Technology Proposal Presentation

Macroeconomic Policy & Implications Paper

As Frank Drug Store is new in the market it needs to plan its goal and strategies and make efficient decisions by considering the macroeconomic factors and conducting cost effective analysis. The firm’s growth lies in the expansion of business and productivity by producing more goods and services which could also be accompanied by greater incomes. In essence, a sign of no inflation triggers, a two percent rate of growth that implies so that the firm’s economy is producing two percent more products and services than that were produced in previous years. Identifying and utilizing these factors to the fullest the important factors and variables of macroeconomics needs to be understood for the effective management of the growth of the company along with coping with macroeconomic concerns of unemployment and inflation. Whereby, offering concept of the overall growth in this health organization can be signified by a shift outward in the possibilities of frontier production, which may include:

i. Increases in resources utilized in production such as labor.

ii. Advancement in technology.

There are times when the firm is not growing or the time when the situation is not suitable. Frank Drug store can go through phases when its resources might stay underutilized; leading to lower in sales and increased unemployment rates as the result. This section provides an overview of the growth that comprises of the Gross Domestic Product referred (GDP). The GDP calculates the overall productivity as the total goods produced by the company during a given period of time and as the monetary value of the services and goods produced.

After a detailed analysis I computed three fields in which the nominal or real GDP, along with inflation and unemployment will affect the firm conditions. They are:

1. The final goods produced – The GDP value will directly impact manufacturing of final services and goods

2. The value added value and the reputation of the store in the market – Raised prices of medicines during inflation and other market disorders will lower the reputation and reduce the value of both the products sold and to the company

3. The GDP values and increased unemployment inside the store will directly affect the level of incomes of workers and employers.

Therefore considering all the about factors Frank’s drug store management and the owner needs to look after the medicines and vaccines sold focusing on their quality and performance, therefore by affecting the sales price of the all goods. As a result, the value can be utilized in the final goods approach that can be used to calculate the GDP. Furthermore, by the sale of more products, the firm can incur more revenues. Thus the profits incurred can be used to give percentage share to the employees that will help cope with the problems of unemployment; the incomes can also be distributed accordingly:

a. Wages paid to employment

b. The payment of interest that are compensated on the funds the company borrows to finance capital expenses as well as the beneficiaries are basically the institutions or individuals that lend funds to firms

c. Taxes should be paid by business entities to the government in the manner of corporate income taxes and indirect taxes such as excise taxes on a regular basis.

d. Profits are the ones which get left over after completing the above operations.

As prices for goods and services for the consumer’s increases, inflation is produced as a result. Therefore the company needs to configure the inflation rate as the measure for calculating the change rate in the total price level of medicines and services. In addition, inflation is a steady annual incidence in the modern economic systems that become becomes a policy concern while reaching unacceptably high levels.

In addition, inflation further becomes distorted in price mechanism which makes it very difficult to distinguish changes in differing prices from changes in the general price level initially. The pricing decisions of the store might be done considering a redistribution of resources and production into areas less affected by high inflation rates. Inflationary uncertainty thus pushes up real interest rates, as the distributers and manufacturers demands greater risk premium on their money. While making important decisions, there should be an understanding that there is a redistribution of productive and financial resources that will not lead to loss in efficiency.

The core reason of that cost-effectiveness analysis (CEA) is to differentiate the costs and values of various health care researches that will create a better health care system which will eventually foster longer life. Frank drug store needs to evaluate the new medical devices, procedures, diagnostic tests, and prescription drugs that are expensive; cost-effectiveness analysis can certainly evaluate whether the improvement in health care outcomes tallies with the total expenditures. The overall understanding of the costs outcomes and costs of the comparative interventions is difficult because it is very crucial for Frank’s management team in order to take decisions about using such health care resources efficiently. The following cost analysis represents the econometric evaluation of Frank drug house. Although there may be various econometric techniques that can be used to evaluate the value of the store, a standard cost-effectiveness analysis (CEA) methodology can be beneficial as follow:

i. Data and information can be simply presented into a modest accounting spreadsheet for exact calculations.

ii. Analysis can be scheduled by a method of measuring both cost related to staffing and the other to resource variables

iii. Customizing different levels of specificity according to the selected benefits and cost variables will promote growth.

iv. It will also permit cost and benefit variables that can be selected for CEA to be calculated in both indirect and direct dollars.

Basically, CEA is formulated in order for the purpose of comparing one program against another strategy for the purpose of determining which factor will produce the greatest benefit for the least expense. Analysis on the outcomes of CEA on Frank’s business it would be better to assign monetary values to a single intervention outcome and the costs of alternate interventions to achieve specific outcomes.

The CEA approach thus eradicates specific difficulties that can take place in benefit analysis. With CEA the firm will be able to compare the costs of specific interventions for achieving the physical outputs after spending dollar on diverse approaches that are geared towards the same goal. This method will help the firm to avoid the more difficult issues along with measuring the indirect benefits like the “human capital” computation. However, the indirect benefit computations are not needed, CEA becomes a simpler calculation for a single goal. This approach will also permit for comparing marginal and average costs of given outcomes. In some cases, the cost-effectiveness approach will help indicate the least cost alternative for a process that might impact net benefit on a benefit cost calculation. Therefore cost effective intervention will help achieve desirable outcome like providing the basic and organized health care services at less expense as the most common implementable approach.

The paper successfully addresses the functionalities and methods that need to be implemented by the firm focusing on the market conditions. In conclusion, I would like to state that the firm needs to consider the wider aspects of macroeconomic impact along with cost effectiveness to promote reliability and flexibility in its processes and services in the upcoming days.

Reference:

1. Jay Kaplan, (2002).Unit 6 - Inflation & Economic Growth. Retrieved from: http://www.colorado.edu/economics/courses/econ2020/section6/section6-main.html

2. John Cawley, Kosali I. Simon, (2001). The Impact of Macroeconomic Conditions on the Health Insurance Coverage of Americans. Retrieved from: http://ideas.repec.org/h/nbr/nberch/9865.html

3. U.S. Department of Health & Human Services,(2001).Focus on Cost-Effectiveness Analysis at AHRQ. Retrieved from: http://www.ahrq.gov/research/findings/factsheets/costs/costeff/index.html