BMP4003 Business Environment Exam Paper 2022/22

This is the exam paper for BMP4003 Business Environment for BSC (Hons) Business Management Semester 2. The paper includes short answer questions and longer essay questions covering topics such as fiscal policy, economic cycles, unemployment, supply side policies, circular flow of income, macroeconomic factors, and sustainable economic growth. The paper also includes references to relevant academic literature.

BSC (Hones) BUSINESS MANAGEMENT
SEMESTER 2, EXAMINATION 2021/22
BUSINESS ENVIRONMENT
MODULE NO: BMP4003
Exam Paper Release Date & Time: Saturday 17 September 2022 at 10:00am
Submission Cut-off Date & Time: Monday 19 September 2022 at 10:00am
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ANSWER BOOKLET
All the pages of the answer booklet should be submitted including blank ones.
Please type your answers in the spaces provided.
Insert additional pages where required.
Student Name
ID Number
Section A
[There are 10 ‘short answer’ questions, you need to answer only 5 of them. You can
choose any 5 questions out of these 10 questions. All questions are worth equal marks
(10x5=50 marks). For each question, use separate heading such as “Answer to the
Question no. 1” or “Answer to the Question no. 2” etc.]
1) Discuss the efficiency of the fiscal policy in the economics?
Fiscal policy refers to the changes in the revenue or the expenditure of the government the
government has to monitor the rates of the taxes to promote the performance in the
country economy (Apriliyanti, and Kristiansen, 2019). It is enforced along with the
monetary policy to control the money supply in the economy. It is derived from the great
UK economist John Keynes.
 The objective is to build the policy to maintain the balance between the
expenditures on the public and the tax rates. So, government always try to develop
or grow the economy by rising the expenses on the public. It means the lower taxes
due to the increased expenses.
 It helps to correct the situation of inflation by reducing the expenses or by
increasing the tax rate or vice- versa in the case of deflation. It helps to sustain the
economy and the business performance at the optimum level to avoid any type of
fluctuations in the economy. It provides the goods and services to customers at the
reasonable price.

