The Economy Essay -- Economics

The Economy Economic Factors: Interest Rates: An interest rate is the rate of increase over time of a bank deposit Inflation: Inflation is persistent increase in the level of consumer prices or persistent decline in the purchasing power of money. Exchange Rates: The exchange rate is the price of one currency when traded with another. For Example, Â £1 will approximately buy the following at a given point in time: 1.50 Euros 2.70 Australian Dollars 1.60 US Dollars Impact of changes on WFP: Rising interest rates: Rising Interest Rates will work to the disadvantage of West Ferry Printers. They will have to pay more amount of money on loans and, as a result, their expenditures will increase. Falling interest rates: Falling Interest Rates will benefit West Ferry Printers. It can adopt an aggressive market strategy by reducing the prices of its products and enhance its market share In a situation involving a high rate of inflation, West Ferry Printers will not be able to plan its finances accurately. If the company is left with less money it will not be able to pay its staff decent remuneration for their services. Disputes may occur if workers are unable to secure wage increases to sustain their standard of living. Like any other business, West Ferry printers will be better off if rate of inflation stays within the normal range. West Ferry Printers will have ample time to devise their costing and other plans carefully. Low in...