a result. The government and its bodies should do everything they can in order to help every business person succeed. As there are many requirements starting from business permits, proper working conditions, international ties and much more, the government should optimize them (Markusen & James 4). Taking fast-food industry in the United States as the case study, this article discusses the microeconomic tools to make this industry better.
In economic activities, there are many functions and actions that define and shape the success of a business. Factors of production that include the availability of resources, presence of the labor force and much more. Fast food industry requires a lot of resources and labor to make sure they perform effectively and make profits to sustain their owners and employees. Every business performs better when their profit margins and rate of return are favorable. To make these factors strong and make the business perform better the following actions should take place.
Lowering Taxes for Fast-food Industry Firms
Tax is one of the microeconomic tools that increases new firms’ entrance into the market. The increase in firms leads to higher competition and lower costs of the goods and services offered. Looking at the cost benefits analysis of this kind of businesses, there will be big returns as many people will afford fast food and the businesses will increase their sales. These factors lead to higher revenues on the government’s side, which will enhance its undertakings as well as improving social amenities. With lowered taxes, these businesses will hire a lot of employees, which in turn will make the business procedures easy and reduce the rate of unemployment in the economy (Rousseau et al. 13). Most businesses like it when they have a large number of employees who make the business run effectively meeting all the clients’ requirements on time. They also need faster replacements whenever their employees leave. With low taxes the businesses will meet most of these requirements, becoming successful, and hence improving the economy of the nation.
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Bilateral and Mutual Agreements with other Nations
The United States does not make all the products that the industries need to operate well and survive. For the fast food industry to have better production process and run effectively, they need food stocks, such as potatoes, baking flour and much more. The nation needs to cooperate with other countries that produce food stocks to get supplies. Such bilateral trade helps in reducing the costs of production, making it easier for the business owners to have ample production processes and increased output. Most of the times, the imported products are cheap and help business owners improve profits, which helps business to grow (Markusen & James 7). A country creates a better relationship with other countries where it will sell its produce and buy other products. For example, when the United States buys products for fast food industry in Brazil, it creates a market for machinery in that country. These actions improve the economy of the entire United States, improving other industries and encouraging direct foreign investment. This, in turn, improves the level of GDP and per capita income of the nation.
Availability of Loans and Low-Interest Rates
For a start of any business, capital is the main problem, and entrepreneurs often fail to access the required funds. Though there are different ways to raise funds for business purposes, they inconvenience entrepreneurs due to costs and fluctuations in interest rates. Some of these sources of funds from well-wishers and friends have hidden costs, which affects the business very much. Therefore, when the government provides loans and funds to enable the young business owners and entrepreneurs to establish their business, it is very good for the economy. The creation of jobs and opportunities is equally good for the economy as every working person contributes to the net national income, which builds a nation. In this plan, the government and the central bank should set aside funds to facilitate the growth and wellness of the youth and the minority groups in the country (Gordon & Robert 15). As fast food business is not complex to start, these funds will enable the youth to enroll in colleges or vocational centers to receive the knowledge of how to manage businesses and control their funds and profits.
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To conclude, stabilizing an economy and making a country self-reliant is a very hard process that calls for commitment and sacrifice. A country should make sure that its balance is well managed and that the per capita income of the citizens is well achieved. It is the task of the government to make sure that the young people and other minority groups in the society have sources of income. Business opportunities are very important and open more areas; likewise, the direct foreign investments are crucial to the economy. Availing capital alone to the citizens is not enough. They need proper expertise and training to contribute positively into the economy. Cheap ways of starting a business should be available in an economy and the government should embrace them.