Impacts of economic factors

?

Inflation

Impacts: 

  • Prices rising = demand decreases = less revenue
  • High inflation = fewer customers
  • Employees demand higher wages = increases costs/lowers profit.
  • Could lead to more revenue
  • Increased cost of supplies
  • Increased energy/fuel prices
1 of 3

Interest Rates

Impacts

  • Increasing --> less money available for customers to spend = lower sales for business
  • Loans more expensive = business less likely to take out a loan
  • Low rates = business can borrow more money
2 of 3

Unemployment

Impact

  • High unemployment = recruitment becomes easier
  • Lower staff turnover = employees less likely to be able to find other jobs
  • Lower consumer spending
  • Increased demand for inferior goods (lower price, quality)
  • Greater supply of labour - potentially lower wage/salary
3 of 3

Comments

No comments have yet been made

Similar Applied Business resources:

See all Applied Business resources »See all external environment resources »