Business Economics Essay

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To: Board of Directors, Bristol International Airport From: Dean Cox, Economic Analyst Subject: Economic Analysis Report Date: 14th September 2010 Introduction This report is an economic analyst that investigates the key areas of concern. In this report I will be focusing on Bristol International Airport, the impact of government spending, and the implications of government policies on this company. 1.1 The likely effects on Bristol International Airport of variations in the economic environment. The business cycle is ‘The pattern followed by macroeconomic variables, such as GDP and unemployment that rise and fall irregularly over time, relative to trend. There is some tendency for cyclical movements of large countries to cause similar movements in other countries with whom they trade. ‘(1) There are four stages of the business cycle, stage one is the depression. This is when, not just one country, but many countries have a major downswing in the business cycle. This will cause mass unemployment for all those affected, it will also cause investments in companies to almost grind to a standstill and for interest rates to plummet. This would affect Bristol International Airport as they would have to lay off most of there workers, and in the process loose money due to redundancies, also investment in the business would almost grind to a standstill and any revenue they receive would plummet, causing them to possibly go into liquidation. Stage two of the business cycle is the recession. During this stage of the business cycle, employment is at a low point, with many companies making cutbacks, and laying off employees and not taking on new staff as they are not making enough revenue. During this stage interest rates are also cut to help aid businesses during these times to help them keep afloat, and investment is very low as the prices of stocks and shares fall

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