With reference to extract one, assess the likely effect of a fall in the sterling exchange rate on the UK’s deficit in the trade of goods and services. (12 marks) A fall in the exchange rate of 25% means the pound becomes weaker, this means imports are more expensive, and exports are cheaper. As a result of this, this may mean a large increase in demand for exports and a considerable decrease in demand for imports, therefore decreasing the deficit of the balance of payments in the UK as predicted. However, if the goods we are importing and exporting are inelastic, meaning they have a less than proportional response to price, an increase in the price of imports, and a decrease in the price of exports may not have a great effect on the trade of goods and services and so therefore not improve on the deficit the UK holds. As stated in extract 1, it tells us that the goods we import are not made in the UK and so makes it impossible to replace the imports, therefore meaning that we still have to import goods, despite the high prices due to the low exchange rate of sterling.
Task 1 Tesco For this task I chose to review’s Tesco organisations because I like how they are improving their growth in low economy percentage and demand. The image of business cycle: Growth Growth Define boom and recession Boom- The boom stage is when everyone feels good. At this stage demand increased, unemployment is very low, high competition at the job places. The business confidence is high so they invest more and expand themselves. The customers feel good.
Aldi understand that the retailer has a great impact on employment. Actually, the retail industry is labor-intensive industry. Aldi employs a lot of students, the disabled and the elderly workers and paying them lower rates. In an industry usually high staff turnover, these workers provide a higher level of loyalty, so is the ideal employee. Economical Factors UK’s economy is strong enough to avoid recession in 2008, but there are high unemployment and uncertainty in the economic conditions.
I do not agree with her as well on raising the bank reserve requirements as it can restrain lending from banks and as a result it will shrink the economy growth. After analyzing my colleagues’ recommendations, and as the president’s senior economic advisor, I recommend the following: * We should lower income taxes. This shall increase the aggregate demand as the consumer disposable income will increase, which leads to an increase in the consumer spending. If the consumer spending increases, it will bring back up the flow of business and operations which means more jobs opening in the market and low unemployment rates. * Lowering banks’ interest rates.
Even though the acid-test ratio is less than 1 which rates in the lower third quartile in the industry of 1.6, 0.9 to 0.6, it indicates a concern with repaying current liabilities. This could be due to quick expansion of inventory with the intention of increasing sales. While this is currently considered a weakness and is concerning, a rise in the ratio should be seen by 2013 due to the increase of suggested sales. 3. I calculated an “inventory turnover ratio” which measures the number of times a company sells its inventory during a year.
As a firm grows the average cost of advertising per unit will fall, leading to lower average costs. e.g., small firms are unable to afford large scale advertising campaigns, while their larger competitors are able to finance television and radio campaigns. b) Explain two reasons why McDonald’s will be able to achieve more marketing economies of scale than GBK. McDonald’s is the market leader in the UK; the company is a much bigger firm than GBK with 1,225 UK outlets. A large firm can spread its advertising and marketing budget over a large output and it can purchase its inputs in bulk at negotiated discounted prices if it has sufficient
As seen on the income statement by accounts receivable and annual credit sales Amazon was able to decrease the amount of days it took to collect on accounts receivable. The financial state of Amazon at this point of review, as some concerns with common stock outstanding, this led to the period in which the income statement shows a $-39 million dollar on net income. In 2012 sales did increase only due to more electronic transactions, new innovative Internet transactions and the rise in shipping costs, due to this there was a significant rise in prices of the products that Amazon sells. In 2013 Amazon must increase net income and retained earnings in order to continue to be a successful corporation.
The higher the rate the more expensive borrowing would be. This means that it is more expensive to borrow money to support investment and growth. This all demonstrates to us that McDonalds will be more dependent upon the availability of credit as they are a franchise company. Inflation If McDonalds have high levels of inflation then they will have the lack of confidence in the future, as they will not be able to take on new things because the business is not able to buy many things for the money they have. There will be reduced profitability as there will an increase in costs which means that sales prices will go up.
KI may see people coming from further afield as the customers may thing that this drop in fuel price will allow them to live further away from their jobs or travel further to work. When the oil prices fall this means that inevitably, businesses will be more profitable which will make their stakeholders wealthier and their employees wealthier and could increase the chances of them buying a house. European union- is a politico-economic union of 28 member states that are located primarily in Europe. The biggest
We need to make these sugary drinks not so easy to buy. Everyday the soda companies come out with some new drink to suck us in to buying them and getting us hooked. Pepsi and coke are famous for this, but we still feel the need to try the drinks that come out. Even though most of us know that these drinks we consume are bad for us. In conclusion I believe having a tax that increases the prices on sugary drinks is a good place to start for the obesity epidemic.