Business Unit 4 notes

Good for the economy - 

- Increased incomes

- High employment 

- Increased production 

- Government recieving more tax 

Bad for the economy - 

- High unemployment 

- Low pay rises and pay cuts 

- Businesses selling less and cut down on production 

- Low taxes for the government 

The governments objects for the economy 

- Stable and low rate of inflation 

- Balance of payments equilibrium 

- Low unemployment 

- Econmic growth 

Explains how an increase in spending has a greater effect on the economy...

- More people employed

- More people have income to spend 

- Demand for goods increases

- High demand will increase production 

- More production means more people employed 

Government spending = 

- Higher sales of goods

- Increaed spending 

- Firms achieve higher profits

- Increased employment 

- Equality 

Prepotionate to income

- Certainity 

Tax should be clear to understand

- Convenience of payment 

Taxes should be collected in a manor convenient for the tax payer

- Eonomy of Collection 

Taxes shouldn't be expensive to collect and should not discourage businesses

"Economic Growth is best achieved by lowering barriers for people to produce goods and services"

1. Lower income tax - less tax - more production

2. Lower capital gains tax - incentive to expand as a business

3. Reduce regulations and Red tape - time and money is taken away from production

4. Training and education - More skilled people

5. Flexible workforce - 9 day fortnight

6. Mobility - helping the workforce move around to jobs and businesses 

Strengths 

- Sustained growth 

- Large fall in unemployment 

- Low inflation and improvements in macroeconomics 

- UK has a felxiable labour market 

Weaknesses 

- An investment gap in public sector services 

- Manufacturing industries suffer

- Other countries have faster growth rates

- Rise in the blance of payments deficit suggests continual problems