a) Helping small businesses is regarded as a supply side policy because if existing small businesses expand and more businesses set up, it will promote competition meaning that larger firms can't control supply, restrict competition or charge higher prices. Therefore, aggregate supply will increase (which is the main aim for a supply side policy).
b) All of the grants mentioned in the case above except for the exhibition grants are given with the aim of boosting output and lowering costs of production for the small businesses. This is because they all mean that small businesses will have to spend less on costs such as wages, rent and machinery which influence supply. As a result, the businesses will benefit because if production costs fall, supply will increase as production becomes more profitable resulting in the small businesses expanding. Moreover, the interest relief grants will allow the small businesses to loan more money which will be used to purchase more capital for industrial use. This will lead to the businesses benefiting as more capital is likely to improve productivity and efficiency, thus helping them expand.
a) Aggregate supply will increase as the number of businesses in the economy increases, which is why encouraging small businesses is a supply-side policy. More small businesses means more people are employed, so the whole productive potential of the economy increases.
b) The grants listed all reduce the costs of expansion for small businesses, thereby encouraging the growth of small businesses. For example, a business owner might exhibit outside their local area to increase business nationally and the exhibition grant encourages business owners to do this, because it reduces the cost of exhibiting. The grants can also help businesses just starting out, not looking to expand yet. An example of this is the rent relief grant, which reduces the cost of renting a shop/office/factory to locate the business in its first year.
a) By helping small businesses to get set up or supporting their growth, this will allow them overall to produce and supply more as well as promote competition that will lessen the control that large firms have over supply, which is why helping small businesses is regarded as a supply side policy
b) All grants mentioned in the case above all allow small businesses to cut their costs thus giving them more disposable income thus encouraging their growth and increased production since production costs such as rent, machinery and wages decrease with the interest relief grants and they are encouraged to trade and expand with the benefits of the removal and exhibition grants
a) Helping small businesses is considered a supply side policy because if small firms expand or new businesses set up, aggregate supply will increase. This is because more people will be employed therefore increasing the productive potential within the economy. It will also create more competition within the market, meaning that other firms have to become more efficient as well.
b) Businesses are likely to benefit from these grants as all of them are aimed at reducing production costs and costs in general. For example, an entrepreneur would not have to worry too much about keeping the wages he pays his employees very low in order to make enough profit because the trainee employment grant will cover the majority of the wages for the first year. The entrepreneur will also have 50% off his utility payments for his business thanks to the basic services grant. All these forms of help would benefit entrepreneurs and encourage people to start a business because it would make making profit a lot easier.
a) Encouraging small firms to set up or expand will result in an increase of aggregate supply in the economy. More people will also be employed for production, increasing the productive potential, which is why helping small firms is a supply-side policy.
b)The trainee employment grants will reduce the cost of hiring employees, so firms can hire more to increase production. Basic service grants will cover costs such as electricity and gas, so that more money can be spent on capital and labour. Rent relief grants cover up to 50% of rent and interest relief grants will reduce the interest that firms must pay back for loans. These grants will benefit small businesses by reducing their production costs, and therefore increasing their profits so that they have a higher chance of survival in a competitive market.
a) The result of helping small firms and businesses is beneficial as small businesses in an economy prevents monopolies or oligopolies. This in turn will mean competition exists in the respective economy leading to technological advances and more efficient working practices, so higher productivity. This increases aggregate supply and so is a supply side policy.
b) All grants listed above encourage small businesses as it reduces their costs and so means more goods can be created for less or the same amount of money. This allows small firms to be more competitive. For instance 'trainee employment grants' benefit these small business as it reduces the amount of money spent on wages for trainee employees. Additionally these cost reductions can lead to potential for higher profit. This would encourage more people to create or even support and invest in small businesses. -Rohan
a) By helping small businesses, the government can influence aggregate supply, since this will prevent large firms from controlling supply. This is because by allowing smaller firms to expand, competition is being promoted, which is ensures higher productivity from each firm, therefore causing aggregate supply to increase.
