Skip to content

ACCA Applied Knowledge · Business and Technology · Political and legal factors affecting business

A government introduces a new law requiring all employers to give staff a minimum number of paid holiday days. For a manufacturing company, what is the MOST direct effect of this law?

The most direct effect is higher labour costs and a need to reorganise staff scheduling to cover the extra paid holiday. Employment law of this type does not directly change corporate tax rates or currency exchange rates.

  1. AAn increase in labour costs and a need to adjust staff schedulingCorrect
  2. BA reduction in the rate of corporate income tax
  3. CA change in the exchange rate between the domestic and foreign currencies

Explanation

Paid holiday raises the cost of employing each worker and requires cover to be planned. The law has no direct link to corporate income tax rates or to exchange rates.

Did you get it right without looking?

One question tells you little. A timed set on Political and legal factors affecting business shows your real accuracy, how long you take and where you lose marks.

Practise Political and legal factors affecting businessFree diagnostic mock

More Political and legal factors affecting business questions