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Unit 38 Business and the Economic Environment P5
- Institution
- PEARSON (PEARSON)
P5 describe the impact of international factors on a selected business.
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, This assignment focuses on the global factors that affect PJ Hegarand Sons. These factors will be explained and how they affect the
company will also be described.
, This is an organization that was formed on January 1, 1995.
The purpose of this organization is to reduce tariffs and other barriers
to trading.
This organization has 164 member states (2020); speaking languages
of English, French and Spanish.
The system helps promote peace and encourages good
government; rules make life easier for all; freer trades cut the costs
of living; trade raise income and stimulate economic growth;
government is shielded from lobbying.
Effects on the Business
• This can increase the amount of materials that the business has access.
• Can increase the business because it increases exports and imports.
• Removes borders so the business will have access to more items and building opportunitie
, This is a group of countries that unite in order to
increase trade amongst each other and take
advantage as a group.
May cause difficulty for other countries that are
not included in the preferential trading deal.
Effects on the Business
E.g. the North American Free Trade Agreement • This can prevent the business from
(NAFTA) promotes trading between the United able to trade with other organiza
States, Canada and Mexico, reducing charges overseas.
and making trading easier. • Minimise the amount of materials
The European Union has its own Trading Blocs. business has access to.
• This can decrease the amount of
productivity that the company h
, Stocks and shares are traded throughout the world.
This can cause changes in the stock market, values of shares, etc.
This can have an impact on the economy and further affecting the businesses in the
economy.
Effects on the Business
• How much money the business gains and profits on due the fluctuations.
• The profitability of the shares and stocks.
• The prices of the services and products will fluctuate which will affect whether the busin
is in loss or profit.
, The International Monetary Fund (IMF) was created to ensure that economies
could achieve financial stability.
This organization was formed December 27, 1945.
Membership of 189 countries (2020).
Effects on the Business
• Can push the business to borrow and this can cause debt depending on the
state of the economy.
• High interest rates during this time can also cause debt.
• Decrease demand and productivity and further decreasing sales and profits.
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