Economic System In Sri Lanka

Published Date: 02 Nov 2017

An organization is a social group which distributes tasks for a common goal. An organization comes into existence when there are a number of persons getting together and understanding each other by building a relationship among them to achieve a common goal.

Categories of organization

Legal form

Size form

Economics activities

Level of activities

sole trader

small scale

primary sector

Agriculture

Partnership

Business

secondary sector

Fishing

Organization

medium scale business

tertiary sector

Mining

Private and public organization

large scale business

Manufacturing and elicits and gas

Table - 1

Profit and nonprofit oriented business (charitable organizations, trade unions, trade associations and public arts organizations)

Type of organization which this new business fall into

The new business you're accepted to personal is a single owner/ sole trader business. It materials apparel as the produce. In the present market there are many large-scale cloth manufacturing firms. Compete with those going to be a challenge finally. Those firms system mechanism to improve their efficiency. But in your company you're going to produce unique handmade clothing. As a sole trader you're going to own a small business with few employees. So the value of product should be up to its normal. Because you're bound for have wide-ranging problem as a sole trader. And also you're going to take both return and loss.

1.2

Objectives of different stakeholders

Different stakeholders have different objectives, some stakeholders objectives can be depending on how the product is developed and marketed. As there are a lot of stakeholder objectives, here below are some of the major stakeholder’s objectives.

The government

The government tries to implement the laws and regulations over an organization because in a country the government is the only body which can interfere with the law. The governments expect paying tax on time and contribution toward the economic development and providing job opportunities to solve the unemployment problem.

Suppliers

This type of stakeholders they don’t eagerly seek into a extra profit but these type of stakeholders need profit to survive in the market but also not to have a high competition among its competitors. The only objective of the supplier stakeholder is to cover up the demand of the organization because an organization which has the regularity of getting outside resources, they depend highly on the suppliers. So the supplier stakeholder’s major objective is to cover the demand of the organization for goods or whatever it is, their payment on time.

Community

The community as the stakeholder expect continues supply of goods and services to fulfill their needs and wants with the high quality. they also expect the protection of cultural and social ethics.

Board of directors

Boards of directors are commonly identified among private organizations and they can be partners or even owners of the organizations. They have a huge responsibility and interest over the organization. Mainly the board of directors has their plans and objectives well pre-planned because they have a huge responsibility over the organization and they are the people who can make decisions easier than the other stakeholders.

Customers

The customers, they are the stakeholders who decide the products quality, the amount of sale, the price and etc. because customer stakeholders are the stakeholders are the people who demand for the goods and these stakeholders have an infinity of needs.

Shareholders

Shareholders are also another major type of stakeholder who contributes a lot to the organization. These stakeholders are the owners the organization and invest their capital and they are the investing magnets of an organization. Shareholder stakeholders have objectives in getting high return annually

Deciding what type of authority system to create within the organization

Direct employees toward objective

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Figure – 2

1.3

Organizational responsibilities

Organizational Responsibility is the liability of organization to be called to account the way organization has exercised the authority given to it, it is obligation to do something.

Social responsibility

Social responsibility can be defined as the obligation that organization has towards the people and environment in which company operate.

Environmental responsibilities

There are many major laws related to environmental responsibilities, Always company should concern about environmental issues related with business.

Ethical responsibilities

Every businessman should follow some ethical concerns in handling the business such as obey law, be fair and avoid harming others.

Management responsibilities

Management responsibilities of the organization has a responsibility towards following groups

Employees

Customer

Suppliers

Competitor

Government

1.4

Economic system in Sri Lanka

An organized way in which a state or nation allocates its resources and apportions goods and services in the national community Is an Economic system.

The main types of economic systems include:

Market economy : Where decisions about resources, products/services and requirements are made by private organizations

Planned/Command economy : Where all economic decisions are made by the government

Mixed economy :This type of system consists features from both mixed and Planned/command economies

Market economy

A market economy is where monetary results are made by the free marketplace. That means manufacture of properties and services are controlled by the rules of supply and demand. Creators sell their goods and services at the maximum possible price that customers are willing and intelligent to pay. Employees also bid their amenities at the highest conceivable wages that their services allow.

