Analysing and Evaluating Economic Variables
Opportunities for Analysis
- Demonstrating
the causes of inflation.
- Showing
how inflation affects a particular organisation’s policies.
- Examining
the reasons for change in interest rates.
- Studying
the implications of changes in interest rates on an organisation.
- Analysing
the implications of fixed and or flexible exchange rates.
- Showing
how exchange rate changes affect an organisation.
Opportunities for Evaluation
- Recognising
how price elasticity of demand will influence the effect of inflation.
- Discussing
how the cause of inflation can have different implications for a company.
- Evaluate
how interest rate changes will affect larger item that are bought on
credit more than smaller non-durable items.
- Evaluating
the significance of exchange rate changes according to whether the firm is
an importer or an exporter; the percentage of trading it does with foreign
countries; and which countries it trades with.
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