(P4) Explain how both fiscal and monetary policy decisions have affected a selected business
In this part of my assignment I will be explaining the use of fiscal and monetary policy and how these policies affect global/international organisation. The organisation I have chosen to refer to in this part of my assignment is Microsoft. Microsoft is an American multinational software corporation headquartered in, Washington that develops, manufactures, licenses, and supports a wide range of products and services related to computing including Laptops, computers, Xbox 360 and Xbox one. The company was famously founded by Bill Gates in 1975. Microsoft is the world's largest software maker measured by revenues and so far has made $77 billion up to now in 2013 alone.
Fiscal policy
Fiscal policy is the use of government expenditure and taxation to try to influence the level of economic activity. The varied use of raised and lowered fiscal policies can have a number of effects on customers, public sector organisations such as the NHS and Police and private limited organisations such as Tesco and Microsoft. Below I will describe how different fiscal policies will directly affect Microsoft and its customers.
Cuts in income tax
If the government fiscal committee decide to cut income tax then this has a direct effect on organisations because it means Microsoft will gain more disposable income and capital spending as some of their revenue income which would go to government is being kept and can be used as retained profit or be used to expand Microsoft as an organisation by building new manufacturing factory’s, employing more staff or bringing out a new product line such as a new windows phone. In tern the cuts of income tax will generally benefit any large organisation, although cuts to income tax don’t benefit public sector organisations because as they are funded by the