Summary
Summary Business and the Economic Environment - P2 and M1
- Module
- P2 & M1
- Institution
- PEARSON (PEARSON)
P2 - Identify how government policies impact Tesco M1 - Analyse the implications of government policies on Tesco
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Business and the Economic Environment - P2 & M1 Aaron Carswell Francesse MooneyIntroduction
I have been asked to explain and analyse the different types of policies that are within the economic
environment and the business I have chosen to analyse is Tesco. The types of policies that I will
analyse are the economic, industrial, competition, fiscal, social, education and training, transport,
regional and environmental policies.
Government Policy
The Government Policy uses two main tools in order to control the economy which is the Fiscal
Policy and the Monetary Policy. The Fiscal Policy deals with taxation and government spending and
the Monetary Policy is what controls the economy by changing the interest rate. The Government
Policy will outline all of their current actions and plans relating to areas that need attention e.g.
growth, inflation/deflation, employment, welfare state etc. The Government do various things in
order to help the economy so that they achieve the aims and objectives they had set out to do.
The Government has to ensure that they are able to have funding available to make improvements
to areas such as road and rail services, motorway networks as improvements to these areas can in
turn help to encourage transportation of goods to and from the country and therefore make it easier
to build up a trading relationship with overseas countries. This encourages a growth in the economy
as home grown produce can be marketed and sold across the globe. A growth in this area of the
economy helps to encourage new businesses and the Government can benefit financially from
corporation taxes and property taxes. If the economy grows, as a result of this economic stability
through cross trading with other countries, it also means that there is more work available and
therefore less people will be dependent on unemployment benefits and the Government would be
able to obtain more taxes from the working population. Through Government spending on areas
such as internet infrastructure also means that contact with overseas countries is much easier and
foreign contracts for supply of goods is easier to adapt through this improved technology. The
Government is always trying to obtain as much funding as possible from various forms of taxing so
that they in turn have available funding to make improvements on areas as mentioned above. The
Government also tries to use some of the money gained by the taxes to support those who wish to
start up a business or perhaps inject funding into existing businesses in order that they remain
successful. The Government are also investing money into STEM subjects in order for young people
to encourage them to take these subjects on as there is availability for work for those that are
successful in these subject areas.
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