External Factors- Political

Question 1

What are external factors?

Answer 1

Different situations that impact on the success of the business that arose from the outside

Question 2

What are political factors?

Answer 2

Decisions made by the government e.g. laws, legislation and taxation

Question 3

Political factor examples and impacts:

Answer 3

Income tax change- consumers earn more which results in increased sales
Law/legislation change- environmental law creates a positive image and attracts customers
VAT change- increased results in costs being higher are less profits
Corporation tax change- increased results in limited finance and increased costs so staff may be laid off
Public spending on infrastructure- if money is spent on road there will be less complains

all fiscal policy

Question 4

What is economic policy?

Answer 4

The behaviour of the government in influencing the economic performance of the country. This can be through taxation, government spending or interest rates

Economic policy covesr fiscal policy and monetary policy

Question 5

What is fiscal policy?

Answer 5

Government actions regarding taxation and government spending

Question 6

What is monetary policy?

Answer 6

central banking actions regarding money supply and interest rates

Question 7

What is competition policy?

Answer 7

Competition and Markets Authority (CMA) promotes competition for the benefit of consumers.
Competition is promoted because it keeps prices low, customer service is high and products and services are high quality

Question 8

What are impacts of competition policy?

Answer 8

Cartels- working with other organisations to fix prices (fined or prison)
Mergers- they can be blocked if they will lessen competition dramatically
Anti-competitive behaviour- charging drastically low prices, paying low prices to suppliers or or controlling the supply of goods to the market