Business Environment Exam (BMP4003): Macroeconomic Impacts and Growth

This assignment presents a comprehensive analysis of key macroeconomic concepts and their practical implications within the business environment. It begins by exploring the impact of monetary policy on inflation, examining how central banks utilize interest rates to manage economic cycles and control the money supply. The assignment then delves into government strategies for enhancing economic growth, detailing the roles of land, labor, capital, and entrepreneurship. It also discusses various types of unemployment and the methods used to analyze them. Furthermore, the assignment analyzes the UK economy's macroeconomic impacts resulting from the COVID-19 lockdown, including effects on GDP, employment, and various sectors. Finally, it addresses the concept of sustainable economic growth, emphasizing the importance of resource management and environmental considerations for long-term prosperity. The assignment provides detailed explanations and examples to illustrate these concepts, offering a thorough understanding of the business environment.

BSC (Hons) BUSINESS MANAGEMENT
SEMESTER 2, EXAMINATION 2021/22
BUSINESS ENVIRONMENT
MODULE NO: BMP4003
Exam Pasudiksha.bper 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) Discuss and explain the reasons how monetary policy has impact on the inflation
rate in the economy?
Monetary policy committee is accountable for framing the rules regarding to control
the money supply in the market. The central government has the power to make the
committee and it is direct by the supreme bank of every country. The members of the
committee has the authority to set the interest rate to cope up the situation of the
economic cycle (AlRawi, Mosteanu, and Alrawi, 2019). The committee increases the

