M2 - analyse the effects of fiscal and monetary policies for a selected business
in terms of the market it operates in.
This report will be analysing the effects of fiscal and monetary policies for
Mcdonald’s, looking at the pros and cons. There are many pros and cons of these
policies on Mcdonald's because money that they give to the government such as tax,
that money gets spent on public things such as healthcare and transport. However
there are cons as well such as interest rates when borrowing money from the bank
when the interest rates are sky high.
The pros of the fiscal policy on Mcdonald's are:
1. Tax
It is always an advantage if tax is paid and if the tax is very low because that
means not much money is being cut out of the profit made. By Mcdonald's paying
tax, that money will go towards public spending such as transport which means
there would be better roads build and railways. Also if any road conditions
deteriorates then the roads will be rebuild which is good because Mcdonald's
have to have their ingredients and products delivered to them and that can't
happen if the conditions of the roads are really bad. With the roads conditions
being good, Mcdonald's would react by increasing their sales by having more
ingredients and products delivered to them so this is a huge benefit to
Mcdonald's.
2. Budget Surplus
This is when the government spending is less than their tax revenue. This is good
because it means the government’s tax revenue will be equal with people's
disposable income so it will not affect it. For Mcdonald's their sales and profit are
likely to increase as people will have more spare cash available to spend on
themselves as they would be able to afford it. With this happening, Mcdonald's
would mostly react by selling more quantity of each of their products and making
more products to increase their profit for maximum output.
3. Public spending (benefits)
The income tax and corporation tax that Mcdonald's pays goes towards the
benefits such as jobseekers allowance, income support and child benefit etc. This
means that people who don't have jobs or single parents who have struggle for
money get support from the government which means that they still have money
in their pocket. This is good because it gives people that extra money and
restores some of their confidence in which they are able to spend when they are
out in town.
Due to the money that the government gives to the people who need extra
support, this does not affect Mcdonald's customers who have no job or are single
parents. This is an advantage for Mcdonald's as this will not affect their sales as
customers will no jobs are still likely to purchase at Mcdonald's because of the
money they get off the government.
in terms of the market it operates in.
This report will be analysing the effects of fiscal and monetary policies for
Mcdonald’s, looking at the pros and cons. There are many pros and cons of these
policies on Mcdonald's because money that they give to the government such as tax,
that money gets spent on public things such as healthcare and transport. However
there are cons as well such as interest rates when borrowing money from the bank
when the interest rates are sky high.
The pros of the fiscal policy on Mcdonald's are:
1. Tax
It is always an advantage if tax is paid and if the tax is very low because that
means not much money is being cut out of the profit made. By Mcdonald's paying
tax, that money will go towards public spending such as transport which means
there would be better roads build and railways. Also if any road conditions
deteriorates then the roads will be rebuild which is good because Mcdonald's
have to have their ingredients and products delivered to them and that can't
happen if the conditions of the roads are really bad. With the roads conditions
being good, Mcdonald's would react by increasing their sales by having more
ingredients and products delivered to them so this is a huge benefit to
Mcdonald's.
2. Budget Surplus
This is when the government spending is less than their tax revenue. This is good
because it means the government’s tax revenue will be equal with people's
disposable income so it will not affect it. For Mcdonald's their sales and profit are
likely to increase as people will have more spare cash available to spend on
themselves as they would be able to afford it. With this happening, Mcdonald's
would mostly react by selling more quantity of each of their products and making
more products to increase their profit for maximum output.
3. Public spending (benefits)
The income tax and corporation tax that Mcdonald's pays goes towards the
benefits such as jobseekers allowance, income support and child benefit etc. This
means that people who don't have jobs or single parents who have struggle for
money get support from the government which means that they still have money
in their pocket. This is good because it gives people that extra money and
restores some of their confidence in which they are able to spend when they are
out in town.
Due to the money that the government gives to the people who need extra
support, this does not affect Mcdonald's customers who have no job or are single
parents. This is an advantage for Mcdonald's as this will not affect their sales as
customers will no jobs are still likely to purchase at Mcdonald's because of the
money they get off the government.