b) The grants mainly revolve around reducing the production costs for the small firms, to help in increasing production, as they will be able to produce a greater amount of goods and services, for the same costs of production. Each of the grants focus on the different factors of production and reducing the costs for them. For example the 'rent relief grants' reduces the cost for land, which contributes to lower production costs overall and this is beneficial for the small firms as they will generate more profit. Furthermore, the 'trainee employment grants' encourages firms to increase the quantity of labour, which is helpful in improving productivity for the firm. These reduced costs can have numerous advantages for the small firms, as explained above, and is definitely a key factor in the firms generating more profit through improved productivity, which can also help them expand.
a) A supply-side policy is a government policy intended to increase aggregate supply by increasing the productive potential of an economy. If more businesses are set up, or existing small firms expand, competition in product markets in the economy will increase as there are more firms struggling to grow and expand; this competition will improve the efficiency of these product markets, and as goods and services can be produced more efficiently the productive potential of the economy as an amalgamation of these product markets will increase, allowing for an increase in aggregate supply. Helping SMEs establish themselves and grow in an economy is therefore a supply-side policy.
b) Any form of grant to a business would benefit that business as it would help to reduce the costs of production of that business (a proportion of these is ‘absorbed’ by the grant), thereby allowing for the business to produce more goods and services at the same cost, increasing revenues and thus profits and as a result allowing for growth as well as increasing competitiveness in the context of the market(s) in which the SME is involved as a whole. In the case of SMEs in Sunderland, the grants offered absorb the costs of three factors of production: rent relief grants, interest relief grants, removal grants and exhibition grants absorb the costs of land, basic services grants and interest relief grants those of capital (both fixed such as machinery and working such as electricity) and trainee employment grants those of labour. For example, the latter enables SMEs to pay only 25% of what they would have to pay to afford new trainees in their first year of training and 75% in their second, saving the opportunity cost of 75% of a trainee’s wages in their first year and 25% in their second and thus allowing the SME to invest this elsewhere to increase production. As a result, the SME has spent the same sum of money as they would have without the grant, but instead of this being directed solely at the trainee it has also been used to help the business in other ways, thereby increasing the productive output of the business as a whole for the same quantity of spending.
(a) Supply-side policies are used as a tool by the government to increase aggregate supply. By encouraging small businesses to start-up or expand through providing the financial assistance needed by individuals or groups of individuals running the company, it acts as an incentive for them to enter a specific economy and increase the size of their business. This increases the production potential of a country as well as in a specific product market as small businesses have the means and funds to invest in capital, train their employees, expand or open more factories …etc., which all are factors of production and can be used to increase output. Moreover, as a higher number of small businesses are entering the market, this promotes competition and efficiency within firms and causes them to produce a larger number of goods in the same time period or using the same number of resources which is why helping a small business is regarded as a supply-side policy as it increases aggregate supply in an economy.
(b) Small businesses are likely to benefit from the help provided by local governments as, for example, trainee employment grants reduce the costs of production (wages) for a firm. The opportunity cost of spending the 75% of the business revenue on wages could be spent on other factors of production such as land or capital. This allows a business to expand and increase the production potential of the firm by buying new technological and efficient machinery and extending or building another factory so a firm is capable of producing and manufacturing a higher number of goods to supply in the market. Also, these grants, designed to help small firms, can encourage entrepreneurship and individuals may be more confident to set up a small businesses as, initially, most of their costs are covered by the government which can result in positive future success prospects.
(a) A supply side policy aims to increase the aggregate supply of a country and to shifts its ppc outwards, by helping small business the government is promoting the comptetion in the market and stopping the larger business from restricting the supply and using their power to maintain their positions. This will in turn that there are more firms producing more products, therefore increasing the country's aggregate demand.
(b) Small businesses can often find that there are extremely high barriers to entry for some highly competitive markets, and even when there aren't, it can be very difficult to start up and produce enough supply to get enough profits to stay in business. Help like this provided by the local governments can aid these small firms by reducing their total costs and therefore making the whole production process more profitable. By the use of the trainee employment grants, th wages for the firm's employees would no longer be as big a burden to the firm itself and as production is more profitable, this will result in an increase in supply. Th same way, the rent relief grant would reduce some of the small businesses' costs for rent, sometimes by half, thus making their first year run more smoothly, allowing the business to settle into a position within the market, again increasing the production capability of the economy, by increasing the profits of production for firms.
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ReplyDeletea) Helping small businesses is regarded as a supply side policy because if existing small businesses expand and more businesses set up, it will promote competition meaning that larger firms can't control supply, restrict competition or charge higher prices. Therefore, aggregate supply will increase (which is the main aim for a supply side policy).
