unit 38

Learners should evaluate the impact of changes in the economic environment on a selected business in relation to government decisions, policies, spending and economic management. Learners need to examine the information and draw justified conclusions as to how the business might respond.

Learners are required to analyse the effects of fiscal and monetary policy decisions have on business. The “credit crunch” saw a temporary reduction in VAT and a fall in interest rates to historically low levels designed to stimulate demand. These changes illustrate the impact of fiscal and monetary policy at both a national and local level.

Learners should describe the implications for a selected business of European and global factors. Again, these will very between types of business and over time. However, some developments are long term. European requirements will continue to be incorporated in to UK legal and regulatory frameworks. Global warming will involve a continuing series of initiatives to reduce carbon emissions.

Learners should analyse the impact that government policies have on a selected business and the possible reactions of the business to the decisions. Planning approval for a high speed rail link has allowed the local train operating company to run services that use the same track as Eurostar trains. This requires the train operating company to buy new rolling stock and power cars. New engineering facilities and additional staff training from local providers will be needed and people will move in ...

Learners should consider the impact of changes to government spending on a selected business at a local, national or European level. If government spending is declining, demand for a business’s products or services will fall. This will have predictable consequences on the revenues, profits and employment for both the individual business and the economy as a whole. Learners can also analyse the likely impact on a selected business organisation of a significant change in the level of public spen...

Learners should explain the likely effect of variations in the economic environment on a selected business, by examining the business cycle and indicators that describe it, such as inflation, employment, growth and international trade. Learners should choose an appropriate business in order to examine the impact of any changes. A local example or a major national example will help ensure sufficient information is available.

learners must examine fiscal and monetary policies in relation to a chosen business. This will involve analysing the possible impact of changes in the tax regime, as well as interest rate changes, on a selected business’s operations. The range of possibilities is extensive and will vary over time so care will be needed in identifying what is relevant at any one time.

Learners need to consider the wide range of government policies that impinge on business and select those that have a significant effect on the selected business. The impact of policies will vary between businesses depending on their size, location and type of activity. It makes sense to use the same organisation as used for P1.

Learners are required to analyse the effects of fiscal and monetary policy decisions have on business. The “credit crunch” saw a temporary reduction in VAT and a fall in interest rates to historically low levels designed to stimulate demand. These changes illustrate the impact of fiscal and monetary policy at both a national and local level.