...What is the economy? The economy is a system which defines how a country is doing financially through production and consumption of goods and services and they supply of money. The three different types of economy are: market, planned and mixed. The economy consists of consumers, producers and the government. Planned economy A planned economy is when the government makes all the decisions for society. Producers working towards the economy are instructed on what to make. A benefit to this type of economy is that most workers are employed and most people enjoy a similar basic lifestyle. A disadvantage is that wages are controlled by the government; therefore motivation levels are not high. Market economy A market economy is when the government does not have much control and that they can do little to affect the economy. What they can do is provide legislations to protect customers and companies and making sure no business or organisation restricts competition. Furthermore, they provide needed services such as police and defence and they even ensure the country’s money supply is stable. An advantage of this is that businesses are motivated by profits to make products that customers will buy. A disadvantage is that if there is a major crisis affecting the economy without government intervention the economy would fail. Mixed economy A mixed economy is planned and market economy combined. In a mixed economy the government contributes and controls some resources and the market...
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...Business and the Economic Environment - Edexcel https://www.edexcel.com/.../Unit%2038%20Business%20and%20the%20... P4 explain how both fiscal and monetary policy decisions have affected a selected business. [IE]. M2 analyse the effects of fiscal and monetary policies for a. [DOC]Unit_39, Anon - VOCBUS https://vocbus.files.wordpress.com/2010/06/natunit39assignmentanon.doc Describe the effect on a selected business of variations in economic activity ... Outline how both fiscal and monetary policy decisions have affected a selected. [PDF]Unit 38: Business and the Economic Environment fc.nbvlc.org.uk/.../Unit%2038%20Business%20and%20the%20Economi... P4 explain how both fiscal and monetary policy decisions have affected a selected business. [IE]. M2 analyse the effects of fiscal and monetary policies for a. [DOC]GNVQ Part One ICT - BTEC Business btecbusiness.weebly.com/uploads/6/8/7/.../business_unit_38_btec_d.doc Analyse the implications of government policies for a selected business. D1 ... Explain how both fiscal and monetary policy decisions have affected a selected ... Explain how fiscal and monetary policy decisions have ... https://www.stuvia.com/.../explain-how-fiscal-and-monetary-policy-decis... 26 May 2014 - Explain how fiscal and monetary policy decisions have affected a selected business. Stuvia · United Kingdom · Ealing, Hammersmith and West ... How Fiscal Policy and Monetary Policy Affect the Economy ... education-portal.com/.../how-fiscal-policy-and-monetary-policy-affect-t...
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...Economic Environments within Businesses Economy Great Britain is one of the world's leading industrialized nations. It has achieved this position despite the lack of most raw materials needed for industry. It must also import 40% of its food supplies. The UK has been dependant on the export of manufactured goods in exchange for various raw materials and food. The countries manufacturing sector includes; machines tools, electric power, motor vehicles, metals, chemicals,paper, textiles, clothing etc. Economics is concerned with the process of satisfying the needs and wants of the population, by using the limited resources of the economy in the most efficient way. There are generally considered to be four main objectives of an economy: A low level of unemployment A low level of inflation A high level of economic growth A good foreign trading position Gross Domestic Product (GDP) The value of a country's overall output of goods and services at market prices, excluding net income from abroad. GDP can be estimated in three ways which, in theory should yield identical figures. They are; Expenditure basis: how much money was spent Output basis: how many goods and services were sold Income basis: how much income (profit) was earned. The main criticisms of GDP as a realistic guide to a nation's well-being are that; It is preoccupied with indiscriminate production and consumption. It includes the cost of damage caused by pollution as a positive...