Command economy

A command economy is where financial decisions are calculated out in detail by a dominant government authority. The plan is applied done laws, regulations and commands. Businesses follow manufacture and hiring boards instead of separately and freely replying to the laws of supply and demand. Dominant planners seek to substitute the forces that function in a free marketplace economy, and the payments that guide a outdated economy, to attain precise societal

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Figure - 3

Mixed economy

A mixed economy has many of the physiognomies of market, command and outdated economies. The United States is a mixed economy because it is Structure protects many of the features of a market economy, with ownership of private stuff, confines on government interference, and endorsing innovation. However, the Composition also inspires the government to indorse the general prosperity. This allows many features of a command economy, where needed. In totaling, many American societies still guide economic policy.

Analysis of economy in Sri Lanka

The economic system that exists in Sri Lanka is a Mixed economic system. We can see the following features in the current economic environment:

Profit-making organizations and the increase of capital would remain the central driving force behind economic activity.

The government would have considerable influence over the economy through fiscal and monetary policies designed to counter economic downturns and capitalism's tendency toward financial crises and unemployment, along with playing a role in social welfare interventions

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Figure - 4

1.5

fiscal and monetary policy on business organization and their activities

Monetary Policy

Monetary policy involves influencing the supply and demand for money through interest rates and other monetary tools.

Monetary policy is usually conducted by the Central Bank, e.g. UK – Bank of England, US – Federal Reserve.

The target of monetary policy is to achieve low inflation (and usually promote economic growth)

The main tool of monetary policy is changing interest rates. For example, if the Central Bank feel the economy is growing too quickly and inflation is increasing, then they will increase interest rates to reduce demand in the economy.

In some circumstances, Central Banks may use other tools than just interest rates. For example, in the great recession 2008-12, Central Banks in UK and US pursued quantitative easing. This involved increasing the money supply to increase demand.

Influence the economy through

Interest rate

Exchange rates

Control the money supply

Control over bank lending and credits

Fiscal Policy

Fiscal policy relates to the impact of government spending and tax on aggregate demand and the economy.

Expansionary fiscal policy is an attempt to increase aggregate demand and will involve higher government spending and lower taxes. This expansionary fiscal policy will lead to a larger budget deficit.

Deflationary fiscal policy is an attempt to reduce aggregate demand and will involve lower spending and higher taxes. This deflationary fiscal policy will help reduce a budget deficit.

fiscal policy includes followings

Taxation and income

Government spending

Borrowings

Repaying debts

Taxation and income

A tax that managements impose on monetary income produced by all objects within their authority. By law, businesses and persons must file an revenue tax return every year to control whether they owe any taxes or are qualified for a tax repayment. Income tax is a key basis of funds that the management uses to fund its events and serve the public.

Government spending

• To resource goods and services that the private sector would fail to do

• To achieve supply side improvements in the economy

• To reduce the negative effects in the economy

• To achieve equity in the economy

Expenditure

The main areas of UK government spending

Taxation

Direct taxes, such as income tax and business tax, and indirect taxes such as Value Additional Tax (VAT), are the main bases of revenue

National insurance

Domestic assurance is a compulsory contribution from both company and employee to provide employees with a minimum welfare expense during ages of unemployment.

Charges

Management can charge for using incomes under their regulator.

Privatization

By selling community sector businesses or renting for long term, direction can earn.

Borrowing

If a management does not have sufficient money to do their expenditure, they borrow from commercial banks.

Figure - 5

Impact of fiscal and monetary policy

Totally approachable of the current world head and the downturn historical in which United Kingdom is following. Any single may be intrusive about what the government of UK is doing in this situation and how the control is attacking this production. This report provisions in accepting the UK Government’s resolve of the expenditure the Fiscal and Monetary policies, in addition to reviewing and discussing the motive for the government consuming these rules. Recognizes the macro-economic in the wide-ranging situation and shots to categorize the government’s character in the economic and the strategies government uses to prosper the economy. The interpretation makes a go in making request of the current world disaster and sure places where the fiscal and monetary rules have come into picture. An exertion is made to learning and discoursing the government movements in variation to these policies. To end of the study, optimistic references are made in request to works and resolved with opinion.

1.6

Competition policies and regulatory mechanisms

The societies in European countries are becoming increasingly complex as they contain a rage of traditions and values. Living standards of have risen steadily since the introduction of the EU. While its goals are to "uphold the values that Europeans share, such as sustainable development and, respect for human rights and the social market economy" the EU helps to create unity in a world of diversity.

Even in the 21st century Europe still faces safety and security issues. The EU has to take multiple actions to ensure the safety and security of its members. For example the fight against terrorism and organized crime requires the EU forces of all countries to work together closely sometimes even beyond their borders.

No individual EU country is strong enough to go it alone in world trade. The EU works together with all countries to ensure economic growth and be able to compete in the world economy with other major economies. The EU provides companies with a vital platform for competing effectively on world markets.