2) Discuss the main cycles of the economy?
Economic cycle refers to the trade cycle and is the process of changes in the market by
the expansion or the contraction of demand. It is analysed by the fall or rise in the GDP of
the country (Boojihawon, and Ngoasong, 2018). It is related to the increasing the growth of
business called expansion or on the other side known as recession reducing the economic
activity of the business.
The economic is divided in to the four stages that is discussed below:
 Expansion: It is the most effective situation that every company wants to reach.
In this phase the production of the business increase, unemployment reduced,
profit increases and the improvement in the share market. The demand of the
products and services rises.
 Peak: The economy has reached to the maximum level and it becomes difficult
to control the economy out of the healthy criteria. There are number of factors
that creates the imbalance in the market. The business is spending the money in
outburst manner.
 Contraction: It is related to the slowdown of the economic activities and the
operations of the business. In this case the unemployment rate increases,
declining in the GDP growth rate or the entry in the bear market.
 Trough: The cycle of the peak is the high point or the situation of the trough is
the low point. It happens when there is drastically fall in the recession or
contraction stage or company starts to enter in the phase of expansion.
3) Explain the several types of the unemployment and the methods to control
them?
Unemployment means when the person is searching for the job but not able to get a
job. There are various kinds of the employment that is mentioned below:
1. Cyclical unemployment: It is related with the changes in the total of
unemployed employees due to the phases of the weakness and the strength
of the economy. The decreasing demand of the goods and services will fall
down the production and thus it will create less demand for the employees
and decreases the job opportunities.
2. Frictional unemployment: It is the action of the workers who are dropping
the jobs on the voluntarily basis. The graduates who is searching the new
jobs for the first time and who resigned from the jobs forces to remain
unemployed. It is generally happen for the shorter period and find struggle to
take new job.
3. Structural Unemployment: It arises when people does not have the correct
qualification or the skills and to relocate them for the jobs. The job
opportunities are available but is difficult for employee to adapt because of
the rapid changes in the technology.
4. Seasonal Unemployment: It occurs generally for the short duration and
person leaves the job after the ending of the season. It means the reduced
demand of the employees which arises at every season end. It is more
forecasted as comparison to other types of the unemployment.
4) Explain the three main supply side policies to reduce the unemployment
in the country?
The main aim of the supply side policies to reduce the structural employment and to
concentrates on the microeconomic factors of the employee market. The first policy is to
augment the money on the educational programmes to enhance the human capital of
unemployed workforce. The UK government leads to raise the resources and to hire the
new people with the new talents in this inflexible economy. It helps to reduce the mismatch
skills in hiring the staff (Cartwright, Davies, and Archer-Brown, 2021) . The second policy
is to modify the geographical movement of workforce. The expense of seeking the new job
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in fresh place is prohibitive. Thus, the government make the strategy to provide
accommodations to employees and make them affordable. It will reduces the tension of
the private employees to take the loan for purchasing the home. It will increases the
demand of the employees. The third policy is to provide good working environment for
doing the work.
5) Draw and discuss what happens in the circular flow of income?
The circular flow of money is the model that denotes the flow of products and services
between several economic parties. The goods and services is exchanged in terms of the
money which is measured by various methods. It is the part of the macroeconomics and
here is the examination of the national accounts. It helps to know the flow of money in the
market. There are two parties included in this that how the goods transferred from
producer to the consumer. It is the more coveted method with the involvement of the
exports and imports, supply of money in the market (Gabryelczyk, and Roztocki, 2018)
. The sum of all the factors is the result of country GDP or the national income. It guides in
following the norms of the monetary or fiscal policy.
Section B
[Answer any two questions from section B, all questions are worth equal marks (25x2=50
marks). For each question, use separate heading such as “Answer to the Question no. 1”
or “Answer to the Question no. 2” etc.]
1) Explain the macro economic factors that has impact on the UK country in the
Coved 19 lockdown?
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Macro-economic factors are the elements that has impact on the economy at the broader
level and consist of many factors such as monetary, political, inflation rates and the
geopolitical transaction which effect on the GDP of the country.
There is deep effect on the performance of the economy that has impact on all over the
country worldwide. The rising of cases is at the high point in the month of the December
2021(Holbeche, 2018).The government of the UK has levied several guidelines to reduce
the chance of spreading the virus among the people. The death rate of the people also
increases. There is fall down in the progress or the growth in the UK country. The effect on
enforcing the rules in the pandemic-
 The month of August is the first when there is no case of coronavirus guidelines in
the England that assist in the GDP by the percent of 0.4 in the July or august 2021.
The GDP is fall down by the 0.8% in the February 2021. It was the current month
that is not impacted by the corona pandemic.
 In august, 2021 GDP has increased by 0.3% in sector of service and it was reduced
by the 0.6% in the March month. There is lot of challenges faced by the service
industry such as the hotel or the restaurant and the professional services.
 There is situation normal in the first stage of the lockdown in the UK and the GDP
fall by minor percent but there severe reduction in the rate of GDP by the 18
percent.
 There are lot of sectors suffered by this and there is the proper shut down of the
theatres, film industry, hotels and the tourist sector,
 The exchange of the UK country is fall due to the no transactions of the exports in
other country. Thus it reduces the level of foreign exchange currency in the country.
It is one of the most powerful currency in which the rate of other currencies is
pegged up.
 The capacity of production of the economy is declined by 5% as there is no demand
of goods and services of the customers. The supply level had fall due to low needs
by the creditors or suppliers. It reduces the level of gross domestic product of the
UK. The national income of the UK means the flow of money from the products or
services across the country at national level.
 The employment sector is also affected by this lockdown and the pandemic. It
forces many people to be jobless due to the shut of their business, or by reducing
the company capacity to retain them. It has major impact on the private sector as
there is no stability of the jobs. It becomes difficulty for the people to sustain the life
or to fulfil the basic requirements of needs.
 The economy of the UK has gone in to the cycle of the Contraction. It means there
is fall down in the business activities, recession means the price of every product
goes down, the unemployment rate rises and the fall down in the real estate sector.
 The major source of the government to increase the revenue is the taxes which is
fall down and the energy bills is hiked by the 54 percent suddenly.
2) Explain the elements that is needed by the economy to sustain the growth and
describe the factors?
The sustainable economic growth means to manage the financial performance in the
present or the future period. It is attempt of every country to provide the satisfaction by
fulfilling the needs and the wants of the consumer. It is noted that the economy of the
nation works in the ecosystem. These two terms cannot be separated. The ecosystem
furnishes the elements of the production that boost the economic growth, natural
resources, land and the requirement of the work force. Sustainable economic growth is
take care of the resources so that they cannot be exploited and remain preserved for the
future time (Leke, Chironga, and Desvaux, 2018)
.
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 The exhaustion and the mining of the natural sources along with the pollution or the
variations is done in the land is done by the human activities and damage the
environment condition.
 There are many factors that is harmed by the people who obtain the undue
advantage by harming the natural factors. The level of pollution is rising such as
the air pollution, water pollution or the noise pollution. It has critical effect on the
health of the people.
 People live in ecosystem and can survive if is distorted by the people itself.
There are multiple techniques to examine the growth of the economy-
1. Gross domestic product: It is analysed in the terms of the monetary value. Let’s
take an example of the steel industry that shows the output or productivity of the
products by monitoring the value of the dollar. It has to face lots of problem in
statistical data.
2. Gross national product: It is the method that analyse the sum of the total income
earned by the residents during the specific point of time and used by the citizens of
that specific nation. It does not included the income that earned by the non-resident
of the country.
Reference List (if Any)
Apriliyanti, I.D. and Kristiansen, S.O., 2019. The logics of political business in
state-owned enterprises: the case of Indonesia. International Journal
of Emerging Markets.
Arnold, D.G. and Bowie, N.E., 2019. Ethical theory and business. Cambridge
University Press.
Boojihawon, D.K. and Ngoasong, Z.M., 2018. Emerging digital business
models in developing economies: The case of Cameroon. Strategic
Change, 27(2). pp.129-137.
Cartwright, S., Davies, I. and Archer-Brown, C., 2021. Managing
relationships on social media in business-to-business
organisations. Journal of Business Research, 125. pp.120-134.
Gabryelczyk, R. and Roztocki, N., 2018. Business process management
success framework for transition economies. Information Systems
Management, 35(3). pp.234-253.
Holbeche, L., 2018. The agile organization: how to build an engaged,
innovative and resilient business. Kogan Page Publishers.
Leke, A., Chironga, M. and Desvaux, G., 2018. Africa's business revolution:
How to succeed in the world's next big growth market. Harvard
Business Press.
Subramanian, S., 2018. Stewardship theory of corporate governance and
value system: The case of a family-owned business group in
India. Indian Journal of Corporate Governance, 11(1), pp.88-102.
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