The aim of the assignment “Business and the Economic Environment” is to identify and understand terms used by many individuals. The terms used may be economy, GDP, recession, growth or even inflation. These terms ultimately have great effect and implications upon a business on its running. The assignment shall also look at different aspects of the United Kingdom’s economic environment and the recent changes that have gone on to affect it. Ultimately the assignment shall seek to link business and the economic environment. The assignment shall investigate the impact of businesses as a result of changes in the economic environment, understand how government spending impacts businesses, understand how policies such as monetary and fiscal can affect spending within the United Kingdom and finally know how the international economy affects United Kingdom businesses and competition. This assignment shall:
1) Explain the effected of changes in the economic environment on a selected business. 2) Identify how government policies impact a selected business. 3) Identify the impact of government spending on selected business. 4) Analyse the implication of government policies for a selected business. 5) Evaluate the impact of changes in the economic environment upon a selected business. 6) Explain how both Fiscal and monetary policy decisions have affected a selected business. 7) Analyse the effects of fiscal and monetary policies for a selected business in terms of the market in which it operates. 8) Suggest and Justify elements of fiscal and monetary policies that would help a selected business achieve its objectives. 9) Describe the impact of international factors on a selected business. 10) Assess the impact of changes in the global and European business environment on a selected business. The selected organisation that has been chosen to investigate is Balfour Beatty. Balfour Beatty PLC is a multinational infrastructure group in provision of professional services, construction services, support services and infrastructure investments. The organisation is thus in provision of four different services. Task 1: Impact on Business of Changes in the Economic Environment: The business cycle if often known as the economic cycle, the cycle is a concept used by many individuals to predict within what stage the economy is in and thus what effects this may bring upon many organisations. The business cycle ultimately shows and predicts increases falls and increases production, income and expenditure within an economy over a period of time. Predictions made about the economy are often calculated in quarters, within each year there are four quarters each lasting a period of three months. The economic cycle currently is viewed as having four different stages boom, recession, slump and recovery. The government will often implement a variety of policies based on what situation or stage the economy is currently in. The four different stages of the economic cycle in terms of their nature are outlined below: Boom:
A boom is often seen as the period of the economic cycle within which the economy will prosper it is however worth acknowledging that although during this stage of the cycle the economy will experience high levels of growth, it is ultimately not desirable for any economy. A boom will often occur when levels of aggregate demand in the economy are at high levels an increase in aggregate demand within the economy is desirable however when increases in aggregate demand continue to occur at high levels, inflation can occur which is the overall increase in prices of goods and services over a period of time. Inflation is however not desirable as for consumers the prices of goods and services will increase leading to a fall in consumer spending eventually adding to unemployment within the economy. A boom as a result of increases in aggregate demand within the economy will often see the economy lead to increases in real national output, the...
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