S1
Chapter 1
The U.S. Business Environment
Questions for Review:
1-4. Why is inflation both good and bad? How does the government try to control it?
Inflation occurs when an economic system experiences widespread price increases. Too much inflation is a bad thing because it means the dollar doesn’t have the same purchasing power it did. Costs of goods rise with inflation, but too much inflation too quickly prevents people from keeping up with the changes in cost. For those who don’t receive income increases quickly enough, inflation reduces the value of the goods those people can buy. For the currently employed, this means they need a salary raise just to keep up with inflation rates for meeting even fixed payments like rent or mortgages. For those on a fixed income, it means having to go without. Slow inflation is a sign of economic growth. When prices are going up, more money is being made, which means more companies need more workers. Reducing the unemployment rate is a sign of a healthy national economy. Slow or moderate inflation is also a good thing because it helps prevent deflation. When prices go down, wages fall, which means that though things might be cheaper, people make less money.
The government tries to control inflation by raising and lowering the interest rates of the nation’s central bank. This had the effect of raising or lowering the relative value of the national currency. It also affected the money available for investment and the running costs of most businesses. So a reduction of interest rates would reduce the value of the currency, make exports cheaper, imports dearer and make businesses more profitable.
Questions for Analysis:
1-5. Identify and describe at least three trends in the external environment that affect college enrollment. Explain how each trend affects colleges and universities.
External trends that are affecting our enrollment are the financial crash, the trend of students going for 1-2 year certifications in a specific
The U.S. Business Environment
Questions for Review:
1-4. Why is inflation both good and bad? How does the government try to control it?
Inflation occurs when an economic system experiences widespread price increases. Too much inflation is a bad thing because it means the dollar doesn’t have the same purchasing power it did. Costs of goods rise with inflation, but too much inflation too quickly prevents people from keeping up with the changes in cost. For those who don’t receive income increases quickly enough, inflation reduces the value of the goods those people can buy. For the currently employed, this means they need a salary raise just to keep up with inflation rates for meeting even fixed payments like rent or mortgages. For those on a fixed income, it means having to go without. Slow inflation is a sign of economic growth. When prices are going up, more money is being made, which means more companies need more workers. Reducing the unemployment rate is a sign of a healthy national economy. Slow or moderate inflation is also a good thing because it helps prevent deflation. When prices go down, wages fall, which means that though things might be cheaper, people make less money.
The government tries to control inflation by raising and lowering the interest rates of the nation’s central bank. This had the effect of raising or lowering the relative value of the national currency. It also affected the money available for investment and the running costs of most businesses. So a reduction of interest rates would reduce the value of the currency, make exports cheaper, imports dearer and make businesses more profitable.
Questions for Analysis:
1-5. Identify and describe at least three trends in the external environment that affect college enrollment. Explain how each trend affects colleges and universities.
External trends that are affecting our enrollment are the financial crash, the trend of students going for 1-2 year certifications in a specific