An Internal market

The EU has established a single market across the territory of all its members. This market involves the free circulation of goods, capital, people and services within the EU.

This Internal Market is intended to:

Increase competition

Increase specialization

Support larger economies of scale,

Allows goods and factors of manufacture to move to the extent where they are most valued, thus refining the competence of the allocation of resources.

Impact of these policies on business organization

The coolest way for a company to improvement a high commercial is to proposal a better cost. In an aggressive manufacturing, prices are pushed down. Not only is this good for clienteles, when more people can achieve to buy substances, it stimulates businesses to generate and upsurges the economic system in common. Opposition also motivates businesses to improve the outstanding of products or answers they sell, to entice more clienteles and increase business. Excellence can mean numerous things. Items that last lengthier or work better, better after-sales or tech provision team or user welcoming and better facility. In a violent manufacturing, businesses will try to make their items dissimilar from the break. These consequences are better option. So customs can select the item that suggestions the right balance among exceptional and cost. To deliver this selection, and produce better items, businesses need to be imposing. In their item thoughts, design, expansion techniques, answers etc. Competition within the EU would generate Western businesses more influential outside the EU too, and able to grasp their own against global opponents

Regulatory structure in the UK

Competition commission of UK

The Competition Commission is a competition regulator under the Department for Business which conducts in-depth inquiries into mergers, markets and the regulation of the major regulated industries, ensuring healthy competition between companies in the UK for the benefit of companies, customers and the economy.

The Competition Commission’s inquiries are commenced following a reference made by another authority (the Office of Fair Trading), or one of the sector regulators which refers merger and market inquiries.

They enable the Office of fair trading to analyze markets and to check whether they are experiencing any anti-competitive behaviors. While conducting this analysis it may have to check what factors in a market contribute to anti-competitive behaviors thereby preventing competition within that market.

Office of Fair Trading

The Workplace of Fair Trading (OFT) is the UK's customer and struggle specialist, which gears both consumer protection and opposition laws. Its goal is to "make markets work well for patrons", by indorsing more active fight between businesses and barring unfair achieves (I.e. as rogue trading, scams).

There actions include:

Hopeful businesses to fulfill with rivalry and customer law and to advance their trading achieves finished self-regulation

Examining markets and sanctioning action where obligatory

Authorizing consumers with the information and skills to make conversant assortments and grow the best worth from marketplaces.

1.7

The market structures

The four main market structures are:

Monopoly market: Single firm, no close substitutes, barriers to entry, full and symmetric information

Oligopoly: Several firms, similar products, degree of product differentiation varies depending upon the market, might be barriers, full and symmetric information.

Monopolistic: many firms, similar products, slightly differentiated products, free entry and exit, full and symmetric information.

Perfect competition: Many firms, identical products, free entry and exit, full and symmetric information.

Monopoly market

A condition where only "one" business offers its harvests or facilities to the public, thereby generating a monopoly, a sole providing firm where the customer has no selection or excellent but to buy their facilities or harvests. When this happens, and there is no rivalry, prices will go up to the disadvantage of the public. Numerous government activities keep the creation of controls under control, particularly in marketplaces like communications, media, and utilities, among others.

Vendor has full control over the marketplace price.

There is an only a single product without close alternates.

There is no essential to promote for his properties.

In monopoly market, the request curve for a firm's creation grades downwards.

Oligopoly

A market conquered by a small number of members who are able to together exert control over source and marketplace prices.

• Only few contestants in the market

• Firms act as independents

• Barriers to entry

• Use rapacious pricing methods

• Capacity to set price

• Product variation

• Faultless knowledge

• Long run profits

Monopolistic

A market construction in which numerous or many vendors each harvest similar, but slightly discriminated products. Each manufacturer can set its price and amount without affecting the market as a whole.

Lots of purchasers and sellers

Perfect material- buyers and vendors are able to see prices at which others are buying/selling

No important barriers to exit or entry- anybody can join or exit

Discerned products- if you can distinguish your produce, your market power increases

Perfect competition

Marketplace in which no member can stimulus prices. Careful by a free flow of substantial, no blockades to entry, and a great number of purchasers and sellers.

There is perfect knowledge, with no substantial failure or time lags. Information is easily available to all funders, which profits that risk-taking is insignificant and the role of the manager is limited.

There are no blockades to entry into or departure out of the market.

Firms harvest same, indistinguishable, units of output that are not branded.

Each component of input, such as components of labor, is also regular.

