BMP4003 Business Environment Exam Paper 2021/22

This is a solved exam paper for BMP4003 Business Environment for Semester 2, Examination 2021/22. It includes short answer questions and section B questions with answers. The paper covers topics such as fiscal policy, interest rates, supply side policies, circular flow of income, macroeconomic factors affecting the UK during COVID-19 lockdown, and elements needed for sustainable 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
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Please type your answers in the spaces provided.
Insert additional pages where required.
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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?
Answer 1
Fiscal policy: It consists the fluctuation or changes in the revenue or expenses as well of
the government. The government has to control or monitor the taxes rates to endorse the
action or performance in the economy of the nation. It is required to accomplish with the
policy of monetary to monitor or control the supply of the money in the economy. It is
imitative from the great economist of UK. His name is John Keynes.
Effectiveness of the fiscal policy:
 The main purpose or aim is to create the policy to manage the balance among the
expenses on the ordinary public or human beings and the rates of the taxes so the
government always deeds to improve or develop the economy with the help of
rising the expenditures to the public (McCann and Vorley, 2021). It means the
lower taxes because of the increased the expenditures.

 It assists to correct the condition or situation of the inflation through decreasing the
expenditures or maximizing the rate of taxes and vice versa in the case of the
recession or deflation. It aids to sustain the economy and the performance of the
firm at highest level to ignore or decline the any changes in the economy. It furnish
the commodities to consumers at the reasonable cost.
2) Identify and briefly explain the main effects of decreasing interest rate on the
economy?
Answer 2
The lower rates makes the monetary value cheaper for the borrowing procedure. The
reducing interest rate indorses the buyers to expend and invest in the assets and
enhance their value or prices of the assets. It have both the impact positive as well as
negative on the economy of the nation that is discussed below:
 Positive effect: It makes the consumers to do less payments of the interest and
furnish them power to expend more. It helps to bring the effect of enhanced the
spending in the whole economy (Petrů, Havlíček and Tomášková, 2018). The
business enterprise and the farmers are able to get the advantage of because they
provided them power to purchase the assets and equipment at low cost.
 Negative impact: The effect of reducing the interest rate is that the investors of
the foreign nation who finance in domestic country get less return on the
investment which they make and the less returns stimulus to decline in the
demands of the base nation or domestic currency and the reduction on the rate of
exchanges.
3) Explain the three main supply side policies to reduce the unemployment in the
country?
Answer 3
The main purpose of the policies of supply side is to decrease the employment of
structural and to focuses or concentrates on the factors of the microeconomic of the
employee market. The first policy is to enlarge the monetary value on the educational
functions or programmes to endorse the capital of human beings of unemployed labour
force. The government of the UK raise the factors or resources and employ the new
individuals with the new capabilities or talents in their inflexible economy (Liang and Yang,
2019). It aids to decrease the unmatched skills and capabilities in hiring the employees
and staffs as well. Another policy is to adjust or modify the movement of the geographical
of labour force. The expenditures of looking the new jobs in newly fresh area is prohibitive.
Thus, the government prepare the strategy to furnish accommodations to workers or staffs
and make them affordable. It will decline the tension of the private workers or employees
to seek the loan for buying home. It will enhance the demand of the workers and staffs.
The third policy is to furnish the good and decent working scenario or environment for
doing the work.
4) Draw and discuss what happens in the circular flow of income?
Answer 4
The circular flow of money refers to the model that states the flow of the commodities
among the various economies parties. The product and services is changed in term of the
monetary value that is evaluated by the several methods. It is the part of the macro
economies and examination of the accounts of national level. It aids to get to know the
flow of the monetary value or money in the market (Lewis, 2022). There are two parties
that involved that how the commodities moved from producer to the customer. It is the
more efficient method that involves the exports and imports of the commodities from one
country to another, supply of money in the market. The sum of all the factors provides the
outcomes in the form of GDP of the nation or the national income by following the norms of
fiscal and monetary policy.
5) Discuss the main cycles of the economy?
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Answer 5
Economy cycle: it consists the trade cycle. It is the procedure of changes in the market
through contraction or expansion of demand. It is evaluated by the fall or rise in the SDP
of the nation. It include the increasing the growth of the firm called expansion and other
side is known as the deflation it reduce the activity of the enterprise.
The economic cycle is defined into four stages that are mentioned below:
 Expansion: It considers as most effective or efficient situation that every
enterprise wants to reach. In this phase or stage, the production of the
organization maximize, redundancy declines, earnings enhances and the
development in the share market as well. The demand of the commodities rises.
 Peak: The economy has met up at highest level and it becomes hard to monitor or
control the economy out of the safe and healthy criteria. There are lot of number of
sources that are cause to create the imbalance in the market. The business is
expanding the monetary value in the outburst way (Ramjattan, 2019).
