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Economic Influences - Coggle Diagram
Economic Influences
Economic Climate
Changes in the wider economy affect businesses
Economic changes create uncertainty
Different businesses are affected differently
Luxury businesses may be affected more
Businesses selling necessities may be affected less
Employment
High unemployment
Consumer income falls
Spending and demand fall
Easier to recruit workers
Less pressure to raise wages
Low unemployment
Consumer income rises
Spending and demand rise
Harder to recruit workers
More pressure to raise wages
Consumer Income
Higher income
More consumer spending
Demand increases
Luxury businesses benefit more
Lower income
Less consumer spending
Demand decreases
Consumers choose cheaper products
Luxury businesses affected more
Interest Rates
Higher rates
Borrowing is more expensive
Businesses invest less
Consumers spend less
Saving becomes more attractive
Demand may fall
Lower rates
Borrowing is cheaper
Businesses invest more
Consumers spend more
Demand may rise
Government Taxation
Higher taxes
Consumers have less disposable income
Spending may fall
Business costs may rise
Profit may fall
Lower taxes
Consumers have more disposable income
Spending may rise
Businesses may have more money to invest
Exchange Rates
Strong pound
Imports cheaper
Exports more expensive
Good for importers
Bad for exporters
Weak pound
Imports more expensive
Exports cheaper
Bad for importers
Good for exporters
Inflation
Effects
Business costs increase
Businesses may raise prices
Less consumers can afford the products
Demand may fall
Profit may fall