BMP4003 Business Environment Exam Paper 2021/22

This is a solved exam paper for BMP4003 Business Environment for Semester 2, 2021/22. It includes short answer questions and essay questions on topics such as Monetary Policy Committee, government policies for economic growth, effects of decreasing interest rates, types of unemployment, economic cycle, macroeconomic effects of COVID-19 lockdown on UK economy, and achieving sustainable economic growth. The paper also discusses different methods of measuring economic growth.

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?
Monetary Policy Committee is basically accountable for fixing the benchmarks for the rate of
interest in the country. In addition to this comedy basically is constructed by the central government
and it is also governed by the governor of the central Bank of the specific nation this committee is
also accountable for setting the rate of inflation or interest rate for the short period of time which
actually brings the inflation in to the nation this respective committee also fixed repo rate that is
very crucial in relation to accomplishment of the target of inflation. Inflation target is known to be
the policy of the bank which adjust the term of monetary and accomplish the yearly rate of the
inflation. Moreover to this monetary Policy Committee majorly concentrate that they fix the rates so
that there is no enhancement and increment in the range of the goods and services. Maintaining the
different rates effectually and observing the influence of the inflation is one of the crucial effect on
the specific committee which makes on the fluctuating of the rate of inflation. This respective
committee involves of the members that are part of the process of decision making in relation to
fixing the repo rate as well as the statutory rate. These member of the board are involves of few
deputy governors as well as other senior members
2) What can a government do to promote economic growth? Use examples to illustrate your
points
Legal government utilise several measures in order to promote the growth of economy in the
nature and one of the best way of promoting the growth of economy is managing the balance among
supply side policies with the demand side policies (Kwok, Watabe, and Koh, 2022). In addition to
this in relation to promoting the growth of economy government of the Russian concentrate on
several major elements effectively as well as efficiently. The growth as well as utilization of these
are described below in brief.
 Land- Land basically means to the natural resource but it has the birth and value in relation
of commercial real estate. In addition to this island also offers major advantages in which
one of them is it is known to be the renewable resource and other one is that it has the value
of the real estate. Legal authority is executes measures in relation to safety of the forest.
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 Labour- they are the members that are accountable for reducing the services as well as
products. And these members are known to be the managers, workers, supervisors,
engineers, sales people and various others to get in addition to this possessing the intelligent
as well as hardworking employees brain creativity as well as innovation in the nation. Legal
authorities offer several programs of training for the development of their labour.
 Capital- In relation to develop the economy it is crucial for the commercial businesses in
order to possess adequate amount of investment so that they can focus on investing as well
as spending in order to earn more and more income. Legal authorities or government
increasing the production plants as well as tools that enhance is the manufacturing process
and also generate income
3) Identify and briefly explain the main effects of decreasing interest rate on the economy?
Decline of the rates make the money more cheaper for the process of growing. The decline in
the rate of interest motivates the buyers in order to invest as well as spend in the resources and set
and also enhance the prices of their resources. In addition to this decline in the rate of interest have
both negative as well as optimistic influence on the economy that is described below in brief.
Positive impact- It makes the consumers In order to pay low rate of interest and offer them the
authority in order to spend and invest more. This gain the influence on the enhancement in the
spending in the entire economy. In addition to this farmers as well as the business is are also getting
more benefit cause of the decline in rate of interest and they have also the authority to by the tools
as well as equipment with minimum cost.
Negative impact- The negative effect of decline In the rate of interest is that the investors of the
foreign that focus on investing in the nation gets the returns lower on their investment they make.
And this return which is lower leads to decline in the demand of the local currency and also
minimization of the rate of exchange in the market area (Kheng, 2022).
4) Briefly explain discuss the different types of unemployment and the different methods
used to measure it them.
The four major types of unemployment are discussed below:
 Frictional unemployment- It Is known to with a temporary employment which is basically
caused by the drive of the employees from one area to the other area.
 structural unemployment- In this kind of employment it is basically because of the mismatch
in the employees needs and the kind of the task which is available in the industry. The set of
skills didn’t match the kind of the available job.
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 cyclical unemployment- This is basically caused by decline in the demand and there is not
adequate demand in the industry for the services.
 Seasonal unemployment- This occur through Several sectors and the employees are
available in different and various seasons
The methods of measuring which can be utilised in order to evaluate the unemployment is the
direct process that involves estimating the number of people that are unemployed and counting
directly in the nation. In addition to this another technique is indirect method which anticipated
through the minimization in the number of unemployment individual at a particular period of time.
5. Identify and describe the four stages of the ‘Economic Cycle’.
Economic cycle means to the fluctuation in the economy among the recession as well as time
period of the development in addition to this economic cycle provide assistance to the investors and
the commercial businesses in order to understand at the time when they are required to invest and at
what time they are required to pull their invested capital out from the industry (Huang, and et.al.,
2022). The stable stages of economic cycle are described below in brief.
 Expansion- In the growth and expansion the economy of the nation experience production,
low rate of interest, enhancement in the growth and development.
 Peak- The peak hits at the time when development and growth reached to its last level. This
also brings specific imbalance in the economy that requires to be corrected.