 Contraction: It relates to the strike of the practice of the economy and the
operations of the firm. In this case the joblessness rate enhances, decreasing in
the growth of the GDP of nation or the entry in the bear market.
 Trough: The cycle of the peak is the optimum point or the condition of the trough
is at the low point. It ensues when there is extremely fall in the deflation or
contraction phase or the firm begins to enter in the stage of the expansion.
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?
Answer 1
The factors of the macro-economics are the sources that has effect on the economy of the
nations at the highest level and comprises number of factors such as inflation rates,
political, monetary and the transaction of geopolitical that impact on the nation’s GDP.
There is high or deep effect on the economy performance that has affected all over the
world. The cases were risen at maximum level in the end month of the year December,
2021. The UK’s government has imposed various guidelines to deduct the possibilities of
spreading the pandemic among the human beings. The rate of death of the humans also
increases. There is slowdown in the progress of the growth of the economy of UK. The
effect on implementing the rules and policies in the pandemic:
 In the month of the august is first when there was no found any cases of
coronavirus. The guidelines in England that help in GDP by the percent of in the
July or August,
 .There were the normal condition in the initial stage of the lockdown in the UK. And
the rate of GDP decrease down by very less percent but after increasing the case
of the coronavirus the rate of GDP is reduced by 18%.
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 The rate of the exchange of UK fell down due to the exports. There were no
transactions between one countries to another. It decreases the level of GDP of
UK. The national income of the UK defines the flow of the monetary value from the
goods and services worldwide (Hiromoto, 2019).
 It deduct the level of foreign exchange currency in the domestic nation. It is the
most efficient and powerful currency in that the rate of another currencies is
pegged up.
 The production capacity of the economy of the country is reduced by the 5% as
there is no demand of the commodities of the consumers or ordinary individuals.
The level of the supply had fallen down because of the less requirements by the
creditors and suppliers. It reduces the GDP level of UK.
2) Explain the elements that is needed by the economy to sustain the growth and
describe the factors?
Answer 2
The viable economic growth means to maintain or manage the performance of the
financial in the current or the future period. It is attempted by the every nation to furnish the
satisfaction through completing the needs and wants of the costumer. It is noticed that the
nation’s economy works in the ecosystem (Astafeva and et al., 2019). These two terms
cannot be divided. The ecosystem gives the resources of the manufacturing that enhance
the growth of the economic, natural factors, land and the needs of the labour force. Viable
economic growth is take care of the factors so that they cannot be browbeaten and remain
conserved for the further time.
 The enervation and the natural source’s mining along with the pollution or the
variations is completed in the land is accomplished by the individual activities and
destroy or damage the situation of the environment.
 There are various elements that is damaged by the human beings who acquire the
advantage by destroying the natural resources. The level of the pollution is
increasing such as air, water or noise pollution. It has affected the health of the
individuals.
 The human beings survive in ecosystem and can live if is slanted by the persons
themselves.
There are number of techniques to compute or evaluate the growth of the economy-
1. Gross domestic product: It examines the economy growth of the nation in the
term of monetary. For instance, the steel industry, where the efficiency of the
outcomes requires only monitoring of dollar value all steel for a specific period but
this technique faces statistical issues. In order to presenting the share or
contribution of technical and enterprise modernisation. It has been noticed that
reason behind fetching the prolific economy is not the movement of dollars across
it but the usage of the elements more proficiently.
2. Gross national product: It is mainly used to gauge the total income of the local or
resident of the nation in a specific given time period. It is utilized by the resident of
the specified nation. It calculates the total earnings that amass to the inhabitants
over specific period of time. It does not contemplate the earnings that rise to non-
resident of the nation.
Reference List (if Any)
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Astafeva and et al., 2019, April. XBRL reporting in the conditions of digital business
transformation. In International Scientific Conference “Digital Transformation of the
Economy: Challenges, Trends, New Opportunities” (pp. 373-381). Springer, Cham.
Hiromoto, T., 2019. Restoring the relevance of management accounting. In Management
Control Theory (pp. 273-288). Routledge.
Lewis, M.A., 2022. Employment and Unemployment: Macro Social Work Perspectives.
In Encyclopedia of Social Work.
Liang, W. and Yang, M., 2019. Urbanization, economic growth and environmental
pollution: Evidence from China. Sustainable Computing: Informatics and
Systems, 21, pp.1-9.
McCann, P. and Vorley, T. eds., 2021. Productivity and the Pandemic: Challenges and
Insights from Covid-19. Edward Elgar Publishing.
Petrů, N., Havlíček, K. and Tomášková, A., 2018. Comparison of marketing vitality of
family and non-family companies doing business in Czech republic. Economics &
Sociology, 11(2), pp.138-156.
Ramjattan, V.A., 2019. Racializing the problem of and solution to foreign accent in
business. Applied Linguistics Review.
Shakeel and et al., 2020. Anatomy of sustainable business model innovation. Journal of
cleaner production, 261, p.121201.
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