Table - 2

Figure - 6

How market structures determine the pricing and output

Which market structure is the most desirable model for opposition, and why? As noted exceeding, the market structure theory regards competition with a "what you see is what you get" approach: different market structures presumably yield different kinds of competition. Of the four market structures described above, it is perfect competition (PC) that is regarded by virtually all standard texts as the "optimal," most desirable form of competition.

The other three structures suffer by comparison with the PC ideal, and, hence, are lumped together under the classification of imperfect competition. And the reason given is very simple: under PC the firm is presumed to produce more quantity and sell at a lower price than any firm under imperfect competition (hereafter referred to as IC). Conversely, each firm under IC is presumed to produce less and sell at a higher price than any firm under PC.

Clearly, the basic criteria for preferring PC over IC are selling price and quantity produced. In themselves, these are eminently reasonable criteria. Other things being equal, consumers would surely prefer to buy at a lower price than at a higher price, and to get a larger quantity for their dollar than a smaller quantity. Since the PC firm, compared with IC firms, is purported to produce more at a lower price per unit, it wins the contest hands down. Compared with the standout performance of PC, the IC structures of monopoly, oligopoly, and monopolistic competition all yield "impure," inferior results

1.8

How market forces shape organizational response

Demand

The amount of a particular cost-effective good or service that a customer or group of consumers will want to purchase at a given price. The demand curve is ordinarily downward sloping, since customers will want to buy more as price reductions. Demand for a good or facility is resolute by many different reasons other than price, such as the price of auxiliary goods and balancing goods. In extreme cases, demand may be totally unrelated to price, or nearly immeasurable at a specified price. Along with supply, request is one of the two key factors of the market price.

Figure - 7

Excess demand

Exce1ss demand foundations price and quantity of supply rise. Excess demand is fashioned when price is set under the stability price. Because the value is so low, too many buyers want the respectable while constructors are not production suitable of it.

Figure - 8

Supply

An important economic impression that defines the total amount of a exact good or service that is accessible to consumers. Supply can recount to the amount accessible at a specific price or the quantity available crossways a range of prices if exhibited on a diagram. This recounts faithfully to the demand for a good or service at a precise price; all else being different, the supply delivered by producers will rise if the value rises because all firms expression to exploit profits.

Figure - 9

Excess Supply

The result of this additional supply is a reduction in the advertise price. Because suppliers are unable to wholesale as much of the decent as they want, they are tending to bid depressed the price. Of course, as the price falls, the amount demanded surges and the quantity supplied reductions, both acting to decrease the amount of the excess supply. Eventually the complete excess supply is eradicated and balance is restored.

Figure – 10

Shifts and movements in demand

A transferal in demand curve results from variations in all other influences that were held relentless in structure the demand curve. Such other influences comprise the change in price of other supplies, change in supply of the product in question, change in tastes and favorites of customers, change in income of customers etc. For occurrence, given The price of the product in question say bid pen, an growth in the price of Reynolds pen will bring about an growth in demand for bib pen, representative the increase in demand of Bib pen due to the growth in price of the Reynolds pen on a demand curvature without a price change in bid pen, the demand curvature shifts centrifugally at the same price level.

Figure – 11

Shifts and movements in supply

A movement along the supply curve is produced by a change in price of the good or service. For example, an increase in the price of the good outcomes in an extenion of supply (quantity supplied will upsurge), whilst a reduction in price causes a contrction of supply (quantity supplied will reduction). Therefore, an motion along the supply curve will transpire when the cost of the good fluctuations and the amount supplied vagaries in compliance to the unique supply assembly.

Figure – 12

Elasticity

Elasticity is recycled to assess the difference in customer demand as a result of a variation in the good's price. When the price is better than 1, this advises that the demand for the good/service is artificial by the price, whereas a taxation that is less than 1 suggest that the demand is apathetic to price.

Productions often try to sell/market harvests or services that are or seem inflexible in demand because doing so can nasty that few clienteles will be lost as a result of price increas

Figure – 13

Perfectly inelastic demand

Figure - 14

Perfectly elastic supply, inelastic supply

figure - 15

1.9

How the environments would influence the behavior of the proposed business

Commercial buyers are predisposed heavily by issues in the present and probable economic environment, such as the equal of primary demand, the economic viewpoint, and the cost of money. As economic anxiety rises, corporate buyers cut back on new funds and attempt to decrease their inventories. An regularly important environmental factor is deficiencies in key supplies. Many businesses now are more ready to buy and hold larger accounts of scarce materials to ensure satisfactory supply. Business consumers also are pretentious by technological, political, and modest developments in the environment. Philosophy and customs can strongly inspiration business buyer responses to the marketer's performance and strategies, specifically in the worldwide marketing situation. The business marketer must watch these factors, regulator how they will disturb the buyer, and try to turn these contests into occasions.