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...Explain how economic systems attempt to allocate resources effectively………………3 1.2 Assess the impact of fiscal and monetary policy on “Lloyds Banking Group, UK”, and their activities………………………………………………………………………..5 1.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a “Lloyds Banking Group, UK”....................................................................................7 References…………………………………………………………………………………….9 TASK 2: Nature of the Operating Business Environment Introduction: The study discusses different types of economic systems and assesses how these economic system attempts to allocate resources efficaciously, explains the UK government policies (namely monetary, fiscal, social, and competitive policies) and assess the effect of all the above-mentioned policies on a “Lloyds Banking Group, UK”, UK based organization. The paper exposits market structure types (namely, perfect competition, monopoly, monopolistic competition, and other market structures. Finally, the paper describes the ways market structures define the output and pricing strategies of the companies. 1.1 Explain how economic systems attempt to allocate resources effectively Economic systems are a set of institutions for assigning resources and making possibility to satisfy human wants. Resource allocation is the assignment of resources to particular tasks to deduce the basic economic choices, which are what to produce, how to produce...
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...BUSINESS ENVIRONMENT UNIT:1 Introduction Business may be understood as the organized efforts of enterprises to supply consumers with goods and services for a profit. The following essay contains some details about the business environment such as types of organisations, EU rules and regulations policies of the market control. 1.1 Identify the purposes of different types of organisation. 1. Sole traders The sole trader is a common form of business ownership and is found in a wide range of activities such as painter, plumber, cleaner. Business has only one owner who responsible for all the expenses and legal requirements. Difficult to raise finance, also owner has unlimited liability. 2. Partnership Partnership is a business with at least two or more owners up to twenty. Partnerships are particularly common in professional services such as solicitors accountant. Owners enjoy limited liability, share their skills, and work allowing them to raise capital more quickly than individuals. 3.Private Limited Company (LTD) The Company is an artificial person made by law, offers limited liability. The major private limited company’s restrictions are about the shares and shareholders. Shares cannot be sold or transferred to the public. Shareholders enjoy priority against others in buying shares within the company. Example J. Whitaker & Sons Ltd 4 Co-operative The co-operative is a group of people working together, making decisions together to reach common...
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...is going to sustain or fail. Economic growth plays a pivoted role in improving nation’s gross happiness and ameliorating the lifestyle of its people. Economic growth is defined as “The value of all the products manufactured and sold in a country of the course of one year along with everything that people do and get paid for, all that amounts to the economic growth.” (Sandford and Bradbury, 1970). When people earn more money and then buy more products and services the economy grows. Politicians also want to see the economy grow, that’s why they work towards achieving greater employment, state prices and a balance between imported and exported goods. More growth means more money. The economic growth should be achieved in a way that it must reach to the point where the economy has finally matured. The resources that industries require are limited and the need for raw materials often doesn’t take nature into account. That is why rapid or poorly planned economic growth starts to have bad impact on quality of life, that’s why countries like Germany, Bhutan etc. plan their economic policy keeping in mind about nature’s safety and gross domestic happiness (Rodrik, 1996). 2. Economic Policy An economic policy is a very complicated area but it can be categorized into following major areas 1) Fiscal Policy: which refers to government’s budget. In other words, it deals with the revenue or the spending in the form of taxes etc. 2) Monetary Policy: which refers to getting interest...
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...collaborate and other times work at arm’s length from each other * Defining public policy and the elements of the public policy process * Explaining the reasons for regulation * Knowing the major types of government regulation of business * Identifying the purpose of antitrust laws and the remedies that may be imposed * Comparing the costs and benefits of regulation for business and society * Examining the conditions that affect business in a global context Business-government relations * Government cooperates with businesses for mutually beneficial goals. * -Influenced by a nation’s values and customs differs in countries. * Their goals can range from one of cooperation to one of conflict, with various stages in between. It is constantly changing. * Companies operating globally may find governments whose legitimacy or right to be in power is questioned. * The ability of a government leader or a group of leaders to maintain political power can be influenced by businesses’ actions. (i.e boycotting economic relations with a country, or decide to withdraw operations from a country) Government’s public policy (PP) role * A plan of action undertaken by government officials to achieve some broad purpose affecting a substantial segment of a nation’s citizens. * PP inputs: External pressures that shapes a government’s policy decisions and strategies to address problems. * PP tools involve a combination of...
