Unit 38 Business and Economic Environment

4792 Words Jun 9th, 2013 20 Pages
Unit 38:
Unit code: QCF Level 3: Credit value:

Business and the Economic Environment
T/502/5500 BTEC National 10

Guided learning hours: 60
Aim and purpose
The aim of this unit is to introduce learners to the interaction between the general economic environment and business activity and how the interactions generate national wellbeing. Learners will study how government activities regulate and influence business activities and how business activities influence government action and policy.

Unit introduction
Businesses operate in an environment shaped by the government. Government seeks to control the general level of prices (inflation), employment levels, economic growth and the balance of payments. A range of techniques is
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; regional policy; environmental policy

2 Know how government spending impacts on businesses
Government spending: public services via central and local government agencies; private and voluntary sector business organisations; deficit funding; government spending and the multiplier mechanism; local impacts of funding; private finance initiatives

3 Understand fiscal and monetary policies and the effects on spending
Fiscal policy: direct and indirect taxation; capital allowances; impact of changes on costs, aggregate demand and tax free allowances; potential annual revision; public finances; public sector borrowing; comprehensive spending review; pre-budget report; budget; re-distribution of income Monetary policy: aggregate demand and trading conditions; monetary policy; interest rate changes; inflation, employment levels; investment decisions; impacts of actual and anticipated changes

4 Know how the international economy affects UK businesses and competition
European factors: role of European Union (EU); performance of European Union economies; European policies eg agriculture (CAP), business, growth, employment, education, economics and finance, employment, environment, science and technology, regional, external relations, social; the European Monetary Union (EMU) Global factors: World Trade Organisation (WTO); trading blocs; stock market fluctuations; credit availability; global warming; political stability, war; industry-specific developments (oil, gas,
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