Unit 38 M2
M2: Analyse the effects of fiscal and monetary policies for Balfour Beatty in terms of the
market it operates in.
In this assignment, I will be analysing the effects of fiscal and monetary policies for Balfour
Beatty and how it might affect their future plans.
Fiscal and monetary policies affect Balfour and Beatty in many ways. There are two types of
monetary policy that the government of the country may decide to apply. They are the
expansionary monetary policy and the contractionary monetary policy. With the
expansionary monetary policy, it helps speed up the economy of the country because of the
increase in interest rates and the high amount of supply within the economy. It helps
private sector based businesses like Balfour Beatty to borrow more from the banks and also
save more at the same time. Contractionary monetary effects the economy of a country as
it decreases interest rates. Mostly this is done to control the inflation rate of the country. It
slows down the economic growth of the country, decreases employment rate of the
country, reduces private businesses from borrowing and spending by both businesses and
individuals.
With the fiscal policy, tax rates are bound to increase or decrease. There are two types of
fiscal policy that the government of the country might decide to establish. They are the
expansionary fiscal policy and contractionary fiscal policy. With the expansionary fiscal
policy, the government decides to increase spending and lower tax rates of the country.
They do this in order to increase spending in the country and boost the economy of the
country. With contractionary fiscal policy, the government decides to reduce spending and
increase tax rates of the country resulting in the economy of the country to slow down.
If interest rates increases than Balfour Balfour will decide to build more and may decide to
invest more into banks and decide to build more infrastructures for private industries as
they will expect a higher interest rate from them.
If tax rates are high than Balfour Beatty won’t be able to achieve their aims and objectives
such as, becoming the leading infrastructure company and providing effective services to
their clients. This is because for more projects, they will have to pay more tax. If tax is
decreased than there is more possibility of Balfour Beatty to expand their territory into
further countries as they will have to pay less tax for all of their projects.
M2: Analyse the effects of fiscal and monetary policies for Balfour Beatty in terms of the
market it operates in.
In this assignment, I will be analysing the effects of fiscal and monetary policies for Balfour
Beatty and how it might affect their future plans.
Fiscal and monetary policies affect Balfour and Beatty in many ways. There are two types of
monetary policy that the government of the country may decide to apply. They are the
expansionary monetary policy and the contractionary monetary policy. With the
expansionary monetary policy, it helps speed up the economy of the country because of the
increase in interest rates and the high amount of supply within the economy. It helps
private sector based businesses like Balfour Beatty to borrow more from the banks and also
save more at the same time. Contractionary monetary effects the economy of a country as
it decreases interest rates. Mostly this is done to control the inflation rate of the country. It
slows down the economic growth of the country, decreases employment rate of the
country, reduces private businesses from borrowing and spending by both businesses and
individuals.
With the fiscal policy, tax rates are bound to increase or decrease. There are two types of
fiscal policy that the government of the country might decide to establish. They are the
expansionary fiscal policy and contractionary fiscal policy. With the expansionary fiscal
policy, the government decides to increase spending and lower tax rates of the country.
They do this in order to increase spending in the country and boost the economy of the
country. With contractionary fiscal policy, the government decides to reduce spending and
increase tax rates of the country resulting in the economy of the country to slow down.
If interest rates increases than Balfour Balfour will decide to build more and may decide to
invest more into banks and decide to build more infrastructures for private industries as
they will expect a higher interest rate from them.
If tax rates are high than Balfour Beatty won’t be able to achieve their aims and objectives
such as, becoming the leading infrastructure company and providing effective services to
their clients. This is because for more projects, they will have to pay more tax. If tax is
decreased than there is more possibility of Balfour Beatty to expand their territory into
further countries as they will have to pay less tax for all of their projects.
