Essay
Unit 38 Business and the Economic Environment M1
- Institution
- PEARSON (PEARSON)
M1 analyse the implications of government policies for a selected business
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Seller
Follow
Content preview
Unit 38: Business and the Economic EnvironmentM1: analyze the implications of government policies for a selected business
Introduction
This assignment focuses on the government policies and how these policies impact
PJ Hegarty and Sons and how the business is likely to react in the case of both a
positive and negative outcome.
There are many different types of government policies and all have an effect on the
business. However, the businesses course of action can determine the results that
the business will achieve in the end.
Economic policy
These are the systems that relate to the economic state of a country and how
different matters will be handled by the government depending on the current state
of the economy. This policy has control over the economic factors such as
unemployment, gross domestic product, taxation, etc.
In the case of a positive implication for PJ Hegarty and Sons:
1. Inflation rate will be able to be controlled, which will allow the business to
have a steady price that customers can afford their products and services.
This will increase the demand as well as the supply since sales will begin to
increase.
2. The unemployment rate will decrease which will cause more people to have a
job. This is because business is increasing, so the business will need more
employees. The business will also be able to pay their employees because
they are making profit.
3. An increase in sales should allow the business to be able to cover all costs
within the business, so supply will increase.
4. Taxation will increase since the business will be making more money,
however, the business will be able to cope with this since sales will be
increasing.
In the case of a negative implication for PJ Hegarty and Sons:
1. Deflation rates will occur which means that the business will decrease prices
in order to sustain the business because customers will not be able to afford
products at high prices.
2. Customers will not be able to afford products because salaries will decrease
and more people will be unemployed because the business cannot pay them
all. This will push the business to decrease prices so that customers can afford
products and demand remains leveled.
3. The business may not be able to afford taxes, however, the government may
decrease tax rates. The business may now cut costs such as wages in order to
be able to cover other expenses to keep the business running.
4. If the business cannot accommodate, then supply will decrease which will lead
to further debt problems.
Industrial policy
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Sheyy01. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £5.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52510 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now