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UNIT 1 - The Business Environment - Controlled Assessment 2
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- PEARSON (PEARSON)
UNIT 1 - The Business Environment - Controlled Assessment 2
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6. Fiscal PolicyA. Define fiscal policy
The fiscal policy is to change the taxes in relate to the economic environment and about what is happening there, so they change taxes, and there are three
type of taxes that can get changed income tax, corporation tax and the VAT. This changes happen every single year by the chancellor and they keep the
equilibrium, so they set up a budget. The fiscal policy includes also the demand for goods and services, and other such as employment. The fiscal policy refers
to the use of the government spending and the tax policies. The purpose of the fiscal policy is to make sure that the economic is growing in a reasonable way
in a recession, and to keep the inflation low as possible for now the rate is of 2%.
B. Explain how fiscal policy is impacted during a boom and the affect this has on your selected organisation.
When there is a boom the fiscal policy will increase the taxes and this means that Greggs is going to have less customers due to the less disposable income
available for the customers to buy something that will be expensive, there are going to be applied the corporation taxes on Greggs this means that the
organisations is going to be able to make less profit, also on the products of Greggs is going to be applied the VAT tax this means that Greggs will make also
less profit from the products, this means that Greggs is going to be highly impacted from Greggs because they are going to have less profit however they will
have to pay more taxes. Fiscal policy will apply taxes to organisation like Greggs in order to balance the economic environment of the country. This means
that Greggs would have to decrease their prices on their products in able to give reasonable prices to their customers.
C. Explain how fiscal policy is impacted during a recession and the affect this has on your selected organisation.
The fiscal policy will be taken in place to maintain the equilibrium of the country, this means that the taxes will be decreased, however the customers
disposable income is going to be decrease because of the recession and this will mean that Greggs will have less customers because of the recession, and this
will impact Greggs because they are going to spend less and because the work is going to be decreased this means the wages and the employees will be
decreased in Greggs and that will mean there are going to be less people will less wages. However, the government is going to decrease the taxes of VAT and
the corporation tax and this means that Greggs can have prices decreased to prove their customers reasonable prices.
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