Business Markets and the Economy Essay
Business Markets and the Economy
P6 describe how business markets are regulated in the UK (Case Study) M3 explain why the government needs to regulate business markets P7 explain how EU requirements influence business markets in the UK D2 evaluate the effectiveness of the regulatory regime in a selected market
The main purpose of this assignment is to: describe how business markets are regulated in the UK and explain how EU requirements influence business markets in the UK.
Scenario: Case study given
Task 1 (ALL): Students need to consider how governments intervene in markets to regulate them (can be linked to P4). Intervention can be through taxes and subsidies which are designed to distort the market to achieve specific objectives. The work of the Competition Commission, and the offices of the regulators for the privatised but previously state-owned monopolies, should be examined to see the purpose and effect of government intervention. Topics that can be used in a case study example (do not all need to be covered as covered in P4): market failure; justification for intervention; market regulation; deregulation; unfair competition; competition policy; Competition Commission; privatisation; private finance initiative; government policies; subsidies; taxation
This provides evidence for P6 Task 2 (MOST): Students should build on the work for P4 and P6 and explain why governments intervene in markets and what the consequences of market interventions are. There are plenty of examples, reported on regularly where the regulators consider the consequences of industry activity on producers and consumers. For example, rail fares are increased annually and the proposals generate debate about balancing the interests of the train operating companies and passengers. (not to be attempted until completion of P6)
This provides evidence for M3 Task 3 (ALL): Students should report on how EU policies and activities impact on UK business markets. One useful area to consider is in relation to aviation policy and how the EU has tried to put national flag carriers into a competitive framework which confronts national governments’ protectionist practices and gives consumers a better deal. Topics that must be covered: European Union; the single market (free trade, harmonisation, capital, labour, technical standards, simplified trading); monetary union; social chapter
This provides evidence for P7
Task 4 (SOME): Students should evaluate the effectiveness of the regulatory regime in a selected market. If the banking industry is considered then the role of the Financial Services Authority in the period before the recapitalisation of the banks will provide some contrasting views as to its effectiveness.
This provides evidence for D2 Sources of information:
Gillespie A – Business in Action (Hodder Arnold, 2002) ISBN 0340848200 Mankiw
N and Taylor M – Economics (Thomson Learning, 2006) ISBN 1844801330 Marcouse I et al – Business Studies (Hodder Arnold, 2003) ISBN 0340811102 Sawyer M – The UK Economy, 16th Revised Edition (OUP Oxford, 2004) ISBN 0199266514 Sloman J and Sutcliffe M – Economics for Business (Financial Times/Prentice Hall, 2004) ISBN 0273683357
Business sections of broadsheet newspapers
The Financial Times
news.bbc.co.uk/1/hi/business/default.stm The BBC website’s business section.
www.bized.co.uk Bized provides a selection of teaching resources.
www.direct.gov.uk/en/index.htm This is the UK government’s own site and there are links to a range of relevant data sources.
www.esrc.ac.uk/ESRCInfoCentre/facts/index27.aspx?ComponentId=7102&SourcePageId=7079 The ESRC has current UK data.
europa.eu Website of the European Union
www.ofgem.gov.uk/Pages/OfgemHome.aspx Office of the Gas and Electricity Markets – the regulatory authority. Each regulator has a similar site.
www.statistics.gov.uk The UK Statistics Authority.
www.ukpublicspending.co.uk The site has data on public spending both current and historic.