Analysis of Global Business Environment and Economic Policies Report

This report provides an analysis of the global business environment, with a specific focus on the impact of fiscal and monetary policies. It begins with an introduction that highlights the influence of various factors, such as technology, government regulations, and economic conditions, on business decisions. The main body delves into the trickle-down theory, explaining how government policies aimed at supporting top-level entities can eventually benefit the broader economy. The report uses the UK as a case study, examining the Bank of England's monetary policies and the government's fiscal strategies, including changes in tax rates, to manage inflation and stimulate economic growth. The analysis includes the impact of these policies on employment and the overall standard of living. The conclusion emphasizes the importance of effective fiscal and monetary measures, such as managing tax and interest rates, to ensure the smooth performance of the economy and promote business growth. The report references several academic sources to support its findings.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...................................................................................................................................................3
MAIN BODY..........................................................................................................................................................3
CONCLUSION.......................................................................................................................................................4
REFRENCES..........................................................................................................................................................5

INTRODUCTION
Global business environment emphasize on the use of resources, skill and capabilities that helps to take
significant decision. Business gets influence due to various factors such as innovation in technology,
government rules, political instability, economic status of country and so on (Haughton, 2013). Fiscal and
monetary policy are used to stimulate or influence the overall economic activity as it helps to generate the
aggregated demand of economy. It helps to calculate various factors such as inflation rate, investment done by
company, spending done by customers and expenditure of government on infrastructure and welfare of society
(Popescu, 2013).
MAIN BODY
Trickle down theory: This theory emphasize on creating the ecosystem in which government will take
care of the needs of top level that include MNC's and investors which further take care of needs as well as
requirement of bottom level (Tcherneva, 2014). For instance, if the government cut down the tax rate then the
funds can be utilised to expand the business operation which increases the employment rate and per capita
income of overall economy. Moreover, fiscal policy are associated with making programme related to taxation
and spending that directly impact the operations of business. Whereas, monetary policy are classified under two
parts that is expansionary as well as contractionary. Within expansionary RBI increase the supply of money in
order to eradicate unemployment rate whereas contractionary slower down the money supply in order to
restrain inflation rate.
Fiscal and monetary policies of UK by using Trickle Down Theory
 Bank of England manages the monetary policy of UK with the aim to control the inflation rate of
country. Further, if the country maintains inflation rate then it will lead to increase in supply which act
as an opportunity for both large and small business to fulfil emerging demand (Monetary and Fiscal
policy of UK., 2018). Therefore, implication of such monetary policy helps the firm to manage the
interest of overall economy by maintaining the balance between savings and investment that further
helps in maintaining the circulation of overall fund within an economy.

From the above diagram it has been interpreted that the inflation as well as interest rate of UK is in
control like inflation rate is approximately 2% in comparison to previous years (Salvatore, 2015). Along with
that the interest rate of the economy is low as well as stagnant that boost the growth in UK economy.
 Based on the concept of tickle down theory, the government of UK brings changes in tax rate to
minimise the impact of change in economy cycle. For example, during the time of recession the
government gets low revenue from tax rate which is further used to decrease unemployment rate like, in
2010 when UK experienced recession government cut down indirect taxes such as VAT. This led to the
rise of GDP of country. Hence, increase in employment enhance the lifestyle of local resident that
stimulate the growth of overall economy.
CONCLUSION
From the above report it has been concluded that fiscal and monetary policy plays valuable role to
maintain the smooth performance of overall economy. Thus, government must adopt effective measures related
to tax rate, interest rate, cost of mortgagee, expenditure made by government and so on based on different
economic cycle. Moreover, trickle down theory help to promote the growth and development of overall
economy. Thus, it helps top as well as small business investor as well as owner to earn preferable profit to
attain their goals successfully.

REFRENCES
Books and Journal
Popescu, G. H., 2013. Macroeconomics, effective leadership, and the global business environment.
Contemporary Readings in Law and Social Justice. (2). pp.170-176.
Salvatore, D., 2015. Managerial economics in a global economy. OUP Catalogue.
Tcherneva, P. R., 2014. Reorienting fiscal policy: A bottom-up approach. Journal of Post Keynesian
Economics. 37(1). pp.43-66.
Haughton, G., 2013. Community economic development: challenges of theory, method and practice. In
Community Economic Development (pp. 17-36). Routledge.
Online source
Monetary and Fiscal policy of UK. 2018. [Online]. Available through:
<https://www.economicshelp.org/blog/113/uk-economy/monetary-and-fiscal-policy-in-the-uk/>.