External influences - political Flashcards

1
Q

What are some external political influences?

A
Government policies (Brexit, New enterprise zones)
Tax (Fiscal policies)
Interest rates (monetary policies)
Competition regulation (CMA)
Privatisation/Nationalisation
International trade barriers
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2
Q

How will Brexit impact businesses?

A
  • inabilities to trade with free movement
  • worser supplier relations
  • greater barrier to entry
  • Losing market share in the EU
  • Immigration changes leading to employment issues
  • Import and export taxes
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3
Q

How will New enterprise zones impact businesses?

A
  • incentives businesses to work

- special economic zones leading to agglomeration and clustering which over time can lead to certain benefits

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4
Q

What are fiscal policies?

A

the use of government spending and tax policies to influence economic conditions

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5
Q

How do fiscal policies impact businesses?

A
  • less willing to spend money (public and businesses)
  • Boosts public businesses and general infastructure
  • less disposable income
  • can increase corporate taxes
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6
Q

What are monetary policies?

A

Monetary policy involves changes in interest rates, the supply of money & credit and exchange rates to influence the economy.

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7
Q

How do monetary policies impact businesses?

A
  • easier borrowing for businesses causing growth
  • incentive to save
  • less consumption
  • more consuming spending
  • discourage workers
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8
Q

How does competition regulation impact businesses?

A
  • price competitions leading to pricing wars
  • increased choice (substitutes)
  • less monopolies
  • fairer market and growth
  • increased chance of innovation
  • dynamic efficiency
  • manages merging and takeovers
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9
Q

What is the CMA? and what do they do?

A

Competition and market authority. They investige mergers and takeovers.

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10
Q

How does privatisation and nationalisation impact businesses?

A
  • efficient planning and contingency plans
  • improves economic welfare
  • financial freedom
  • better flexibility
  • saves money with better consumer relations
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11
Q

What is privatisation and nationalisation?

A
privatisation = the transfer of a business, industry, or service from public to private ownership and control e.g. royal mail
nationalisation = he transfer of a major branch of industry or commerce from private to state ownership or control e.g. Bank of England
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12
Q

How do international trade barriers impact businesses?

A
  • free trade leads to cheaper C.O.S
  • cheaper movement of supples
  • possibly reduces exports and increase taxes
  • exploitation of poorer countries
  • allows outsourcing for large TNCs
  • Easy negotiations with agents
  • better synergy with foreign markets e.g. promotional campaigns
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