Economic Condition :: Economics

Economic ConditionEconomy from anywhere it could be from the United States or even fromthe UK it self. Can have a huge impact on the firm. The maineconomical influences on a firm argon-1) Inflation2) substitute rates3) Unemployment4) Interest rates1) splashinessIn some(a) things the price of them could go up. Its because prices inthings when time past generally goes up. For precedent a time piececosting 1000 straight off mite go up to 1050 in about a years time, solelythat is if they area no scratches and its in a perfect condition.2)Exchange RatesExchange Rates is the rate of exchange between currencies in assortedcountries for example. 1 is worth about $10 in Hong Kong.3)UnemploymentUnemployment is a amount of people who are unemployed scarce are willingto work and that are actually looking for work or that they can workbut they cant find any. But it could be lots more reasons too.4)Interest rateInterest rate is the way that assert makes money. What they do is whenpeople nee ds money to buy a mob or a car they will need money sothey get loan from a bank. The bank will lend them money but they wanta repayment in a certain amount of time and they also want anotheramount of money which is called arouse. So for example if a personborrows 1000 to buy a car they mite have to pay back 1100 back tothe bank. So that is 10% on the interest rate.But people can also befit from interest rates too. Because if some oneor company puts their saving in a bank they will get interest from it.If they keep the money in a certain amount of time. Could be somethinglike half a year to a year. And the more you pay in the more you willget back from the bank.InflationInflation can have affects on businesses too and below I have listedsome of the different types of inflation.1) Cost of raw material2) Sales will go down3) Further consequences-* Reduce costs,* Lower wages,* Dismiss some staff,* Eventually bankruptInterest rates (increase)Interest rates can have a affect on a compan y too. That shows anythingcan humble can have a big effect on a business. That why it is hard tohave your own business. Below I have listed different types ofinterest rates-* Firms cost of borrowing will increase also that means less likely to invest in new equipment.* Consumers will cut down less. A) because they are encouraged to save more so you get better interest rate.