external influences
- Created by: afiii
- Created on: 16-04-19 07:44
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- External influences on business activity
- GDP
- total value of goods and services produced in a counrty
- increase in GDP
- increases employment
- increases consumer incomes
- rising demands for business's profucts
- dependent on how income elastic demand is
- e.g luxury goods have an income elasticity of >+1
- income rises - demand rises
- inferiror goods have a negative income elasticity
- income rises- demand falls
- e.g luxury goods have an income elasticity of >+1
- dependent on how income elastic demand is
- rising demands for business's profucts
- increases consumer incomes
- increases employment
- Inflation
- price rise due to cost rising ( cost-push) or demand rising (demand-pull)
- high inflation
- anti-inflationary measures ; increase in interest rates
- disadvantag-eous for high geared companies
- job security
- uncertaintiy about real income value
- demand high wage
- industrial disputes
- disrupts productions
- increase costs
- disrupts productions
- industrial disputes
- demand high wage
- uncertaintiy about real income value
- anti-inflationary measures ; increase in interest rates
- low inflation
- implement a price increase
- fixed assets value increase
- value of business increases
- financial security
- value of business increases
- fixed assets value increase
- implement a price increase
- Exchange rates
- appreciation
- rise in external value of the currency
- -
- exports dearerer
- fall in demand
- imports cheap
- reduction in competition
- consumers switch to imports
- reduction in competition
- exports dearerer
- +
- imports cheap
- increase competiveness
- reduce rate of inflation due to decrease in prices of imported goods
- imports cheap
- depreciation
- -
- rising costs
- increasing price
- Inflation
- price rise due to cost rising ( cost-push) or demand rising (demand-pull)
- high inflation
- anti-inflationary measures ; increase in interest rates
- disadvantag-eous for high geared companies
- job security
- uncertaintiy about real income value
- demand high wage
- industrial disputes
- disrupts productions
- increase costs
- disrupts productions
- industrial disputes
- demand high wage
- uncertaintiy about real income value
- anti-inflationary measures ; increase in interest rates
- low inflation
- implement a price increase
- fixed assets value increase
- value of business increases
- financial security
- value of business increases
- fixed assets value increase
- implement a price increase
- Inflation
- increasing price
- rising costs
- +
- less price competition from importeters
- -
- appreciation
- GDP
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