Economic influences on business activity

What are some economic factors that affect business activity?

• Consumer income

• Unemployment rates

• Interest rates

• Tax rates

How do changes in consumer income affect businesses?

they people spend more, benefiting businesses. When it decreases, businesses may face lower sales.

How can unemployment rates impact businesses?

High unemployment means fewer customers with money to spend, but low unemployment can lead to higher demand for products.

Q4: What is income tax, VAT, and corporation tax?

• Income tax: A tax on an individual's earnings.

what is VAT

• VAT (Value Added Tax): A tax on goods and services at the point of sale.

What is corporation tax?

A tax on a business's profits.

How do interest rates affect businesses and their stakeholders?

Higher interest rates increase borrowing costs, making loans more expensive. Lower rates encourage spending and investment

How does the economic climate change over time?

it can change due to inflation, changes in government policy, and global market conditions, impacting business performance.

What impact do tax rates have on businesses?

it can reduce business profits and lower rates may increase spending and investment.