ReplyDeleteb) All of the grants mentioned in the case above except for the exhibition grants are given with the aim of boosting output and lowering costs of production for the small businesses. This is because they all mean that small businesses will have to spend less on costs such as wages, rent and machinery which influence supply. As a result, the businesses will benefit because if production costs fall, supply will increase as production becomes more profitable resulting in the small businesses expanding. Moreover, the interest relief grants will allow the small businesses to loan more money which will be used to purchase more capital for industrial use. This will lead to the businesses benefiting as more capital is likely to improve productivity and efficiency, thus helping them expand.
a) Aggregate supply will increase as the number of businesses in the economy increases, which is why encouraging small businesses is a supply-side policy. More small businesses means more people are employed, so the whole productive potential of the economy increases.
ReplyDeleteb) The grants listed all reduce the costs of expansion for small businesses, thereby encouraging the growth of small businesses. For example, a business owner might exhibit outside their local area to increase business nationally and the exhibition grant encourages business owners to do this, because it reduces the cost of exhibiting. The grants can also help businesses just starting out, not looking to expand yet. An example of this is the rent relief grant, which reduces the cost of renting a shop/office/factory to locate the business in its first year.
a) By helping small businesses to get set up or supporting their growth, this will allow them overall to produce and supply more as well as promote competition that will lessen the control that large firms have over supply, which is why helping small businesses is regarded as a supply side policy
ReplyDeleteb) All grants mentioned in the case above all allow small businesses to cut their costs thus giving them more disposable income thus encouraging their growth and increased production since production costs such as rent, machinery and wages decrease with the interest relief grants and they are encouraged to trade and expand with the benefits of the removal and exhibition grants
-Zak Wilke
a) Helping small businesses is considered a supply side policy because if small firms expand or new businesses set up, aggregate supply will increase. This is because more people will be employed therefore increasing the productive potential within the economy. It will also create more competition within the market, meaning that other firms have to become more efficient as well.
ReplyDeleteb) Businesses are likely to benefit from these grants as all of them are aimed at reducing production costs and costs in general. For example, an entrepreneur would not have to worry too much about keeping the wages he pays his employees very low in order to make enough profit because the trainee employment grant will cover the majority of the wages for the first year. The entrepreneur will also have 50% off his utility payments for his business thanks to the basic services grant. All these forms of help would benefit entrepreneurs and encourage people to start a business because it would make making profit a lot easier.
Albert
a) Encouraging small firms to set up or expand will result in an increase of aggregate supply in the economy. More people will also be employed for production, increasing the productive potential, which is why helping small firms is a supply-side policy.
ReplyDeleteb)The trainee employment grants will reduce the cost of hiring employees, so firms can hire more to increase production. Basic service grants will cover costs such as electricity and gas, so that more money can be spent on capital and labour. Rent relief grants cover up to 50% of rent and interest relief grants will reduce the interest that firms must pay back for loans. These grants will benefit small businesses by reducing their production costs, and therefore increasing their profits so that they have a higher chance of survival in a competitive market.
a) The result of helping small firms and businesses is beneficial as small businesses in an economy prevents monopolies or oligopolies. This in turn will mean competition exists in the respective economy leading to technological advances and more efficient working practices, so higher productivity. This increases aggregate supply and so is a supply side policy.
ReplyDeleteb) All grants listed above encourage small businesses as it reduces their costs and so means more goods can be created for less or the same amount of money. This allows small firms to be more competitive. For instance 'trainee employment grants' benefit these small business as it reduces the amount of money spent on wages for trainee employees. Additionally these cost reductions can lead to potential for higher profit. This would encourage more people to create or even support and invest in small businesses.
-Rohan
a) By helping small businesses, the government can influence aggregate supply, since this will prevent large firms from controlling supply. This is because by allowing smaller firms to expand, competition is being promoted, which is ensures higher productivity from each firm, therefore causing aggregate supply to increase.
