Causes of Economic Cycles Economic Growth has a habit of being cyclical. This is due to factors such as: When confidence evaporates in an economy it can have a knock on effect.
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Impact on business changes in the economic environment Essay Sample Introduction In this report I will describe and then explain how the GDP, inflation, interest rates and employment rates are affected by the growth and recession stage of the business cycle.
The indicator is used to measure how much is being made in the UK is known and Gross Domestic Product. GDP is the measure of the business activity in the country as a whole for a particular quarter.
GDP would be affected by the growth of a business cycle as if businesses within the country are doing well the country will be making more growth and money to invest within the UK spending budget without having to borrow from banks as people will have enough money to be paying there taxes, VAT etc.
If the UK GDP is high in the UK withinTesco super market will gain more profit, as businesses will be doing good and people will have more money to spend on within the super market store. Inflation Inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
Inflation is affected by the growth of a business cycle as if inflation rates are high prices of petrol etc. Negative affects could be that there would be no uncertainty of the future as rates will be high, also inflation will discourage investments and saving that people will have saved up for starting up businesses.
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Customers at Tesco will also be hoarding out of concerns that prices will increase within the future and will want to stop spending money. Interest rates The interest rate is the percentage charged, or paid, for the use of money. It is charged when the money is being borrowed, and paid when it is being loaned.
This will affect the business cycle as for those who want to borrow a loan from the bank will have to pay interest on top when they will pay the bank back therefore this will effect the growth of the business cycle as people will be paying a percentage on top of what they borrowed, meaning the money coming in from their businesses will be not only used to repay the bank but a interest rate will also be taken.
This will effect Tesco as a business as if they where to borrow a loan they will have to pay interest on top.
Employment rates The employment rate is an important indicator of the health of the economy. A very high positive relation exists between the variation in amount of goods and services produced in the economy during any given time period and the variability in the employment level shortly after that time period and.
In essence, the greater the level economic production, the greater business cycle and recession stage as if there is unemployment within the UK and the employment rates are low there will be a lot of people unemployed and people that are unemployed will have no money to spend, this means that businesses will not be generating enough money to pay their staff wages therefore, it does affect the business cycle and recession stage as, the UK recession will be in recession due to businesses not doing well.
GDP will also be low due to recession and it will effect the business cycle tremendously. A trade surplus is when the value of exports from the UK is greater than the value of imports.
A trade deficit means that the value of exports from the UK is less than the value of imports. The balances of payments are all the financial imports and exports including those that are trade as well as investments.
A negative balance of payment indicates that more money is flowing out of the country then is flowing in. Farmers no longer farm and produce a lot of thing therefore, Tesco will import most of there goods from abroad this is why if a country like the UK, has a negative balance of payments, this means that the outflow of money is greater than the inflow.
For a business like Asda they are well established in the UK, this may mean that it is harder for them to export their product to other countries. Conflicting objectives and how they affect Tesco Some of the indicators are interlinked and that positively affecting one indicator may have a negative affect on the other.The economic environment in which a business operates has a great influence upon it.
What Is the Economic Environment in Business? - Definition, Importance & Factors What Is the Economic. The environmental impact of paper is significant, but not the environmental and economic impact of the energy consumed by manufacturing, Clay or calcium carbonate are used as fillers for some papers.
Kaolin is the most commonly used clay for coated papers. Mitigation. The term business cycle (economic cycle) refers to fluctuations in economic output in a country or countries.
Well-known cycle phases include recession, depression, recovery, and expansion. A Depression is a long-lasting recessing.
The business cycle often parallels share price changes in the stock market cycle. Economic cycle and external shocks - revision video Subscribe to email updates from tutor2u Economics Join s of fellow Economics teachers and students all getting the tutor2u Economics team's latest resources and support delivered fresh in .
Essay on Environment and Economic Development – Essay 2 ( words) Introduction. Environment and economic growth are interrelated. On one hand, the economic growth of a nation affects the environment. At the same time, the degradation in environmental resources will affect the economic growth.
It is also advisable to walk or ride a cycle. Asset prices often follow the business cycle. High growth leads to rising asset prices which strengthen the boom and then when the economic cycle turns, it leads to falling asset prices which lead to a negative wealth effect and lower spending.
Falling asset prices can make a recession last for a .