Determination of National Income for UK

Determination of National Income for UK

i) ii) iii) iv) v) vi)

The stock of factors of production Labour Capital Enterprise State of technical knowledge Political Stability

Explanation of the Government Economic Policy of UK

Explanation of the Government Economic Policy of UK

i) Economic Growth: The economic growth is most important for the Government of a country. For UK Government it has become more important as it is fighting to overcome the recession. UK faces the negative economic growth during the recession period. However, the expected growth rate for 2013/2014 economic year is 2.14 (Daily Mail, 2013). In order to achieve the expected growth rate the Government is encouraging the investment in the economy

Explanation of the Government Economic Policy of UK

ii) Inflation: In flatiron is general increase of the commodities that reduce the real value of the money. As inflection restricts the real growth of economy Government plans to reduce the inflation rate of the county. According to Bank of England the existing inflation rate in UK is 2.2% and the organization is planning reduce it to 2%.

Explanation of the Government Economic Policy of UK

iii) Unemployment: Current unemployment rate in UK is 7.5%. The highest unemployment rate is one of the major obstacles of the economy. This also recites economic growth as well as the distribution of income in the society. In order reduce the unemployment, the Government is encouraging the investment, the apprenticeships and developing the new business.

Explanation of the Government Economic Policy of UK

iv) Interest Rate: Lower interest rate encourages the investment and expenditure which keep the economy moving. This is why the UK Government set the lower interest rate in UK.

Explanation of the Government Economic Policy of UK

v) Government Spending: The UK government spends approximately 400bn a year. Over a third of this money goes in welfare benefits such as pensions, unemployment benefit and other forms of income support. The rest is spent on health, education, defence, roads, law and order and on supporting businesses and local communities.

Explanation of the Government Economic Policy of UK

vi) Taxation: UK Government is following a flexible taxation policy to encourage in investment in the economy. Vii) Legislation: Legislation are the laws that affect the way that a person or business can act. The UK Government spends over 400bn a year and takes about the same in taxes. It also passes legislation. These affect the way business can act, e.g. what it can produce, how much it costs and who it can employ. It also affects the way that consumers spend their money.

Impact of Macro-economic Environment of Business Organization

Impact of Macro-economic Environment of Business Organization

The main factors that affect the economic environment are: (a)Economic Conditions (b)Economic Policies

Impact of Macro-economic Environment of Business Organization

Important Economic Policies Industrial policy a) Monetary policy b) Fiscal policy c) Foreign investment policy d) Export-Import policy