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How Government Spending Could Affect A Tile Business.

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Unit 38- D1 Government spending decision: The government can choose to spend on areas locally, nationally an European Level however if only one is used to spend government spending on then is still can have an effect on AL-MURAD, there can be negative and positive affects if they were spent on local areas and nationally then this can create contracts for AL-MURAD, in which unemployment rates will begin rising and people will have income to spend on luxury items and it can be beneficial for AL-MURADs due to people buying their luxury items in which product demand will rise which will then have a positive effect of their profit margin as it will begin rising. Education spending to reach £74bn. Chancellor Gordon brown’s budget promises cash increases for the next three years of 5.3%- 2.5% in real terms- to a total £74bn for 2010-11. http://news.bbc.co.uk/hi/eduaction/6474789.stm Looking at the above source here I can see that the government spending will be used on education showing that in another 3 years time it is likely for AL-MURAD to receive contracts for tiles to improve education facilities such as improving school standards and building. ...read more.


The government often try to get a balance in between the taxation in order for them to balance out the employment rate in the economy. Monetarists are based on the statement that the economy can be keeping up by measuring and manipulating the levels of money supply within the economy. So the money supply is the actual total amount of money available to be able to spend within the country. So monetary policy is the best tool for the government for controlling inflation within the UK. But it is seemed that inflation is created by overload aggregate demand in the economy. Looking at this there can be both negative effect on the overall economy as it according to the overall demand in products and services so if there is no demand then inflation will rise and people would have no job this will have a negative effect on AL-MURAD as there would be no demand on their products and it will be difficult to pay wages as no one is buying their products and here employees would lose their jobs and won?t have any money to buy luxury items this will become difficult for the overall products and services demand in the economy to get back in a flow(recession here is taking place) ...read more.


EU unemployment hits 20 million- Unemployment across the 27 EU member states reached 20 million in March http://news.bbc.co.uk/1/hi/business/8026546.stm looking at the above source we can analyse that the EU unemployment rate has gone very high it has hit 20 million, from this we can recognise that people have no jobs to earn any money this is having a negative effect on AL-MURAD as no-one will buy their products which will affect their company a lot because their profit margin will begin going down and lead them to make no sales. When the European Union begins to develop more than UK will change their currency to Euros as well as this would be beneficial for AL-MURADs as they would not have to pay the costs for exchange rates and it would allow them to compare prices better and set competitive prices. To make tiles you need right weather the reason why AL-MURAD receive their tiles from countries like Pakistan and other hot countries as UK does not have preferable weather to make tiles. So if Turkey became part of the EU then it would be beneficial for AL-MURAD as they would be able to receive the tiles at a very cheap price as no taxes as well there be any high security checks taking place, which money and time is saved. ...read more.

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