Layoffs increase unemployment and decrease consumer spending in all sectors. Less spending means more revenue loss, perpetuating the cycle. Shoplifting affects the economy because it means the store is losing money. When stores lose money, the raise their prices. This causes people to have to pay more for products.
One impact on the business it could have is by people not having jobs they will earn less money and so this would mean that they would have lesson money to spend and so this could have an impact on the profits and amount of money Tesco make. Also with unemployment crime level rises which mean there could be an increase in thefts in the store which could also impact profits for the company. Along with higher crime rates there could be more damage to the stores and property which could create more costs and loss of money on repairing the damage. Despite these negatives it could also mean that Tesco could have more jobs to offer and so help get people out of unemployment and get employed by Tesco. The current number of unemployed people in Spain is £5.9million which is 26.7% this could impact the business in many ways similar to the U.K but this would likely be to a more extreme level due to the fact that unemployment level is 19.2% more in Spain than the U.K.
This greater demand leads to increases in both output and prices. The degree to which higher demand increases output and prices depend, in turn, on the state of the business cycle. If the economy is in recession, with unused productive capacity and unemployed workers, then increases in demand will lead mostly to more output without changing the price level. If the economy is at full employment, by contrast, a fiscal expansion will have more effect on prices and less impact on total output. According to the MPR, the unemployment rate was projected to continue to decline toward its longer-run normal level over the projection period (Monetary Policy Report,
If the money supply is not up the economy will fall and will lead to higher unemployment rates. In Hayek’s eyes the employment rate is dependent on the rate of inflation. The reason for this is that when unemployment rates are low the labor market is smaller because everyone has a job. Employers must raise wages so they can attract more workers. (Hayek, 2008) When wages go up so does the cost of the production, which increases the cost of the consumer goods, and inflation goes up.
The level to which higher demand increases output and prices depends on the state of the business cycle. Without changing the price level will lead to an increase in demand if the economy is in recession. A fiscal expansion will have more of an effect on prices and less impact on total output if the economy is at full employment. To restore output during a recession the government can run an expansionary fiscal policy helping to restore and to return the unemployed to work. The government can run a budget surplus; this will help to slow the economy when inflation seems to be a larger dilemma than unemployment, leading to a budget balanced on
On one hand, it’s simply a supply and demand issue. As wages rise, the demand for labor decreases. In other words, employers will simply stop, decrease, or slow down their hiring. Economists estimate that a ten percent increase in the minimum wage relative to the prices of goods and services decreases total employment of those affected by one or two percent. If the minimum wage increases too much, then it could even force some smaller firms out of business.
In short run profit maximization will increase however in long run it is harder to increase companies profit because they will need perfect information in order to prevent the risk of the market. According to reality in most of times big companies work for society, to get a brand image and name lowering prices, use child labor and pesticides in order to create lower cost and therefore increase their profit. Sometimes companies make polices in order to get subsides as low carbon emission. As a result more consumers are demanding these products. In the short run firms may not increase their profits because the cuts in prices but if they achieve this in long run they may experience maxim profits.
On Friday we will go over all of the Week 1 materials. Please bring your review book and any notes or flash cards you created along with the answers to the key questions for group discussion. Wednesday – Under timed conditions read, analyze and complete the DBQ Mechanization of the cotton industry in India and Japan (2010). This essay is to be hand written as it is timed. Do not attempt to type it up after you are done.
ACC/291 Week 1 Discussion Questions 1. How are bad debts accounted for under the direct write-off method? What are the disadvantages of this method? The direct write-off method is when a company determines that an account is uncollectible and it charges the loss to the Bad Debts Expense. An example of this would be when a customer is not able to pay their bill because due to a downturn in the economy, money may be tight if they have been laid off from their jobs or faced with unexpected hospital bills.
At present, Bessemer’s shareholders are hoping for a higher dividend and cutting it would only upset these shareholders. This decision would also signal poor cash flows, lowering the firm’s value with the cut. Along with this, the firm could be up for a hostile takeover if large blocks of stock are liquidated at once. However, with a lowered stock price, aggressive growth investors may be willing to pick up the slack, thus increasing the stock price and avoiding any possible takeover. Another option for Bessemer is to change their dividend strategy entirely.