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Essay / Research Paper Abstract
This 5 page paper considers two economic problems, uncertainty regarding growth and fear of increased interest rates in order to examine the impacts these problems will have on a business. The bibliography cites 4 sources.
5 pages (~225 words per page)
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Unformatted sample text from the term paper:
are several concerns in regarding the economy. In considering two of these a better understanding may be gained for any business. There are concerns regarding the performance of the economy.
The pre-budget speech made by Gordon Brown has proven that the governments estimates were over optimistic meaning that the tax levels expected were not realised and to meet spending plans
borrowing will have to be increased. This may indicate rises in indirect, or even direct taxes in the future, the problem becomes on of uncertainty.
This increases the concerns for the economy where the biggest problem may be seen as that of uncertainty and fears that interest rates may have to rise
at the same time as seeing slower growth. The result is the need to reduce costs. One example of the current climate is overstaffing, and many companies such as AMP
may have to announce redundancies., This single large company made 1,5000 employees redundant in June 2002 and in December 2002 have announced another 1,900 redundancies (Bolger, 2002).
Planning in this environment becomes hard. The commitment required for investment may be limited if there are fears of decreased income. This creates a negative effect
in the economy as fewer companies and individuals want to make investments. The potentially lower levels of income mean that the investment may reduce profits to shareholders, the primary stakeholders
of the group. The result is a need to reduce costs and possibly cut capacity is sales fall. When sales fall there will
also be difficult decision regarding how to deal with the fall. The relationship between supply and demand shows that as demand drops the price should also fall in order to