 Contraction- It is known to be the period of time where development and growth slows
down and the level of employment of the nation declines as well as the rates of the products
and commodities decay.
 Trough- It is known to be the lowest point in which the economy reach it’s the last point
and later that the development and growth starts and the things are improving in the
economy.
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. Discuss and explain the macroeconomic effects ‘Covid-19 lockdown’ has had on the UK
economy.
Macro economics impact intense is because of the factors of the macroeconomic that commonly is
the influence of natural as well as financial event which has the effect on the domestic as well as
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national economy (Haschka, and et.al., 2022). In addition to this in accordance to the recent
pandemic of COVID 19 lockdown Which has the major influence on the economy negatively and it
does not have only negative influence on one nation but it effected negatively globally created the
enhancement in the cases of the disease and virus which has been evaluated in the month of
December 2021 which has lead the legal authorities of United Kingdom in order to pose several
restriction in accordance to limit the parade of virus. The economy of United Kingdom got declined
at the rapid pace within the specific period of restrictions on lockdown.
 The GDP declined by 9.7% in 2020, this is the sheer drop among the records that began in
1948.
 When first lockdown was imposed, UK GDP was 25% lower in April 2020 that it was only
two months earlier than February.
 The pandemic has therefore affected various sectors such as social, hospitality and
entertainment.
 The decline was not so severe during first lockdown.
 The energy bills in April hiked by 54% and also the payroll taxes went up unexpectedly.
 The manufacturing industry fall down by 1%, as the report suggest and shortages in supply
was also seen. The construction fell down by .4%
 The scenario of pandemic also showcased that the economy status was the headache for the
bank of England and governor (Farooq, and et.al., 2022).
2. Explain how an economy can achieve sustainable economic growth and analyse the
different methods of measuring economic growth?
The word sustainable economic development Is the broader Tera room that is known to be as the
rate of development which is managed without making other crucial economy issues for the citizens
of enhancing and emerging world. In addition to this it this basically takes into the consideration of
the requirements child desires of the people but in such a manner that basically sustains the
environment as well as also the natural resources of the generation for the future (Del Giudice, and
Cillo, 2022). The development of the economy involves the manufacturing of the economic
products as well as services and also the services in order to satisfy the requirements of the people.
Furthermore the growth of economy motivates for sustaining the assets for the generation of the
future. Moreover to this the sustainable growth of economy also refers to the rate at which the
development need not focus on any crucial pressure on the rates of the services or products and
does not basically lead to the decline of the natural resources and assets. This also involves the
consideration of various things which are described below.
 The environment gets damaged majorly because of the depletion as well as extraction of the
natural resources by the humans.
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 An ecosystem is crucial for the citizens in order to live and if these are destroyed then it can
be destroying the planet it as well.
There are various methods to measure the economic growth like-
1. Gross domestic product- It evaluates the growth of the economy in the terms of monetary or
the various expenditure. In addition to this considering this as the instance of the industry of
steel in which the productivity as well as performance of the output requires only the
monitoring of the value of the dollar as well as all the related to steel for a specific. Time but
this type of the technique suffer from the numerous of the problems that are related to the
statistics. Moreover to this in accordance to represent the involvement of the organizational
innovation as well as technical it is beneficial (Ahyani, and et.al., 2022).
2. Gross national product- This is basically utilised in order to evaluate the entire income of
citizens of the nation in a specific or given period of time and it is also utilised by the
citizens of the specific nation respectively as well as effectively and efficiently. In addition
to this it majorly calculate the entire are things that occur to the citizens for the specific time.
And it also does not consider the earning that enhances to the people that are non resident of
the specific nation. In addition to this it is only link to with the evaluation of the level of
productivity as well as performance.
Reference List (if Any)
Ahyani, H., and et.al., 2022. Standardization of Companies and The Islamic Business Environment
in Indonesia. Jurnal Ilmiah Ekonomi Islam, 8(1), pp.10-20.
Del Giudice, M. and Cillo, V., 2022. The Spiral of Knowledge Creation in a Dynamic and Evolving
Business Environment. In The Routledge Companion to Knowledge Management (pp. 15-
32). Routledge.
Farooq, S., and et.al., 2022. Understanding Relevance of Business Environment for Financial
Performance: The Case of Asian Non-Banking Microfinance Institutions. Vision,
p.09722629221081915.
Haschka, R.E., and et.al., 2022. The joint effects of financial development and the business
environment on firm growth: Evidence from Vietnam. Journal of Comparative
Economics, 50(2), pp.486-506.
Huang, H., and et.al., 2022. Assessing the role of financing in sustainable business
environment. Environmental Science and Pollution Research, 29(5), pp.7889-7906.
Kheng, Y.K., 2022. Serene Business Environment Moderated by Competitive Intensity on
Performance of Small and Medium Enterprises (SMEs) in Malaysia. Asian Social
Science, 18(9), pp.1-16.
Kwok, A.O., Watabe, M. and Koh, S.G., 2022. COVID-19 and the evolving business environment:
From the lens of three innovation theories. In COVID-19 and the Evolving Business
Environment in Asia (pp. 281-289). Springer, Singapore.
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