Learners should evaluate the impact of changes in the economic environment on a selected business in relation to government decisions, policies, spending and economic management. Learners need to examine the information and draw justified conclusions as to how the business might respond.
BTEC Level 3 National Extended Diploma in Business
Unit 38
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D1- Evaluate the impact of changes in the economic environment on a
selected business
Introduction
In this task, I am going to evaluate the impact of changes in the economic
environment on my selected business which is Curry’s. The following points I am
going to explain in this task is government spending, government policies, and
economic management such as interest rate control & inflation costs.
Government Policies
Government policies have impacted greatly on businesses such as Curry’s.
Policies such as fiscal, transport and social policy impact heavily on businesses.
Government policies help impact the changes in the economic environment by
enforcing laws & rules to help Curry’s succeed as a business and also run their
business safely & fairly. Fiscal policy impacts the changes of the economic
environment by increasing tax rates to help the economy grow. As the fiscal
policy is created, it can take several countries out of recession and help recover
the economy. Fiscal policy impacts on Curry’s is that if tax decreases, consumers
will have a more disposable income allowing them to purchase more of Tesco’s
products which will increase their sales, market share & profit which Tesco will
succeed as a business. Environmental policy impacts on the changes of the
economic environment as it reduces pollution in global environments. With using
the environmental policy, it will help reduce waste & carbon emissions in
workplaces & local environments. Government policies benefit the economic
environment as more money will flow into the economy.
Government Spending
Government spending is the total amount of money the government spends in a
particular time. Government spending affects public, private, & voluntary
sectors. Government spending involves spending money on public services,
deficit funding, and local impacts of funding. Government spending impacts the
changes of the economic environment because it increases the income of
businesses & the economy. Government spending helps consumers survive in
the country. Deficit funding impacts on Curry’s because it will have a knock-off
effect on the government. If the government gives Curry’s a loan, Curry’s will
have to pay a lot of debts, losing money in their income. Interest rates can also
be a factor in government spending. If interest rates are high, this will decrease
government spending. This will affect the growth rate of the economic
environment. Government spending is encouraged by economic growth.
Government spending will impact on Curry’s because sales & profit will increase
and they can be able to invest in their business. However, government spending
can cause a negative impact on businesses. This can increase taxes which a
country like the UK will purchase more. UK’s GDP can decrease & consumers will
have a low disposable income. Government spending impacts greatly on demand
of consumers in the economy. The more the government spends money on the
public, the more customers Curry’s will receive. Sales will increase as a result.
Economic Management
Economic management such as interest rates control & inflation impacts on the
changes of the economic environment because this determines the increase or
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