Introduction to Business Environment

INTRODUCTION TO
BUSINESS
ENVIRONMENT

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Fiscal Policy.............................................................................................................................3
monetary policy.......................................................................................................................5
regional factor..........................................................................................................................9
Global factor...........................................................................................................................10
CONCLUSION.............................................................................................................................11
REFERENCES............................................................................................................................12

INTRODUCTION
Business environment can be defined as sum total of all that external and internal
factors that affect business. Macro and Micro both types of factors can impact running
of business. Micro factors that can affect business are suppliers, competitors,
employees and market intermediaries. Macro environmental factors which can affect
and influence business activities are social, economic, technological, environmental and
many more. These factors can lay positive as well as negative impact on working of
business. To adjust in business environment organization needs to follow a flexible
approach, so that it can help them in growing. Present report will lay emphasis on
impact of monetary and Fiscal policy on activities of United Kingdom business
organization. It will also analyze how the develop development in global and regional
aspects shape business activities. Report will also lay emphasis on global and regional
factors affecting the running of business in United Kingdom.
MAIN BODY
Fiscal Policy
A country’s economy can be defined as the huge combination of all tasks which
are being related to production and consumption of goods and services and also the
supply of money is being included in it. The economy is defined as a social domain that
emphasize the practices, discourses, and material expressions associated with the
production, use, and management of resources. Economic agents which perform all
economic activities consists of individual, business, organization or governments.
Economic transactions take place when the groups and parties come together and
agrees to dealing upon the cost of potential goods (Debortoli and Galí, 2017). An
economic condition of country defines about how developed it is. The economic
activities are linked to all task which related to production and consumption of goods. A
market based economy can be defined as that economy in which goods and services
are produced by analysing needs and demands of consumers.
It has been analysed that economy of United Kingdom is being considered as sixth
largest and measurement of this has been done by Gross domestic product. Also it has
been considered as ninth largest when measured by purchasing power and economy of
United Kingdom is taken as twenty second largest when measured in terms of Gross

domestic product per capita. Economy of United Kingdom is 3.3% of GDP of world.
Various changes have been taken place in structure which is economic of United
Kingdom. It has been analysed that changes were really necessary for development of
economy of country. Industrialization has been implemented in region during eighteenth
century which has supported country in growing. All these development has helped
country in becoming pre-dominated economy in Europe. These changes were analysed
during 19th century. Also industrialist has a huge contribution in developing economy in
United Kingdom like for example they brought out major innovations like steam engines,
textile equipment and tool making. Banks and financial institutions were also engaged in
supporting Small and medium sized organizations which supported country in
enhancing their economy. Also in 19the century it was analysed that country provide
assistance to free trade that has helped organization in United Kingdom in expanding
globally (Sims, 2016).
Fiscal Policy can be defined as that policy in which government is engaged in
adjusting levels of spending and tax rates so that they can monitor and lay impact on
influencing economy of nation. This policy is also known as sister strategy to monetary
policy, which is maintained by central bank and affect money supply of nation. This
policy can help country in achieving and reaching out their economic goals and
objectives. Economic phenomena can be controlled by government by making use of
Fiscal policy.
Briefly explain how this policy came out
Fiscal Policy is being given by a famous theorist and British economist who is
known as John Maynard Keynnes. This theory can also be known as Keynesian
economics. In this theory the economist has explained that macroeconomic productivity
level can be influenced by increasing or decreasing levels of tax and spending’s of
public. This impacts in lowering down the rate of inflation. Fiscal policy helps in
increasing rate of employment and maintain a healthy money value. This policy has
most important role in managing economy of country. Fiscal policy can be used by
government in a situation where the rate of inflation is too high and economy needs to
be slowed down. So this the appropriate time to make use of this policy.
Does this policy exist within United Kingdom?