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...How businesses are affected by government policy Governments create the rules and frameworks in which businesses are able to compete against each other. From time to time the government will change these rules and frameworks forcing businesses to change the way they operate. Business is thus keenly affected by government policy. Key areas of government policy that affect business are: Economic policy A key area of government economic policy is the role that the government gives to the state in the economy. Between 1945 and 1979 the government increasingly interfered in the economy by creating state run industries which usually took the form of public corporations. However, from 1979 onwards we saw an era of privatisation in which industries were sold off to private shareholders to create a more competitive business environment. Taxation policy affects business costs. For example, a rise in corporation tax (on business profits) has the same effect as an increase in costs. Businesses can pass some of this tax on to consumers in higher prices, but it will also affect the bottom line. Other business taxes are environmental taxes (e.g. landfill tax), and VAT (value added tax). VAT is actually passed down the line to the final consumer but the administration of the VAT system is a cost for business. Another area of economic policy relates to interest rates. In this country the level of interest rates is determined by a government appointed group - the Monetary Policy...
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...Basic Theory Classical economic theory is rooted in the concept of a laissez-faire economic market. A laissez-faire--also known as free--market requires little to no government intervention. It also allows individuals to act according to their own self interest regarding economic decisions. This ensures economic resources are allocated according to the desires of individuals and businesses in the marketplace. Classical economics uses the value theory to determine prices in the economic market. An item’s value is determined based on production output, technology and wages paid to produce the item. Keynesian economic theory relies on spending and aggregate demand to define the economic marketplace. Keynesian economists believe the aggregate demand is often influenced by public and private decisions. Public decisions represent government agencies and municipalities. Private decisions include individuals and businesses in the economic marketplace. Keynesian economic theory relies heavily on the fact that a nation’s monetary policy can affect a company’s economy. Government Spending Government spending is not a major force in a classical economic theory. Classical economists believe that consumer spending and business investment represents the more important parts of a nation’s economic growth. Too much government spending takes away valuable economic resources needed by individuals and businesses. To classical economists, government...
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...Sates and China in terms of globalization and International managerial aspects. United States is considered as the largest economy in the world which represents twenty two percent of the global economy. It has a mixed economic system and the US dollar is the most utilized currency in worldwide transactions with several countries using it as their official or de-facto currency. United States is also the largest oil and gas producer globally. On the other hand, China is categorized as the second largest economy of the world just behind United States as per nominal GDP. China is believed to be a hub of manufacturing and exporting goods. It is also considered as the largest trading nation of the world. This essay will identify and examine major political, legal, economic and social issues in both countries. Furthermore it will highlight different strategies and theories which may assist International managers in countering the issues they may face in these two countries. Political issues are government activity which may impact business operations and management. International managers must have knowledge about the risks which may affect firm. The political issues are mainly influenced by the nature of government type and its constitution and the features and policies of the political parties. The first point looked upon by managers are whether the country they intend to operate in is politically unstable. If so, industries may be nationalized, private property may be seized or destroyed...
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...tools to shape the monetary policy of the United States in order to promote economic growth and reduce the rate of inflation and the unemployment rate. By adjusting these tools, the Fed can control the amount of money in the supply. By controlling the amount of money, the Fed can affect the macro-economic indicators and steer the economy away from runaway inflation or a recession. The Federal Reserve The Federal Reserve uses three main tools in order to control the money supply. The first tool is open-market operations. These operations consist of the buying and selling of government bonds to commercial banks and the public. Open-market operations are the most important tool that the Fed can use to influence the money supply (Brue, 2004, p. 252). By buying bonds from the open market, the Federal Reserve increases the reserves of commercial banks that in turn will increase the overall money supply in the country. The opposite is true if the Fed sells bonds on the open market. By doing so, the Fed reduces the reserves of banks and, in turn, takes money out of the system. By being able to control how much money the commercial banks can lend, the Fed has a very powerful tool to adjust the economy. The second tool in the Federal Reserve’s arsenal is the adjustments of reserves ratio. The reserves ratio is the required amount in which a bank must have at all times. By raising or lowering the reserve ratio, the Federal reserves can expand or limit how much a bank will loan out money...
