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Slide 1

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Different things
that affect a
Kat Ivinson…read more

Slide 2

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Minimum wage, the lowest legal amount a
person can be paid per hour. Businesses would
pay people very little without it. what a business
pays its workers is both an ethical and economic
decision. If it were to rise businesses would
complain due to their costs rising. If this were to
happen businesses would put their prices up
and then the cost of living would go up. So if it
were to rise then firms would sack workers as to
avoid mounting costs.…read more

Slide 3

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Exchange rates:
Exchange rates change according to currency. In
china exchange is very low this is because they
export lots of products. The bank of England
prints money so that the exchange rate is lower,
this means exporting is cheaper and importing is
more expensive. Manufactures do well bus
business that rely on imports suffer.…read more

Slide 4

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Customer demand:
This can easily change and can cause problems for a
business. Discount shops such as Poundland are
doing well at the moment because customers don't
have much money to spend. this means that they
want to buy the same things but at a cheaper price.
This is also why Primark and Aldi are doing well.
When a country is in boom people like to treat
themselves and spend more. There are still some
people that spend plenty of money in a recession
but in general the demand for expensive products
goes down.…read more

Slide 5

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Capital investment is where you replace old
machinery or buy new machinery. Growth is buying
new machinery. Things such as laptops should be
invested in and updated every 3 to 5 years. In Britain
currently we are in growth but it is only 0.5% but it
does mean that firms will begin to invest more as
the economy is on the up. As firms invest more the
economy will grow more and then we will be back
into a boom. This is called the ripple affect as it just
takes firms to invest in the future and then the
countries economy will grow.…read more

Slide 6

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Interest rates:
It is the charge for borrowing money and is the cost
of capital investment. Interest rates are the main
thing that can control a countries economy. At the
moment interest rates are so low that they cannot
be cut, typically in a recession interest rates are cut
to encourage businesses to take out loans and invest
and this investment as seen above would lead to the
countries economy growing. When interest rates
rise customers spend less (as mortgages go up and
thy have to pay for them) this means that demand
falls. Business costs also go up due to the mortgage.…read more

Slide 7

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