Part 2

2.1

Significance of international trade to uk business organisations

UK is a mechanical country.The inside market is small.UK can development its economy only through common it market ,complete international trade.The successful economy of UK throughout regal rule was due to its great market,UK procured fresh things at cheap rates from groups and sold complete goods in collections.Now the share of UK in global trade is at mainstay bottom.It has lost its arcades.Once popular products like Phillips,BSA etc are not required in market and they have been changed by inexpensive goods fromChina, japan etc.UK has no upcoming unless it restore its brands,evoke its markets complete international trade.

The buying and selling of goods and services crossways general borders is branded as worldwide trade. Global trade is the funding of our modern, commercial world, as inventors in numerouscountries try to revenue from an lingering market, rather than be controlled to selling within their own confines. There are many reasons that trade across national limits ensues, with lower manufacture costs in one segment versus another, specific businesses, lack or spare of natural goods and customer tastes.

One of the most upsetting gears of international employment today is the lesser manufacture costs of "developing" countries. There is presently a countless deal of fear over occupations being unavailable away from the United States, member countries of the European Union and other "developed" nations as countries such as China, Korea, India, Indonesia and others harvest properties and services at much lesser budgets. Both the United States and the European Union have compulsory severe borders on imports from Asian nations to try to stalk this tide. Clearly, a business that can wage its workers the different of dollars a day, as related to dollars an hour, has a separate selling benefit. Nevertheless, American and European consumers are only too happy to poorer their costs of existing by taking gain of inexpensive, imported properties.

Specialization and comparative advantage

 A comparative advantage in creating or selling a good is influenced by an individual or country if they knowledge the lowest occasion cost in manufacturing the good. Comparative benefits obtained complete service. A advantage that a nation benefits over its adversaries through the invention or growth of new or different items ,through generating greater and more cost-effective manufacture methods. Trade inspires a nation to attention on producing only those items or facilities which it can harvest more effectively and successfully, and at the smallest prospect price.

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soybeans

avocados

Mexico

15

60

USA

30

90

Table - 3

Improving international trade

International employment can be a much more current way to reduce lack than outright aid because trade can help a country become self-sufficient, instead of trusting on foreign aid. There are, however, many disparities within the present international trade organization that work against poor countries. Inexpensive value chain approaches for refining food security in immature countries are oriented toward manufacture and cost efficiency. Modest value-adding transfer policies from underdeveloped countries offer difference advantages for high-income collections and regions, which may gain higher proceeds than are available through internal trade. Improving food security from global trade may rely upon a larger governance of a range of policies counting: fisheries organization to secure sustainable gathering, economic policy to protected distribution of the financial gain from trade and a source policy to secure harvests and marketing amenities favored by the consumers.

Advantages and disadvantages of trade

Advantages

Disadvantages

Outcomes in an increase in international connections.

Mass manufacture leads to mass effluence

Results in proficiency among nations, and therefore improve performance in expansion which in turn is the mother of the requisite for technological advance advancement.

Leads to a potential economical expansionism.

Increase customary of living between trading nations

Lack in Stability of Expense results in universal debt.

A country may introduction things which it cannot produce

Introduction of damaging goods

Maximum operation of resources

It may consume resources

Decreases trade variations

Over Concentration

Nurtures International trade

One republic may gain at the luxurious of Another

Table - 4

2.2

Impact of global factors on UK business organization

Figure - 16

Technological

These issues greatly effect business plans as they provide chances for businesses to adopt new novelties, and inventions. This benefits the business to reduce prices and develop new crops. With the arrival of modern statement technologies, technological issues have gained great motivation in the business stadium. . Huge volumes of material can be securely shared by incomes of databases thereby allowing vast cost reductions, and developments in service. Organisations necessity to consider the modern relevant technological progressions for their corporate and to stay competitive. Technology supports business to gain modest advantage, and is a main driver of globalization. While scheming the business strategies companies must reflect if use of technology will allow the secure to manufacture crops and services at a inferior cost. Businesses can select new methods of distributions with the support of technology. It has become calmer for companies to connect with their client in any part of the world.

