BMP4003 Business Environment Exam Paper 2022/2022

This is a solved exam paper for BMP4003 Business Environment for Semester 2, Examination 2021/22. It includes short answer questions and essay questions on topics such as monetary policy, fiscal policy, economic growth, unemployment, and the economic cycle. The paper also includes a reference list for further reading.

BSC (Hons) 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) Briefly describe and explain how the Monetary Policy Committee (MPC) impact
the inflation rate?
Answer 1
The monetary policy committee is fixed the interest rate in the country or nation.
This committee is mainly created by the central government. The meetings of this are
organized four times in year at least (Shayganmehr and et al., 2021). It is prepared with
nine members including governor, chief economist, four external members and three
deputy governors. The main purpose of the MPC committee is to stabilize the cycle of any
enterprise, to give or furnish the stability of the price reasonable, to help in high or fast
growth of the economic. They all are maintain the financial stability. This committee is the
body of decision making for the monetary policy under the regime of inflation targeting.
They has been set the inflation rate by 2%. If this rate is equal and less than the 2% then it
will be very good or better for the economy of the UK. It manage or monitor the rate of

interest as well as rate of inflation with the help of maximize the rates of bank, cash
reserve ratio, repo rates, by buying the currencies of new other nations, regulating the
supply of monetary term and availability of the credit.
2) Explain the effectiveness of the fiscal policy in economics?
Answer 2
Fiscal policy: It is the utilization of the spending of government and taxation to affect the
economy and macroeconomic situations. The government of the country basically utilize
the fiscal policy to promote the strong and sustainable growth and minimize the poverty
(UKA, FEJZA and ISMAJLI, 2018). At the time of the recession, the government may
decrease the tax rate and enhance the spending to encourage the demand and vice versa,
if there is inflation then they rises the rates and reduce the spending.
Effectiveness of the fiscal policy:
The effectiveness of this policy is basically based on the balance among the taxation and
spending. The government of the country tax their citizens in manner to redistribute wealth
in order to better suit the requirements of all influenced human beings. Reducing the taxes
for a specific groups provides persons more money to expend that can in some cases,
improvement of the economy of nation through enhancing the demand of the costumer.
3) What can a government do to promote the economic growth? Use examples to
illustrate your points.
Answer 3
A government utilize the several measures to increase the growth of the economy in the
nation. The most common way of enhancing the economic growth is managing the
balance among supply and the demand policies. In the manner of promoting the growth of
the economy the government focuses on these four major features such as land, capital,
labour and entrepreneurship (Wang and Zhang, 2020). The development and utilization of
these aspects are expressed below:
 Land: It is not only involves the natural resources but it contains the value of the
commercial real estate. It provides two advantages like having the renewable
resources and real estate value (Wannapan, Chaiboonsri and Sriboonchitta,
2018).
 Labour: It refers to those person who are authorized for creating the
commodities. It involves the employees, salespersons, managers and so on. The
government of the country also furnish the number of training program for their
growth and development.
 Capital: It is very crucial part for the firms to have sufficient amount of the capital
in order to enrich the economy so that they can expend and make investment in
earning the profits. The government maximizes the production plants and
equipment that enhance the manufacturing procedure and generate the capital.
 Entrepreneurship: It is the element that is helpful in making the innovation
behind the overall production procedure. The entrepreneurs merge the elements
that produce the commodities. These are the procedure of production internally.
4) Briefly explain the different types of unemployment and methods used to
measure them?
Answer 4
The unemployment contains a situation where a human being actively searching for job
but is unable to search work. It refers to the key measure of economy health. It happens
when the employees who want to do work are unable to select or search out the job.
Types of unemployment:
There are four types of unemployment those are discussed below:
 Frictional: It refers to the short lived. It happens when individuals voluntarily
change the job or move to another job or field. After leaving the company, it takes
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time to search another job. For example- fresher who just completed their
graduation.
 Cyclical: It is the variation in unemployed workers over the manner of economic
upwards and downwards for example changes in oil price.
 Structural: It consists the technological change in the framework of the economy
in that the labour markets run. Technological changes can cause to
unemployment between employees displaced from their jobs that are no
requirement for long time period.
 Institutional: It refers for long time period or permanent institutional elements
and incentives of the economy such as government policies that provides the
high minimum wage floors, programs of social benefits and licensing laws
(Webber and Dymski, 2021).
Methods that are used to measure the unemployment:
There are two methods that are utilized in measurement of the unemployment:
1. The method of counting: it estimates the number of unemployed directly.
2. The indirect method: it estimates the number of human beings employed at
specific time or between the one date and other.
5) Identify and describe the four stages of the economic cycle?
Answer 5
The fluctuation of the economy among the growth and the recession is called the
economic cycle. It involves gross domestic product, costumer spending, total
employment, rates of interest can aid to determine the present stage of cycle of the
economic.
Stages of the economic cycle:
1. Expansion: At the time of the growth, the economy faces or experiences faster
growth, interest rate tend to be very low, the manufacturing maximized and the
pressure of the inflation build.
