Corporate Social Responsibility and Profit Essay

Corporate Social Responsibility and Profit - Essay Example This paper illustrates that followers of CSR on the other hand state that being socially responsible is more important because of the social contract, as well as the argument that CSR can actually increase profit. Others in favor of CSR say that it is already an obligation, and the issue is simply one of finding ways in which companies can act in ways that are socially responsible. Even companies who agree that CSR is important often have problems putting CSR principles into practice. The main critics of CSR claim that standards of living have greatly improved over the past 100 years and that this improvement is a result of â€Å"the success of free enterprise†. Critics of CSR attack those in favor of it by saying that profit is a needed and helpful advantage of business because it is this very profit which allows businesses to put funds into helping society. The reduction of profits gained by companies caused by CSR can actually have bad effects on society because lesser prof its mean less ability to help society. If companies spend more time paying for functions that make them socially responsible, they will not be able to focus on the profit which is important for shareholders. Without shareholders, the company does not exist, and so it cannot help society by giving it funds. Many people in favor of CSR say that many business ethics of big corporations are unethical, but critics reply by saying that it is unethical for managers to think of anything else than maximizing shareholder profits. Also, making companies responsible for many different aspects of society risks managers and directors being distracted. Critics also say that there is a big difference between taking account of society’s interests and being accountable for society’s interests; only the former element should be imposed on managers and businesses.

Economics term papaer Paper Example | Topics and Well Written Essays - 1000 words

Economics papaer - Term Paper Example It would help in tightening the liquidity of the economy. It can be depicted that when such reserves are made by the commercial banks with the Central Bank then it has an impact upon the balance sheet of both the banks i.e. the Central Bank and the commercial bank. At the outset, there will be rise in the Central Bank’s liabilities since the quantity of deposits that the commercial bank is supposed to keep with the Central Bank is rising by 0.5%. Conversely, the assets side of the commercial bank will be impacted. There will be rise in the assets side of the commercial banks. It can be treated as deposits at other banks, so in the balance sheet there will be rise in the deposits at other banks too. Question Two It can be stated that there are four basic components of the GDP. They are consumption, investment, government spending and value of exports and imports. The GDP of an economy is calculated by adding up the value of expenditures on the consumption, value of the expendit ures in investments, rate of the government procurement of goods and/or services, value of exports of the goods and the services minus the value of the imports of the goods and the services. ... All the three components of the GDP will be impacted. The reason behind this is that when the inflation is controlled then the rate of consumption will increase and thus the economy will be able to invest more. Thus, there will be rise in the consumption, along with rise in the investment and government spending. There will be rise in the exports as well. Effects on the Equilibrium and Aggregate Expenses It can be demonstrated that since the consumption will rise, it is quite obvious that there will be rise in the production as well. Therefore, the equilibrium real GDP will increase. Question Three The term ‘money multiplier’ can be figured out as the volume of money supply in relation to the volume of the base money. It is worthwhile mentioning that when the reserve deposit ratio or the cash deposit ratio is lower then, the money multiplier tends to be higher. The case of China is just the opposite. It can be demonstrated that when the economy plans to raise the reserve ratio requirement for the banks the money multiplier tends to shrink. Investment Multiplier It has been noticed that Central Bank planned to augment the rate of interest. If the rate of interest augments then more and more investors get attracted towards the bank. Although paying up of augmented interest rate is an increased cost for the Central Bank, but on the flip side, it can be viewed that the rise in the interest rate may tend to make it quite attractive for the international investors to purchase Renminbi and thus invest those Renminbi in China. With the rise in the interest rates, the income tends to rise thus forcing the consumers to invest in other sectors of the economy as well leading to growth in the overall economy (Bradsher, â€Å"China Move Could