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The Effect of National Policy on Business

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The Effect of National Policy on Business INTRODUCTION In this report I am going to research into how businesses are affected by policies towards- * Taxation * Benefits, subsidies and grants * Exchange Rates * Public Sector services * Changes in Interest Rates Using different sources I will find the pros and cons of each and also actual examples of where this has affected businesses in action. TAXATION There are lots of taxes that a business has to pay, including ones that you may not be aware you are paying. Some of the more obvious and major taxes that we are paying are - * Capital Gains Tax * VAT * Corporation Tax VAT is an indirect tax for most business actions taking place in the UK. ...read more.


For example the government are likely to subsidies book companies, as it will make the books cheaper for the buyers and then encouraging people to read. The government will subsidies newly formed businesses who will face intense foreign competition. EXCHANGE RATES When changing money from one currency to another, to find out how much money you should get for your previous currency, you must refer to the exchange rates. When your currency rises in value against other currencies it makes your goods more expensive to export. Government plays a role in deciding the exchange rates. The demand and supply of the pound sterling determine the rate. The fiscal and Monetary Policies may affect this. ...read more.


The government has then been able to keep an eye on the wage levels in the public sector as they pay the wages, although they can't keep such a good eye of the private sector as they have no say in the running. CHANGES IN INTEREST RATES The Borrowing of money is what interest rates represent. The Bank of England decides the interest rates; they can change the way in which the economy works in accordance to where about we are in the economy life cycle. They can influence the economy by putting borrowing prices up to make the population save and also they can put the price of borrowing down so that more people will borrow money and so therefore will spend more. This can effect the economy because it affects how much money is going in and out of the economy. ?? ?? ?? ?? Andrew White 12c ...read more.

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