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...a country in a year, after being adjusted for inflation. • Nominal GDP- refers to the value of the goods and services that are produced in a country in a year, before the adjustments of inflation. • Unemployment rate - refers to the number of people in a country who do not have a job but are able to work. • Inflation rate - refers to how fast the prices of goods and services in a country are rising. The higher the rate is, the less the public’s purchasing power is. • Interest rate - refers to how an additional fee that is charged by a lender when money is borrowed. The higher the rate is, the more money will be charged to the borrower. Introduction Now that some of the fundamental terms of macroeconomics are defined, it is time to explore some of the economic activities of macroeconomics. “Macroeconomics is the study of an economy at the aggregate level, and is concerned with the workings of large sectors of the economy” (Colander, D., 2010). Fundamental activities of macroeconomics in relation to sectors of the economy include the purchasing of groceries, massive layoffs of employees, and decreases in taxes. These activities affect the government, households, and business as the resources flow throughout the economy and from one entity to the next. Purchasing of groceries Starting with the purchasing of groceries, it is important to understand that supply and demand play a huge role in the process. “Supply and demand interact with...
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...(external environment) PEST analysis is concerned with the environmental influences on a business. The acronym stands for the Political, Economic, Social and Technological issues that could affect the strategic development of a business. Identifying PEST influences is a useful way of summarising the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences. Political – these factors have a direct impact on the way a business operates. Decisions made by government affect our everyday lives and can come in the form of policy or legislation. The government’s introduction of a statutory minimum wage affects all businesses, as do consumer and health and safety laws and so on. Economical – businesses are affected by these factors nationally and globally. Interest rate policy and fiscal policy will have to be set accordingly. Within the UK the climate of the economy dictates how consumers may behave within society. Whether an economy is in a boom, recession or recovery will also have an effect on consumer confidence and behaviour. An economy that is booming is characterised by certain variables. Unemployment is low, job confidence is high, and because of this confidence spending by consumers is also high. This has an impact on most businesses. Organisations have to be able to keep up with the increased demand if they are to increase turnover. An economy that is in a recession...
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... Criteria reference | To achieve the criteria the evidence must show that the student is able to: | Task no. | Evidence | 1.1 | Identify the purposes of different types of organization | 1 | | 1.2 | Describe the extent to which an organization meets the objectives of different stakeholders | 1 | | 1.3 | Explain the responsibilities of an organization and strategies employed to meet them. | 1 | | 2.1 | Explain how economic systems attempt to allocate resources effectively | 2 | | 2.2 | Assess the impact of fiscal and monetary policy on business organizations and their activities | 2 | | 2.3 | Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization | 2 | | 3.1 | Explain how market structures determine the pricing and output decisions of businesses | 3 | | 3.2 | Illustrate the way in which market forces shape organizational responses using a range of examples | 3 | | 3.3 | Judge how the business and cultural environments shape the behavior of a selected organization | 3 | | 4.1 | Discuss the significance of international trade to UK business organizations | 4 | | 4.2 | Analyze the impact of global...
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...ASSIGNMENT COVER SHEET Name: | | Address: | | Post code / Zip: | | Telephone No: | | Email Address: | | Date: | | Course Name: | | Tutor Name: | | Assignment Name: | | PLEASE NOTE: YOU SHOULD INCLUDE THIS INFORMATION with EVERY ASSIGNMENT. Introduction In this assignment I will be researching the Business Environment and the Business Organisations, I will learn why Businesses operate in different ways and how strategies are developed to meet an ever changing market both national and globally. Section 1 Understanding the Organisational Purposes of Business. There are several terms to describe the word Organisation; A company set up to be profitable, a company set up for a cause or non-profit, a group or association that serves a particular purpose. All of these examples and the others though are all similar, in that they are structured and managed to pursue collective goals. In this section I will describe the purposes of the different types of organisation, the extent to which objectives are met for the stakeholders and also the responsibilities of an organisation with the strategies employed to meet them. Business Organisations exist to do one of two things which are to Produce and/or Provide. The type of sector an organisation is categorised is dependent on the product or service provided these are Primary, Secondary and Tertiary Sectors. Primary sector organisations exist to produce the raw materials needed to produce a product, Secondary sector...
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