The functional areas that would be affected are the production department and the financial department. The production department would be affected because the amount of Ribena they have to make would have would decrease. It would affect the financial department because if less people are buying then less money will be coming into the business. This may affect the RSPCA because more people will be donating to them. More people will donate because if you live alone you will have more money and time to donate and/or volunteer.
In relation to HSBC, the government operates with the Bank of England to control inflation, interest rates, exchange rates, corporate tax and VAT. In addition to these five factors, the government also limits market share and adopts new schemes/policies (such as the help-to-buy scheme for first- time buyers). These factors have a significant influence on HSBC as they directly and indirectly impact potential sales, costs and international trade. Therefore, the government has an extremely large extent of influence. The government is significantly influential because if interest rates, VAT and inflation rates were to increase it will mean the consumers disposable income in the UK decreases.
How about making great increases on taxes for the rich? Wouldn’t that reduce the income from their industries and businesses as well as making it hard for them to maintain all their employees? It’s interesting how the big earners are portrayed as being extravagant, spending on luxurious goods while the middle class who have foreclosures and bankruptcy are only portrayed as caring about their children to go to good schools. Oh! How
olEvaluate the case for cutting public expenditure rather than raising taxes as a means of reducing fiscal deficits. (30) A fiscal deficit is when the government spends more than it receives in tax revenue. There are many benefits of cutting expenditure rather than increasing taxes. Firstly this will avoid any tax evasion and avoidance. This is because when taxes are increased a smaller amount of income is retained giving people the incentive to declare lower incomes to the HMRC so that they fall into a lower tax bracket.
Firstly, if consumption falls for foreign goods then this will better the current account deficit or improve the surplus. This is because consumption falling for foreign goods means that less must be imported to the UK which is sending money abroad. Therefore, if the fall in consumption is in just foreign goods and domestic goods remains the same, then imports will reduce and exports will remain the same. As the current account is calculated using the equation ‘exports - imports’ then smaller imports will mean this equals a higher value resulting in a surplus or a reduced current account deficit. On the other hand, the fall in consumption does heavily depend on where the fall is.
A business is then formed from these people, and they become business people. Business people use their services to produce whatever a consumers demands, when these demands are fulfilled, the consumer pays and then the business gains money. If businesses want to gain more money, the business must spend more money, more money spent means more money flowing through the economy. A strong economy makes a strong government, and a strong government makes strong people to support the government. Although the business cycle is not as simple as I stated, fundamentally that is how it works, by using their greed business people end up helping everyone instead of hurting, and thus business people are captains of industry.
For example the NHS, there would be more private firms ready to invest. However the down fall to this would be that those who are unable to afford this service would not receive the benefits and therefore the UK health welfare would decrease dramatically. On the other hand another advantage to these cuts would be the possibility of a decrease in income tax. The reason for this is due to the fact that the government has no other fair reason to take a high percentage of income tax because they are cutting on spending, the ration of private firms operating in the UK economy will be boosted and there will be more profit to be made. This would naturally also lead to a rise in jobs available, leading to an overall rise in general household income and GDP.
The federal government attempted to fix the economic problems through costly economic stimulus packages, which only resulted in further national debt. So one would have to ask if the fiscal policy the government is currently using is working. Many economist say America is suffering from debt deflation. Americans are trying to pay down debt by spending less, but this is causing their debt problems to worsen. Economists believe that government spending should rise temporarily so the drop in private spending can repair itself.
“Paychecks for government workers, vendors and state and local governments would likely be withheld or not paid in their normal timely manner,” says Vincent Reinhart of the American Enterprise Institute. The Treasury might also decide to prioritize payments. Social Security recipients, who often rely on their check for daily living expenses, would probably be among the first in line. But so would bond holders: The government would likely do everything it could to protect its credit rating”. So by raising the dept ceiling the government would be able to avoid a shutdown that would greatly impact Americans.
These methods are usually applied through the central bank in the UK The monetary policy contains buying and selling of national debt, changing the credit restrictions in the county and changing the interest rates this is done by changing backup requirements. I am now going to talk about how monetary policies affect aldi. Over the years since the country has been through some difficult financial times the interest rates have risen and this has affected aldi. This is because there is less disposable income for consumers to spend which results in the buying only the essentials which they need to go throughout the week. On the other hand this has benefited aldi because more consumers would rather go to aldi than Tesco or Morrison’s because they are cheaper and they have good quality on the goods and