Impacts of economic factors 0.0 / 5 ? Applied Businessexternal environmentGCSEOCR Created by: jademillwardCreated on: 07-03-17 13:16 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
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