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Identify how government policies impact on a selected business - Currys.

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Unit 38 P2 Subject: The impact of government policies Introduction The government produces policies that influence the UK economy in order to gain better living standards for the country. The government?s main objectives are: Economic growth, controlling inflation and maintain good employment levels. Fiscal Policy involves changing government spending and taxation. When demand is low the government may lower taxes to increase public spending or increased government spending can stimulate demand. Monetary policy involves influencing the supply of money, by controlling interest rates. Interest rates affect consumer spending and saving which also influences demand and inflation. A rise in interest rates affect businesses, customers may have less disposable income causing a decrease in demand and costs will increase A rise in corporation tax will mean that businesses will have less profit and may decide to cut their costs by making employees redundant or increase their prices in order to make more profit. This will affect unemployment rates if employees are let go. ...read more.


This policy also makes sure that one business does not control a market and that competition is fair. The Competition Act 1998 is used to stop businesses preventing competition like: 1. When two or more businesses agree to sell a specific product or service at the same price 2. Businesses limiting supplies so that demand is driven up to make prices increase 3. Businesses that become too dominant If other businesses in the same market as Curry?s dominated the market this could really affect the amount of customers they get and their profit. Increased competition can help ensure that Curry?s offer their customers the best products at the best prices. Fiscal policy involves government spending and taxation to increase economic activity. If income tax is lowered consumers will have more disposable income, which means an increase in demand, and more sales for Curry?s. They may also employ more people. If income tax is increased it will mean that the government will have more money to spend, it is important to keep a balance between taxation and government spending money as this also affects inflation, employment and demand. ...read more.


Each region will have different issues that need to be addressed and this happens because of regional policy. If there is an area that is suffering and has high unemployment the government may invest in Curry?s expanding to that region in order to create jobs for the people there. Environmental policy ensures that changes to the environment do not have harmful effects on nature, humans and natural resources. The Climate Change Act has the following targets: 1. A climate change risk assessment must be conducted every five years 2. A programme has to be put in place to reduce climate change risks 3. Public authorities and some companies, must report on what they are doing to reduce climate risk 4. A climate strategy has to be published. When expanding their business Curry?s has to take into consideration how their building and what they are building may affect the environment, they may also have to spend money to change their existing buildings in order to positively impact the environment. Conclusion Through time policies are changed, developed and created by the different people in government, these all affect the economic environment and the way businesses operate. ...read more.

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