External Influences-STEEPLE-political

Question 1

What are political factors?

Answer 1

Political risks and decisions that the business needs to consider

Question 2

What is the European Union?

Answer 2

Economic and political union of most European sates aimed at reducing trade barriers and harmonising economic policy

Question 3

What is the difference between the EU and Eurozone?

Answer 3

Eurozone-countries using € as their currency

Question 4

What is the European single market?

Answer 4

The market where a single common set of laws/regulations relating to the movement of products, people, money rather than having different regulations for each country

Question 5

What is the European single market based upon?

Answer 5

Freedom of movement, products, people, money and services

Question 6

What is free trade?

Answer 6

Trade without tariffs or quotas imposed when products are traded

Question 7

What are 2 trade barriers?

Answer 7

Tariffs

Quotas

Question 8

What are tariffs?

Answer 8

A tax/duty paid on imports

Question 9

What are quotas?

Answer 9

A limit on the total quantity of a product imported to a market

Question 10

How does a business benefit from being in the EU?

Answer 10

Freedom of movement of products-no shortages
No tariffs/quotas on imports-less costs-more price competitive
Freedom of movement of people-easier to employ others
Exports become more attractive to foreign buyers
No paperwork to get goods across boarders

Question 11

What are 3 arguments for the UK remaining out of the EU?

Answer 11

More domestic trade-as there are less imports but more local goods
Don’t follow EU rules/regulations-operate on their own rules
Can create trade deals with other countries-more access to produce

Question 12

What are 3 arguments for the UK re-joining the EU?

Answer 12

Increased recruitment
Less paperwork-less delays-decreased costs-exports more attractive
Regulations already in place-less to manage

Question 13

How did the uncertainty of Brexit impact businesses?

Answer 13

Investment stalemate
Reduced customer confidence
Weak pound

Question 14

What happens to exports if they have tariffs?

Answer 14

Less demand for them and imports may have increased in costs

Question 15

What are some political factors affecting businesses?

Answer 15

Leaving the EU
Competition policy changes eg.creation of CMA
Privatisation eg.gas part of private sector
Law changes or new legislations eg.changes to minimum wage
Economic policy eg.gov reduce spending
Employment policy eg.gov interventions
Political manifesto announcements eg.energy price caps

Question 16

What is political stability, give an example?

Answer 16

The government changes are limited

Eg.same political party with the same PM/cabinet members in power for an extended period of time

Question 17

What are some positive imitations of political stability for businesses?

Answer 17

Increased confidence to invest
Reduced need to leave domestic markets-as opposed to relocating to foreign markets
Helps to prepare for the future
Reduces risks associated with business decisions

Question 18

How might political instability impact international trade?

Answer 18

Protectionist policies-adding tariffs on international goods may cause retaliation from other countries, causing less imports/exports
Changing political parties/ideas-uncertainty over where policies will lead them-less international trade