How Factors Can Cause Changes In Economic Activity
Examine how factors can cause changes in economic activity
Economics activity is the production, distributions, exchange and consumptions of goods and services. Businesses and consumers can cause it to increased and decreased, when it increases it means that the value and amount of goods and services are increasing as well, many factors can change how the economic activity for example interest rates, consumer spending and many more.
Interests rates is one of the main factors that cause changes to the economic activity it shows if the economy has enough money or not, a interest rate is a proportion of loan that cause change to amount of money that has to be paid back to the loaner for example for Commonwealth bank has a interest rate of 2.35 precent per year. This can affect how much money will the consumer borrow, how much they …show more content…
This can also increase the cost of mortgage interest leading households to save more rather spending. Most customers would Change their buying and spending habits, as goods and services prices will change depending how the interest rates flow. But if the interest rates are low, households can borrow more money to invest on property or goods and services
Not only Interest rate have an effect on daily consumers but also to businesses, if the interest rates increases. If they will choose not to borrow money, then the value and amount of goods and services will gradually decrease therefore making more consumers to purchase their products leading to high profits to the firms, on the other hand if a business choses to borrow money then their products will increase in value leading people not wanting to buy their products making less profit can forcing unemployment to
Economics activity is the production, distributions, exchange and consumptions of goods and services. Businesses and consumers can cause it to increased and decreased, when it increases it means that the value and amount of goods and services are increasing as well, many factors can change how the economic activity for example interest rates, consumer spending and many more.
Interests rates is one of the main factors that cause changes to the economic activity it shows if the economy has enough money or not, a interest rate is a proportion of loan that cause change to amount of money that has to be paid back to the loaner for example for Commonwealth bank has a interest rate of 2.35 precent per year. This can affect how much money will the consumer borrow, how much they …show more content…
This can also increase the cost of mortgage interest leading households to save more rather spending. Most customers would Change their buying and spending habits, as goods and services prices will change depending how the interest rates flow. But if the interest rates are low, households can borrow more money to invest on property or goods and services
Not only Interest rate have an effect on daily consumers but also to businesses, if the interest rates increases. If they will choose not to borrow money, then the value and amount of goods and services will gradually decrease therefore making more consumers to purchase their products leading to high profits to the firms, on the other hand if a business choses to borrow money then their products will increase in value leading people not wanting to buy their products making less profit can forcing unemployment to