Social factor

These issues are related to deviations in social structures. These factors deliver insights into behaviour, tastes, and existences patterns of a population. Buying designs are greatly subjective by the changes in the assembly of the population, and in customer lifestyles. Age, gender, etc all control the buying designs and understanding of such vicissitudes is critical for emerging strategies which are in line with the marketplace situations. In a worldwide environment it is significant that business strategies are calculated keeping in attention the social and nationalvariances that vary from country to country. Consumer religion, language, lifestyle decorations are all important material for successful business management.

Economic factors

These issues involve changes in the worldwide economy. A rise in living values would ultimately imply an upsurge in demand for products thereby, providing better opportunities for businesses to make incomes. An economy observers fluctuations in economic actions. This would suggest that in situation of a rise in economic action the demand of the produce will increase and hereafter the price will surge. In case of discount in demand the values will go down. Corporate strategies should be developed protection in mind these variations. Other economic variations that affect corporate include changes in the attention rate, wage rates, and the rate of increase. Incase of low attention rates and increase in demand Companies will be encouraged to increase and take risks. Therefore, business plans should have room for such variations.

Political factors

This refers to the vicissitudes in government and government rules. Political factors greatly influence the process of business. This has gained important importance off late. For example: companies working in the European Union have to adopt commands and regulations bent by the EU. The political arena has a huge effect upon the regulation of businesses, and the expenditure power of consumers and other companies. Business must reflect the stability of the political situation, government’s rule on the economy etc

2.3

Impact of policies of the European Union on UK business organization

The EU command has recently specified its desire to levy shortest taxes, which would break absent from the practise of departure national governments to increase the appropriate coffers; this in attempt is going to have a massive effect on the cash current of small business.

It appears clear that countries that move to a more industrial economy based on low duties and deregulation flourish and grow. The EU has hurt from a deep downturn, and as it gradually begins its retrieval it has never been more significant to inspire the private sector to principal us back into wealth. However we can't become reallymodest again unless we extract from the EU, because of the many guidelines that they execute on our business welfares

Herman Vanguard Rompuy is the infamous leader of the European Council, a post created by the Lisbon Agreement. "In 2010, the cost of the workplace of the President of the European Board (including staff, travel expenditures and salary) is 6 million euros (£4.98 million). The rate is being met this year from within the EU's yearly budget, using coffers which had been before allocated to other Assembly projects. The budget for the workplace of the President of the European Board in 2011, like all other EU institutions, is currently being decided as part of ongoing discussions on the EU's budget for afterward year

President van Rompuy is a very luxuriousaffront to the taxpayers of Europe. He is unelected, consuming been chosen during a dinner. His annual salary of £273,814 is greater than that of President Obama and, though funded by the taxpayer, he cannot be chosen out of office. However, this is a droplet in the ocean associated to the £252 million being consumed on the formation of a palace for him to effort in. President van Rompuy is share of the novel overpaid and unelected radical elite which is now the actual Government of Britain and all the other associate states.There are many instances where the European Command has functioned to eliminate anti-competitive performs, an area where the UK on its personal would not have been able to brand the same impact. One such taster was when in February 2008 the European Commission penalized Microsoft €899 million for failing to conform with sanctions compulsory on it aimed at anti-competitive behaviour.

Employment policy

Governments production a major part in annoying to stimulate occupation. For example, the present government is intense to encourage trade efficiency so that UK businesses are competitive in global markets and therefore make jobs.

Regional policy

At European Union equal, funds are made obtainable to support regions of high unemployment and communal deprivation such as large parts of Southern Italy and country France, as well as the Highlands and Landmasses of Scotland.

Inflation policy

The government seeks to make unquestionable that there are no rapid general rises in prices. They do this finished the Monetary Policy Commission (MPC) of the Bank of England which sets attention rates. Interest charges are put up if there is a risk of people copying and expenditure too much, thus assertive prices up

Education and training policy

Education and training is seen in the UK as having a valuable contribution to make to business life. The government plays an important part in forcing through education and training changes, for example by creating more Vocational Subjects in the school curriculum.

Taxation policy

Businesses can brand a valuable influence to the municipal by the taxes they pay. In return, the government can help businesses by spending money on systems like airports, roads, aid to developing nations and many other items.

International policy

The government can approve trade, encourage trades of British goods overseas (exports), or discourage goods undecided in from other countries (imports).

Establishing the 'rules of the game

Many of the directions of this country have been in life for a lengthy time. Others are much fresher. New legislature can be complete at a European Union, national or local identical. These laws set out how people flask and should perform towards one another, and mainly, how business should be lead.