Economic Aspects Of The Economy From Anywhere It Can Be From The UK

Submitted By Imad-Chraibi
Words: 775
Pages: 4

Economic Condition

Economy from anywhere it could be from the United States or even from the UK it self. Can have a huge impact on the firm. The main economical influences on a firm are:-

1) Inflation
2) Exchange rates
3) Unemployment
4) Interest rates

1) inflation

In some things the price of them could go up. It's because prices in things when time past generally goes up. For example a time piece costing £1000 today mite go up to £1050 in about a years time, But that is if they area no scratches and it's in a perfect condition.

2)Exchange Rates

Exchange Rates is the rate of exchange between currencies in different countries for example. £1 is worth about $10 in Hong Kong.


Unemployment is a amount of people who are unemployed but are willing to work and that are actually looking for work or that they can work but they can't find any. But it could be lots more reasons too.

4)Interest rate

Interest rate is the way that bank makes money. What they do is when people needs money to buy a house or a car they will need money so they get loan from a bank. The bank will lend them money but they want a repayment in a certain amount of time and they also want another amount of money which is called interest. So for example if a person borrows £1000 to buy a car they mite have to pay back £1100 back to the bank. So that is 10% on the interest rate.

But people can also befit from interest rates too. Because if some one or 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 something like half a year to a year. And the more you pay in the more you will get back from the bank.


Inflation can have affects on businesses too and below I have listed some of the different types of inflation.

1) Cost of raw material
2) Sales will go down
3) Further consequences:-

* Reduce costs,
* Lower wages,
* Dismiss some staff,
* Eventually bankrupt

Interest rates (increase)

Interest rates can have a affect on a company too. That shows anything can small can have a big effect on a business. That why it is hard to have your own business. Below I have listed different types of interest rates:-

* Firms cost of borrowing will increase also that means less likely to invest in new equipment.

* Consumers will spend less. A) because they are encouraged to save more so you get better interest rate. So that means they will get more money. Who doesn't want that B) because more expensive to borrow Unemployment

Unemployment also has a large affect on a business it's because if lots of people is unemployed that means they will have no money to spend on the goods that you are selling. So the company will get no