BMP4003 Business Environment Exam Paper 2022/22

This is the BMP4003 Business Environment Exam Paper 2022/22 for BSC (Hons) BUSINESS MANAGEMENT SEMESTER 2. It includes 10 short answer questions and 2 long answer questions. The paper covers topics such as circular flow of income, 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.

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) Draw and explain what happens in a circular flow of income?
A supply chain crisis, which increases the demand for working capital and drives up labour prices
as well as inflation rates, has been added to the already existing problem of the worldwide
pandemic. These disruptive elements all operate to limit the potential for economic growth.

Research has shown key issues that small and medium-sized businesses must carefully address if
they want to capitalise on them and contribute to the expansion of the economy in 2022. The local
government in the UK has stated that CPI inflation could reach 5% this year, which will increase
the cost of energy as the economy exhibits key signs of escalating inflation. As the shortage of
energy, skills, labour, and raw materials adds to the growing list of challenges that small and
medium-sized businesses will encounter in 2022, supply chain concerns have become more
pervasive than ever. These business models will also need to be able to distinguish between long-
term and short-term inflation, with some aspects of inflation—like the cost of labor—possibly being
unchangeable. Following a string of pandemics and lockdowns in the UK, small and medium
business owners are finally enjoying a comeback in demand for their goods and services. Many of
them are turning to finance to meet this expansion in demand (Seclen-Luna, and Morales, 2022). It
has been determined that SMEs depending on endowment in their early phases of growth will be
adversely affected by the current spike in inflation rates. Another significant obstacle is technology,
which many small and medium-sized businesses must overcome in order to digitise their operations.
Businesses in the UK are dealing with a debilitating supply chain catastrophe, with the bulk of
retailers' stock inventories falling to their lowest levels since 1983. By lowering transaction costs
and those associated with border and transportation limitations, the use of artificial intelligence and
digitalization can aid small and medium-sized businesses in their integration into global markets.
Additionally, it fosters innovation and creativity while enabling businesses to gather data and
information and look at their own operations in fresh ways.
2) What can a government do to promote economic growth? Use examples to illustrate your
points
An administration utilize different measures to advance financial development in the country one
of the well known approach to advancing monetary development is keeping up with balance
between request sides and the stockpile sides strategies. In regard to advance monetary development
government centers around four significant angles that are land, work, capital and business venture.
The turn of events and utilization of these are talked about beneath
 Land- A land isn't just refers to the regular assets yet it has the worth regarding business
land. So a land gives two advantages one is having a sustainable assets an another is land
esteem. Government executes measures in regard to safeguard the woodlands
 Capital- In regard to enhance the economy it is vital to for the organizations to have
sufficient measure of capital with the goal that they can spend and make interest in creating
gains. Government improves the assembling plants and types of gear that increment the
creation interaction and produce capital
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 Entrepreneurship- This is the element which is makes advancement behind the entire
presentation process. The business visionaries consolidation the variables that conceptualize
and deliver the item and administrations. These are the necessary piece of creation process.
Government supporting the marketable strategy of the new business visionaries in regard to
upgrade advancement in the country (Ofori-Sasu, and et.al., 2022)
3) Identify and briefly explain the main effects of decreasing interest rate on the economy?
Bringing down rates brings in the cash less expensive for the acquiring system. The lessening
loan costs urges the purchasers to spend and put resources into the resources and increment their
resource costs. Decline loan cost adversely affect the economy which is referenced beneath:
Positive impact- This makes the clients to pay less interest and empower them to spend more , this
gets the impact of expanded spending the entire economy(кulakovskaya, 2022) . Organizations and
the ranchers are likewise get benefit of in light of the fact that they empowered them to hardware
buys with minimal expense
Negative impact- The adverse consequence of diminishing financing costs is that unfamiliar
financial backer who put resources into our nation get lower returns on the contribute they make.
What's more, the lower returns prompts decline in the requests of the homegrown cash and decrease
on the trade rates.
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 the temporary job loss brought about by development of
specialist starting with one spot then onto the next.
 structural unemployment- This kind of joblessness is because of muddle in the laborers
necessities and the sort of work accessible on the lookout. The abilities didn't match the kind
of occupation accessible
 cyclical unemployment- It is brought about by decline in the interest , there isn't sufficient
interest in that frame of mind for the administrations.
 Seasonal unemployment- This occurs by as various businesses and work are accessible in
the various seasons
The estimating strategies that can be utilized to quantify the joblessness is immediate strategy
which incorporates direct counting and assessing the quantity of jobless individuals in the country.
One more technique is backhanded strategy which assessed by the decrease in the quantity of the
jobless individuals at a predefined time span
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5. Identify and describe the four stages of the ‘Economic Cycle’.
