There are economic systems with different ideologies, for example socialism endorses government owned and regulated industry. Capitalism endorses free market competition. The allocation of resources in socialism is done by the government on the basis of their judgement of the requirements. Since in a socialist economy, only the state owns any and all industries and production and there is no private property, hence the state may allocate resources as it thinks best. Capitalism, allocates resources on the basis of the demand and supply requirements in the market, which have been created due to interaction of market forces unrestricted by government control. …show more content…
monetary, fiscal, social,) explain how the taxation level, interest rate, value of the pound and euro will positively or negatively affect business organization). The policies created by the government impact businesses as they directly influence their operations. Monetary policies impact money supply and thereby affect interest rates, cash reserve ratio (CRR) requirements of banks and perform the role of being a regulator for inflation. Fiscal policies refer to the collection of revenue and spending by the government. These influence the tax rates that exist throughout the economy. Governments can use this as a tool to stimulate or conversely rear in the demand and spending in an economy. Both of these types of policies have a deep impact on the functioning of businesses. An increase in the rate of taxes means that organizations will have to pay the government more than before, thereby reducing their profits. Decreasing CRR means that banks will be able to lend more money to businesses by which they would be able to make better business …show more content…
Now EU laws are same for all European Union’s countries. All countries have to follow the Union’s legislation. If any organization or EU countries want to do business, it needs to contact with European Money Union and it needs to transect in Euro. EU policies have immense influence on UK businesses through spending and taxation law, spending and directive, inspiring business activity through support and subsidies. All UK companies can exchange their product with other EU countries without any barrier. There is no boarder barrier. If UK companies have licenses they can easily export their products to other EU countries or import products from other EU countries. National authorities can monitor the activities of the business organizations locally. Directives have to be implemented in national