Notesale: Turn your study into money

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Unit 39 - Assignment 2
Identify the impact of government spending on the business PC World
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)Government spending is when the government as well as the local council spend their money
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With its
size being 552 billion pounds and 43% GDP, and them having spend their money in three ways, by
paying money to people, providing goods and services which produces itself, and when a business
provides goods and services in return for payment by the government or council
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) PC World is the most widely read computer or business magazine among all purchase influencers,
who sell a wide array of technological products such as laptops, ipods, printers, monitors, hardrives,
desktops, spyware, cameras, etc reaching an average of 6
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Their
dedicated channels let them be able to tailor their services and support to fulfil the individual needs
of small businesses, public sector organisations, Mac users, as well as schools, hospitals, etc
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) I will be answering the question by first outlining how a rise in government spending specifically
on direct contracts with the private sector could affect PC World
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d
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Increase in government spending for companies such as the NHS will also be directly beneficial for
other businesses such as PC World, because they may want to purchase certain IT equipment from
them by placing a large order
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How long both of these will increase depends on the
length of the order and delivery
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But
since this order only lasts for under a year, the support contract would only be temporary and the
extra staff would leave once the order is complete
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Since PC World would also need to order a large amount of
goods from their suppliers, they might offer them a discount, which will increase the profit they
make from this order even more
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Since the demand for stock is high, PC World will be
selling a large supply and will have gained a great amount of income, improving the worthiness of
the business even more for future business customers
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e
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Multiplier means that each time an amount of government spending that’s added on the economy is
re - spent, the result will be an increase in spending
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The spending upon these shops would be increased by £750 million,
which would also raise PC World’s sales greatly and the stability of the company
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But they probably wouldn’t use it this way
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Around £25
million of this £750 million would be spent on PC World for certain IT equipment
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Also, in order to complete
this order for over a year, PC World would probably hire more temporary staff and extend the
working times for their regular staff and purchase extra materials from their suppliers
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This is called the knock on effect, which is when the
money does not get given to them, but instead increases more and more through different stages of
their performance on the order
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The knock on effect can either rise
in the short term, where more is given after each stage, or the long term where the other, full £15
million is added after the entire order is met
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Because such a large amount of income is
involved, even their suppliers will gain higher sales and revenue, due to the greater number of
ordered materials made with PC Worlds enhanced profits
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To conclude, there are many different impacts upon PC World with government spending
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PC World will have great benefits from increase of government spending, mainly much
higher sales and revenue
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