ReplyDeleteb) The grants mainly revolve around reducing the production costs for the small firms, to help in increasing production, as they will be able to produce a greater amount of goods and services, for the same costs of production. Each of the grants focus on the different factors of production and reducing the costs for them. For example the 'rent relief grants' reduces the cost for land, which contributes to lower production costs overall and this is beneficial for the small firms as they will generate more profit. Furthermore, the 'trainee employment grants' encourages firms to increase the quantity of labour, which is helpful in improving productivity for the firm. These reduced costs can have numerous advantages for the small firms, as explained above, and is definitely a key factor in the firms generating more profit through improved productivity, which can also help them expand.
Abhishek Nair
a) A supply-side policy is a government policy intended to increase aggregate supply by increasing the productive potential of an economy. If more businesses are set up, or existing small firms expand, competition in product markets in the economy will increase as there are more firms struggling to grow and expand; this competition will improve the efficiency of these product markets, and as goods and services can be produced more efficiently the productive potential of the economy as an amalgamation of these product markets will increase, allowing for an increase in aggregate supply. Helping SMEs establish themselves and grow in an economy is therefore a supply-side policy.
ReplyDeleteb) Any form of grant to a business would benefit that business as it would help to reduce the costs of production of that business (a proportion of these is ‘absorbed’ by the grant), thereby allowing for the business to produce more goods and services at the same cost, increasing revenues and thus profits and as a result allowing for growth as well as increasing competitiveness in the context of the market(s) in which the SME is involved as a whole. In the case of SMEs in Sunderland, the grants offered absorb the costs of three factors of production: rent relief grants, interest relief grants, removal grants and exhibition grants absorb the costs of land, basic services grants and interest relief grants those of capital (both fixed such as machinery and working such as electricity) and trainee employment grants those of labour.
For example, the latter enables SMEs to pay only 25% of what they would have to pay to afford new trainees in their first year of training and 75% in their second, saving the opportunity cost of 75% of a trainee’s wages in their first year and 25% in their second and thus allowing the SME to invest this elsewhere to increase production. As a result, the SME has spent the same sum of money as they would have without the grant, but instead of this being directed solely at the trainee it has also been used to help the business in other ways, thereby increasing the productive output of the business as a whole for the same quantity of spending.
-Ryan
(a) Supply-side policies are used as a tool by the government to increase aggregate supply. By encouraging small businesses to start-up or expand through providing the financial assistance needed by individuals or groups of individuals running the company, it acts as an incentive for them to enter a specific economy and increase the size of their business. This increases the production potential of a country as well as in a specific product market as small businesses have the means and funds to invest in capital, train their employees, expand or open more factories …etc., which all are factors of production and can be used to increase output. Moreover, as a higher number of small businesses are entering the market, this promotes competition and efficiency within firms and causes them to produce a larger number of goods in the same time period or using the same number of resources which is why helping a small business is regarded as a supply-side policy as it increases aggregate supply in an economy.
ReplyDelete(b) Small businesses are likely to benefit from the help provided by local governments as, for example, trainee employment grants reduce the costs of production (wages) for a firm. The opportunity cost of spending the 75% of the business revenue on wages could be spent on other factors of production such as land or capital. This allows a business to expand and increase the production potential of the firm by buying new technological and efficient machinery and extending or building another factory so a firm is capable of producing and manufacturing a higher number of goods to supply in the market. Also, these grants, designed to help small firms, can encourage entrepreneurship and individuals may be more confident to set up a small businesses as, initially, most of their costs are covered by the government which can result in positive future success prospects.
Zahra Karmally
(a) A supply side policy aims to increase the aggregate supply of a country and to shifts its ppc outwards, by helping small business the government is promoting the comptetion in the market and stopping the larger business from restricting the supply and using their power to maintain their positions. This will in turn that there are more firms producing more products, therefore increasing the country's aggregate demand.
ReplyDelete(b) Small businesses can often find that there are extremely high barriers to entry for some highly competitive markets, and even when there aren't, it can be very difficult to start up and produce enough supply to get enough profits to stay in business. Help like this provided by the local governments can aid these small firms by reducing their total costs and therefore making the whole production process more profitable. By the use of the trainee employment grants, th wages for the firm's employees would no longer be as big a burden to the firm itself and as production is more profitable, this will result in an increase in supply. Th same way, the rent relief grant would reduce some of the small businesses' costs for rent, sometimes by half, thus making their first year run more smoothly, allowing the business to settle into a position within the market, again increasing the production capability of the economy, by increasing the profits of production for firms.
Cameron Afkhami