How Government Spending Could Affect A Tile Business Essay Example

fiscal policies use taxation to regulate demand in the economy. Both types of policy influence demand for goods and services and investment decisions. Additionally, media speculation about the UK's economic future also affects investment choices.

The taxation policy has two types, direct and indirect, and aims to manage the distribution of funds. If tax rates increase, AL-MURAD may face adverse consequences such as lower demand for their luxury goods, reduced profits, and staff layoffs due to customers having limited funds. However, higher taxes can also benefit the government by generating additional income for public services like education and hospitals. In this scenario, AL-MURAD could potentially profit by obtaining contracts with these services and expanding their business through purchasing more tiles.

AL-MURAD anticipates that reducing taxes will lead to an upsurge in the economy's overall demand, generating elevated revenue for both the company and its clients. The government endeavors to maintain a balance between taxation and employment within the economy. Monetarists recommend regulating the money supply as a means of stabilizing the economy, which pertains to the total amount of funds accessible for expenditure within a country.

Controlling inflation caused by excessive aggregate demand in the United Kingdom can be effectively achieved through monetary policy, although it may negatively impact the overall economy that relies on demand for its goods and services. The AL-MURAD case highlights the potential consequences of inflation and reduced demand, as businesses struggle to pay wages due to fewer customers leading to job losses. This further exacerbates the recession until there is a recovery in demand for goods and services.

To mitigate these issues, the government implemented a permanent increase in income tax personal allowance.

This measure benefits 22 million basic rate taxpayers and 500,000 households over an extended period of time. The initial raise of ?120/year has been followed by another set at ?145/year from April onwards.

Upon examining http://news.bbc.co.uk/2/hi/uk/politics/7745340.stm, it is evident that the income tax-free threshold has increased from ?120 to ?145. This increase presents a potential opportunity for AL-MURAD as customers may have more disposable income to spend on indulgent purchases, which could result in an increase in profits for the company.

The UK interest rates have been reduced to a historic low of 0.5% by the Bank of England, which has also revealed its intention to enhance the money supply in order to support economic recuperation. To find out more, please go to http://news.bbc.

According to the BBC News, interest rates in the UK have decreased by 0.5%, resulting in lower bank charges and making purchases more affordable for customers with limited budgets. AL-MURADs, located in the UK and part of the European Union, can engage in barrier-free trade across Europe without import/export taxes. However, using pounds as currency puts them at a disadvantage due to additional expenses from exchange rates. Adopting the Euro would simplify trading further by eliminating exchange rates.

AL-MURAD trades globally, including outside of Europe in countries such as Pakistan. However, they encounter security issues when exporting from these countries, as the products need to be thoroughly checked for safety in order to avoid delays and associated costs upon arrival in Europe. If the European Union reduces barriers to trading and eliminates import/export taxes, AL-MURAD can expand its stores nationwide and into other European countries. Additionally, with a reduction in EU unemployment (which reached

20 million across the 27 member states in March), AL-MURAD could experience increased business opportunities. http://news.bbc.co.

As reported by uk/1/hi/business/8026546.stm, the EU is facing a high unemployment rate of 20 million, resulting in many individuals unable to earn an income. This could negatively impact AL-MURAD's sales as fewer people may purchase their products, leading to a decrease in profit margin. If the EU develops further than the UK, it is possible that Euro currency may be adopted which would benefit AL-MURAD by eliminating exchange rate costs and facilitating competitive pricing.

AL-MURAD currently sources tiles from hot countries like Pakistan due to unfavorable weather conditions for tile production in the UK. However, if Turkey joins the EU, this could prove advantageous for AL-MURAD as they can enjoy tax exemptions and minimal security checks while purchasing tiles at cheaper prices - saving both time and money.