repo rate to correct the consequences of the inflation. The problem of inflation or deflation
is not good in any country so company always try to get rid from the problem in quick
manner. The concentration of the monetary policy committee is to control that there is no
increment in the cost of the goods and services. The effect of the economic cycle has vast
on the business operations therefore it is the duty to manage and control the rates
effectively to rectify the rates of inflation. The generally role to frame the committee to take
the decisions regarding the repo rate or bank rate. The structure of the committee are
three deputy governors and the other senior staffs.
2) How can government enhance the economic growth? Give the examples to
elaborate the points.
The government utilize the several methods to promote the economic stability and of the
best way to enhance the growth by coordinating the balance between demand and the
supply of the products (Franco, and Haase, 2020). There are four elements like land,
workforce, capital and the entrepreneurship to boost the prosperity of the economy. It is
discussed below:
 Land: It is related to the natural resource that is measured in terms of the monetary
value as real property. Thus it furnishes two advantage first is it provides renewable
resources and second is the value of the real state property. The government
enforced the rules to prevent the forests.
 Labour: These are the workforce that is responsible to generate the value of the
products or services. These consist of the managers, staffs, sales people and the
engineering workers. These brings new innovation by employing the new talented
employees in the nation. Government launches the technology programme for
enhancing the skills of the people.
 Capital: It is the money needed by the every kind of business or company to
arrange the sufficient amount of capital and it helps to carry out the functions of
business and to earn the profit. Government helps to establish the plant and
machinery or purchase the equipment’s to create the capital.
 Entrepreneurship: It is the skill that changes the plan in to action. It is the element
that bring innovations in the overall production process. The owner consider several
factors and the concept related to the goods and the services. It is the inherent part
of the manufacturing process. Government assist the company idea of the new
owners to promote the innovative skills in the nation.
3) Ascertain and discuss the factors of reducing the interest rate in the
economy?
The lower rate of interest is make the fund the cheaper for taking the loan
procedure. It will encourage the customers to spend more and invest in the investment
or will raises the cost of the goods. It has positive or negative impact of the reducing
interest rate that is written below:
Positive affect: It forces the buyers to pay the interest less and renders them status to
spend more expenses and take out the impact of rising spending on the whole economy. It
also helps the company and the farmers to buy the machineries at the reduced cost
(Fauzi, and Sheng, 2020) .
Negative impact: It has the unfavourable effect on the foreign investor who invest in other
countries will get the less returns on the investment. The minimum returns will reduced the
demands of the national currency and downfall the exchange rates.
4) Explain the various types of unemployment and the several tools to analyse
them.
There are basically four types of the unemployment that is mentioned below:
 Frictional unemployment- It arises when workers shift from one place to another
on the temporary basis is called the frictional employment.
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 Structural unemployment- It refers to the unemployment that arises due to the
imbalance between the staff’s desires and the kind of tasks available in the
economy. In this the skills does not match with the jobs description.
 Cyclical unemployment: It occurs when there is low demand of the people in the
market. It provides less possibilities to provide employment.
 Seasonal unemployment: It is the seasonal requirement of the several industry or
the workers in multiple seasons.
The various methods which is employed to analyse the unemployment is the direct method
that comprises of the financial accounting and to measure the requirements of the
unemployed persons in the national country. The other tool is the indirect method that is
used to record the total of the unemployed workforce during the particular
time period (Ferrell, Hirt, and Ferrell, 2020).
5) Briefly explain the four stages of the economic cycle.
It is the process of the variations in the economy during the time period of the recession or
the inflation. This cycle helps the investors or the business to know that where company
need to invest or what are the areas they have to bring back the money out from the
economy. There are four stages in the economic cycle that is issued below:
 Expansion: It is the most flourishing stage in the market to expand the growth of
the business, increase the production and set the lower rate of interest rate.
 Peak: It is the position when the company growth attains at the maximum level. It
gives some mismatch in the market that needs to be corrected.
 Contraction- It is the time where there is slow down in the growth, and level of the
employment falls, and the cost of the commodity start to fall.
 Trough: It is the most challenging point of the economy where it is the drastic fall in
the market after the growth stage and the things start too recovered very soon.
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 macro economic impact on the ‘Coved – 19 lockdown’ in
the UK economy.
Macroeconomic factors due to the elements that is generally done to influence the
financial, normal and the geopolitical events which has the effect on the regional or the
nation economy. There is huge impact on the economy and its performance in the covid-
19 not only in the one nation but has the effect on the broad level. It had been observed in
the year
2021 December 2021 that rising of the case at the extreme point (Seclen, and Barrutia,
2018). The UK government has impose many guidelines or regulations to limit the
transactions. There is huge fall in rhea growth rate of the UK in the massive pandemic
period. The implications on the imposing restrictions on the pandemic-
 The GDP has reduced by 9.7% in the year of the 2020 it is the straight fall down in
the country that started in 1948.
 In the time of the initial lockdown GDP of the UK slow down by 25% in the month of
April 2020 and it is falling down continuously from the February.
 There are several sectors like hospital, education and the entertainment industry
has suffered from the pandemic.
 The reducing of growth rate is not critical in the first lockdown stage.
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 After that there are various times lockdown is enforced and it slow down the annual
GDP of the UK by the 1.9%. It is also becomes difficult for the people to manage
the basic necessities of the life.
 There is proper norms to follow the rules of the social distancing if someone break
the rules they they have to pay the severe penalty because it is essential to educate
them about the safety precautions.
 It has impact on the employment sector many people has lost their jobs such as the
small jobs people and the peddlers and the owner of the micro business because
they have to shut down the operations (Junior, Oliveira, and Yanaze, 2019).
 The economy has gone in to the stage of the contraction because of the many
rules.
 The GDP report denotes the down fall of the service sector by the 5.6% in the
overall sectors. The profits of the every business has reduced almost to 70% in the
April.
 The rates of the pay roll taxes and the energy bills has hiked with the percent of 54
unexpectedly.
 The production industry reduced by the 1% and the document gives suggestion and
there is the deficiency in the supply sector. The construction industry fall by the 11%.
 The observation of the pandemic shows that the status of the economy was the
problem for the England bank and its governor.
2) How economy can accomplish the sustainable growth of the economy and find
out the factors for analysing the economic growth?
The sustainable growth term is the broader term to maintain the continuous performance
of the economy in the current or the future years and the arising the various economic
complications of the public in the recent world. It consider the desires and the wants of the
people to attain the natural resources and the factors of the environment in the future
years. The prosperity of the economy consist of the manufacturing the product and the
services to satisfy the wants of the public. It is requisite to use the resources effectively to
prevent them for the future generations. The sustainable economic growth is related to not
increase the pressure for raising the cost of products and does not direct to the
exploitation of the natural resources. It includes the consider of various elements-
 The depletion and the extraction of the sources of human harmed the environment
in very serious way.
 The ecosystem is the important part of the public to live the life if it is finish that
means end the life of ourselves.
The prime purpose of the government is to increase the quantity of the capital goods to
create the business for the economic prosperity, to develop them, to bring new
technological innovations, to motivate the workforce and to expand the capital. There
are several methods to examine the growth of the economy-
1. Gross domestic product: It is the value derived from the production of goods and
services or it is measured in the monetary terms. Consider the example of the
cement industry and it shows the productivity of the output in the value of the dollar.
It show the contribution in the innovation or technology sector. It is the relationship
between the inputs materials and the sum of the total outputs, it is to change the
inputs in to outputs to create the value. (Charrón Vías, and Rivera-Cruz, 2020).
2. Gross national product: It is the total money earned by the citizens of the national
country with in a defined period of time. It excluded the income made by the citizens
of the national country who are not the residents of this nation. It helps to measure
the total income of the country from all the transactions between the exports and
the imports.
Reference List (if Any)
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AlRawi, H., Mosteanu, N.R. and Alrawi, I.H., 2019. Control Environment, Risk
Assessment and Monitoring in United Arab Emirates Businesses. In Creative
Business and Social Innovations for a Sustainable Future (pp. 55-65). Springer,
Cham.
Charrón Vías, M. and Rivera-Cruz, B., 2020. Fostering innovation and entrepreneurial
culture at the business school: A competency-based education
framework. Industry and Higher Education, 34(3. pp.160-176.
Fauzi, A.A. and Sheng, M.L., 2020. The digitalization of micro, small, and medium-sized
enterprises (MSMEs): An institutional theory perspective. Journal of Small
Business Management. Pp.1-26.
Ferrell, O.C., Hirt, G.A. and Ferrell, L., 2020. Business Foundations A Changing World.
McGraw-Hill Education.
Franco, M. and Haase, H., 2020. The role of reputation in the business cooperation
process: multiple case studies in small and medium-sized enterprises. Journal of
Strategy and Management.
Junior, C.H., Oliveira, T. and Yanaze, M., 2019. The adoption stages (Evaluation,
Adoption, and Routinisation) of ERP systems with business analytics functionality
in the context of farms. Computers and electronics in agriculture, 156. pp.334-
348.
Seclen, J.P. and Barrutia, J., 2018. KIBS and innovation in machine tool manufacturers.
Evidence from the Basque Country. International Journal of Business
Environment, 10(2). pp.112-131.
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