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• Assess The Impact Of Fiscal And Monetary Policy On Business Organisations And Their

2618 words - 11 pages

(2) In this next point I hope to determine in detail all the characteristics of the UK economy, government fiscal and monetary policies and how each one effects on the Tesco PLC organisation. I plan to give a clear and comprehensive look into each of the factors which build the UK economy and analyse and evaluate with strong evidence of application to theory throughout the report. The UK has a democratic, parliamentary system of governance known as the Westminster system. The structure of the administration ensures that there is an adequate separation of powers between the executive branch, led by the prime minister, the bicameral legislature and the judiciary, and that there is a system of ...view middle of the document...

Governments supply money in the form of grants, subsidies and tax breaks (paying less tax than you should) to encourage businesses in certain areas of the economy. A business that is starting out, or is going to provide employment in a depressed area may be able to benefit from such help i.e. Tesco. Tesco is currently the fourth largest retail company in the world (Global Powers of Retailing Report) and is UK’s leading food and grocery retailer. The company operates 4,811 stores in 14 countries worldwide. It operates in the UK, other European countries, the US and Asia. The UK, Tesco's largest geographical market, accounted for 67.6% of the total revenues in 2010. Revenues from the UK reached £42,254 million ($67,153 million) in 2010, an increase of 2.2% over 2009. (Data Monitor Statistics) This is a fascinating statistic, which proves why Tesco along many other companies suffered a hit due to the economic slowdown of 2009. The UK economy contracted 2.4% in the first quarter of 2009, a decline not exceeded in 51 years (Office of National Statistics). Gross Domestic Product (GDP) increased by 0.8 per cent in the third quarter of 2010, unrevised from the previous estimate. GDP in the third quarter of 2010 is now 2.8 per cent higher than the third quarter of 2009. (Statistics.gov) The definition of economic growth is an increase in Real GDP (gross domestic product), which is usually calculated annually. Therefore in order to calculate economic growth, GDP, which is the total value of production in an economy, needs to be calculated. There are three ways of doing this, the expenditure method, the income method and the output method. There are small discrepancies between the values of GDP using each method, and so in the UK the official measurement used by the government is an average of all three methods. The definition of economic growth is an increase in Real GDP (gross domestic product), which is usually calculated annually. Therefore in order to calculate economic growth, GDP, which is the total value of production in an economy, needs to be calculated. There are three ways of doing this, the expenditure method, the income method and the output method. There are small discrepancies between the values of GDP using each method, and so in the UK the official measurement used by the government is an average of all three methods. However the government can measure this differently via the GNP (Gross National Product). The GNP is calculated by the country's total economic activity, or the wealth of the country. GNP is usually assessed quarterly or yearly, and is defined as the total value of all goods and services produced by firms owned by the country concerned. It is measured as the GDP plus income earned by domestic residents from foreign investments, minus income earned during the same period by foreign investors in the country's domestic market. GNP does not allow for inflation or for the overall value of production. It is an important indicator...

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