2. Peak: It is reached when growth hit their highest rate. The peak growth generally
creates some improper or imbalance in the economy that required to be
corrected.
3. Contraction: It happens with the help of contraction period when the growth
slows, employment reduces and the price stagnate.
4. Trough: It is reached when the country’s economy meets at low point and then
growth starts to recover.
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.]
Answer 1
The macroeconomics rise due to the factors that are basically affected by the fiscal policy,
geopolitical and natural event that has the effect on the national and regional economy.
The lockdown that has occurred due to the covid-19 pandemic has majorly influenced the
economy negatively. It has been affected not only the one specific country or nation but
also all over the world (Yasir, Majid and Qudratullah, 2020). The case of this pandemic
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risen in December 2021 has lead the UK’s government to pose the obligations or
restrictions in manner to limit the transmissions. The economy of the UK get shrunk at high
speed within the lockdown period. There are discussed the major economic effects that
are enact due to the pandemic:
 The GDP has been reduced by 9.7% in 2020, this is the sheer drop between the
records that started in 1948.
 When the first lockdown was enacted, the GDP of UK was 25% less in April, 2020.
It was two months earlier than the last month February.
 This pandemic has been influenced or affected several area such as social,
entertainment and hospitality.
 The reduction was not severe at the time of the lockdown.
 When the lockdown was enacted continue then it has been decreased the annual
GDP of UK by further 1.9%. The impact on the economy was enacted of robust
limitations that was worse than the actual policies of the lockdown.
 The execution of the guidelines of social distancing affected the services sector in
field where the proximity matters.
 The economy of the nation gets contracted due to the enacted limitations or
restrictions.
 There were number of the individuals who lost their jobs. It has been claimed 5-7
times than the normal rate.
 The report of the gross domestic product also showcased that services decreases
sharply because of reduce by 5.6% in the health spending. The practices in
manner of test and drop fell almost 70% in April.
 The bills of the energy in April slogged by 54% and also the taxes of payroll gone
unexpectedly.
 The industry of the production decreases by 1% as per the report that is suggested
and shortages in delivery was also noticed. The construction has been also seen
by falling with 4%.
Answer 2
The sustainable economic growth term is broad term that is expressed as rate of
growth that is managed without preparing other crucial economic issues for the
population of developing world. It takes the individual wants and needs but in the
way that sustains the natural factors or resources and also the scenario of future
generations (Кulakovskaya, 2022). The growth of the economic involves the
manufacturing of economic commodities and also services to provide the
satisfaction of their needs and wants. It desires for supporting the factors for further
generations. The term sustainable means the rate at which the expansion or
growth should not emphasize any particular pressure on the costs of commodities
and does not stimuli the depletion of the raw and natural resources. It consists the
consideration of various features:
 The scenario or environment gets harmed because of the extraction and depletion
of individual aspects.
 An ecosystem is an essential for the human beings to survive and if destroyed, it
would destroy ourselves.
In the economy of the country, if the capital goods get enhanced in manner to
generate the growth of the economic are development in the technology, growth of the
work force and maximize in the capital of human beings. There are several methods or
system to evaluate the economic growth.
1. Gross domestic product: It evaluates the growth of the nation’s economic in
numerical term or the expenses. With the help of considering the illustration of
steel industry, where the efficiency of the outcomes requires only the tracking or
monitoring of dollar value all steel for a specific period. But this method faces
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from the number of issues of statistical. In order to present the contribution of
the technical and organizational innovation. It has been seen that the reason
behind becoming the efficient economy is not movement of the dollars over it
but the usage of the factors are more productive.
2. Gross national product: It is utilized to evaluate the total income of the
resident of the nation in the specific given time period and its usage through the
residents of that specific nation. It computes the total income that accumulate to
the generation or population over the time period that is provided. It does not
contemplate the income that rise to the non-resident of the nation, it is only
authorized with the evaluating of the efficiency.
Reference List (if Any)
Shayganmehr and et al., 2021. Industry 4.0 enablers for a cleaner production and circular
economy within the context of business ethics: A study in a developing
country. Journal of Cleaner Production, 281, p.125280.
UKA, A., FEJZA, E. and ISMAJLI, A., 2018. CENTRAL BANK OF KOSOVO IMPACT
INTO ITS ECONOMIC CYCLE. Journal of Academic Research in
Economics, 10(1).
Wang, Q. and Zhang, F., 2020. Does increasing investment in research and development
promote economic growth decoupling from carbon emission growth? An empirical
analysis of BRICS countries. Journal of Cleaner Production, 252, p.119853.
Wannapan, S., Chaiboonsri, C. and Sriboonchitta, S., 2018, January. Macro-econometric
forecasting for during periods of economic cycle using bayesian extreme value
optimization algorithm. In International Conference of the Thailand Econometrics
Society (pp. 706-723). Springer, Cham.
Webber, D. and Dymski, G., 2021. How will the effects of Covid-19 on macroeconomic
demand and supply affect firm-level productivity?. In Productivity and the
Pandemic (pp. 237-249). Edward Elgar Publishing.
Yasir, M., Majid, A. and Qudratullah, H., 2020. Promoting environmental performance in
manufacturing industry of developing countries through environmental orientation
and green business strategies. Journal of Cleaner Production, 275, p.123003.
Кulakovskaya, D., 2022. Social insurance against unemployment: belarusian and
international experience.
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