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Macroeconomic factors that affect businesses
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Macro-Economic Factors that Affect a Business
479 Words1 Page
Recommended: Macroeconomic factors that affect businesses
Macro-Economic Factors that Affect a Business
There are macro-economic factors which affect a business and there
implications need to be considered when planning ahead.
The interest rate is the basically the cost of borrowing, the price of
money. If money is borrowed it is the percentage over and above the
original loan that has to be paid back. The interest rate is a vital
tool of economic management for the government. Adjusting the
interest rate is a key part of the government’s monetary policy.
Interest rates are set by the Bank of England's Monetary Policy
Committee. They will set the rate according to the prevailing economic
conditions and the inflation target they have been set. If they feel
that there are significant inflationary pressures in the economy, then
they will tend to increase the level of interest rates; such is the
case for PotArts ltd. The interest rates are predicted to rise as
stated in the forecast figures. This will tend to discourage
borrowing and slows economic growth. In the future Mari...
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