The economic decisions which are decided can either grow a business into a new path
The economic decisions which are decided can either grow a business into a new path, when they are reaching higher demands, this can have a negative impact on the business, as they may not be able to reach the figures, they need to carry on with the business. Interest rates, are an automatic add on onto money which is borrowed. The amount which is added onto a loan is known as the interest rates. If the interest rates increase, this can have many effects on the business. If a customer has debts, they will be paying more interest now, then they started to pay at the beginning because, they have chosen a longer repayment term. Higher interest rates can also put people off choosing that type of debt however; overdrafts have one of the highest but many people do not realise until they start to pay it off. When Interest rates begin to either increase or decrease, this can impact the way a business runs. If a business produces a product which is a high-profitable, this can have a problem when interest rates rise. This is due to many customers wanted to drawback on non-essentials, when the income they receive will fall, and the cost of products will rise.