Financial cycle refers to the variances in the economy between the time span of development and
downturn (Nayal, and et.al., 2022). Financial cycles helps the financial backers and the associations
to comprehend when to contribute and what are the focuses when they need to haul their cash out
from the market. The four phases of the monetary cycle are talked about underneath:
 Expansion- In the extension m the economy encounters quick development, creation
improves, paces of loan costs low.
 Peak- The peak hits when the development reach to the greatest rate . It acquires specific
awkwardness the economy which should be redressed.
 Contraction- This the time span where development dials back, work of the nation falls and
the costs of the wares deteriorate.
 Trough- This is supposed to be the absolute bottom where economy arrived at its absolute
bottom and after that the development starts and the things are recuperating 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.
Macroeconomic impacts emerge because of the macroeconomic variables which fundamentally is
the impact of financial, normal and international occasion that thely affects the territorial and public
economy. The new pandemic of Coronavirus lockdown has significantly impacted the economy
antagonistically of one country as well as the effect was worldwide(Liang and Yang, 2019). The
ascent in instances of Coronavirus that was found in December 2021 has driven the public authority
of UK to represent the limitations to restrict the transmissions. The economy of UK get contracted
at the quick speed inside a time of lockdown (Meadows, and et.al., 2022). Underneath referenced
are the major monetary impacts that were forced because of the pandemic-
 The decay was not so extreme during first lockdown.
 At the point when the persistent lockdown was forced, it decreased the yearly UK Gross
domestic product by further 1.9%. the effect on the economy was the force of strong
limitations which was more awful than the real lockdown strategies.
 The execution of social removing rules impacted the assistance area in a space where the
vicinity matters
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 The pandemic has accordingly impacted the independently employed people more than the
utilized and furthermore the private venture (Kılıç, 2022).
 The economy gets contracted due to the force of limitations
 The majority of individuals have become work less and claims were made five to multiple
times than the typical rate.
 The Gross domestic product report additionally exhibited that administrations tumble down
forcefully on account of the decay of 5.6% in the wellbeing spending. The action in setting
to test and follow fell practically 70% in April.
 The energy bills in April climbed by 54% and furthermore the finance charges went up
suddenly.
 The assembling business tumble somewhere around 1%, as the report recommend and
deficiencies in supply was likewise seen. The development tumbled somewhere around .4%
 The situation of pandemic additionally exhibited that the economy status was the migraine
for the bank of Britain and lead representative.
2. Explain how an economy can achieve sustainable economic growth and analyse the
different methods of measuring economic growth?
The term reasonable monetary development is the more extensive term that is characterized as pace
of development that is kept up with without making other significant financial issues for the number
of inhabitants in arising world. Additionally the financial development aims for supporting the
assets for people in the future (Hofmann, and zu Knyphausen‐Aufseß, 2022). The manageable
financial development additionally implies the rate at which the development shouldn't stress any
critical strain on the costs of labor and products and doesn't prompt the consumption of regular
assets. This incorporates the thought of a few perspectives-
 the climate gets hurt basically because of the extraction and consumption of HR
 A biological system is significant for individuals to live and whenever obliterated, it would
implies obliterating ourselves
In economy, assuming how much capital merchandise get expanded that far to create the financial
development are improvement in the innovation, development of the workforce and expansion in
the human resources (da Rocha, and et.al., 2022). There are different techniques to quantify the
financial development like-
1. Gross domestic product- it estimates the financial development in money related terms or
the consumptions. It has been seen that purpose for turning into the useful economy isn't the
development of dollars around it yet the use of the assets all the more productively. Closing
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this, a relationship is to be kept up with between asset information sources and all out
monetary results
2. Gross national product- surveying the complete pay of the resident of the country in a given
timeframe and its usage by the occupants of that specific country is utilized
Reference List (if Any)
da Rocha, and et.al., 2022. Business transformation through sustainability based on Industry
4.0. Heliyon, p.e10015.
Hofmann, F. and zu Knyphausen‐Aufseß, D., 2022. Circular business model experimentation
capabilities—A case study approach. Business Strategy and the Environment.
Kılıç, F., 2022. The Relationship Among Entrepreneurship Tendency, Income Level and Life
Satisfaction of Future Business People: Generation Z. International Business
Research, 15(3).
Meadows, M., and et.al., 2022. Tension in the data environment: How organisations can meet the
challenge. Technological Forecasting and Social Change, 175, p.121315.
Nayal, K., and et.al., 2022. Supply chain firm performance in circular economy and digital era to
achieve sustainable development goals. Business Strategy and the Environment, 31(3),
pp.1058-1073.
Ofori-Sasu, D., and et.al., 2022. Central Bank Policies and Market Power Over the Business Cycle
in Africa. Journal of Emerging Market Finance, p.09726527221086492.
Seclen-Luna, J.P. and Morales, R., 2022. The effects of innovation activities and size on
technological innovation in South American manufacturing firms. International Journal of
Business Environment, 13(1), pp.88-108.
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