Economic Cycle and Enviroment

Topics: Inflation, Unemployment, Monetary policy Pages: 3 (1099 words) Published: February 27, 2013
I am writing about the economic cycle and the economic environment for McDonalds in this essay. For the economic cycle I will be saying about the factors that can affect the economic cycle such as GDP, interest rates, levels of employment and inflation is what causes the ups and downs of the economic cycle. I will also be talking about the economic environment and the factors of this such as employment, income, inflation, interest rates, productivity and wealth. The economic cycle it the natural fluctuation of the economy between periods of expansion (growth) and contraction (recession). The are some factors that affect the economic cycle such as GDP (gross domestic product), interest rates, levels of employment and inflation. The economic environment is the totality of economic factors, such as employment, income, inflation, interest rates, productivity, and wealth, that influence the buying behaviour of consumers and institutions. GDP (gross domestic product) is an economic factor for McDonalds because it affects the amount of income that McDonalds get from all of their products and goods. Having a high GDP would be good for McDonald’s because it would mean that they are getting a lot of income because they are selling a lot of goods to their customers. This is good because it means that they are earning a good amount of money and that people prefer them to their competitors, however if McDonalds have a low GDP then this means that they are not selling enough products to their customers. This is bad because it means that they could be struggling to sell against their competition. Interest rates are an economic factor for McDonalds because it affects the percentage of a sum of money charged for its use. If McDonalds have a high interest rate then this is bad because it means that they have not managed their money well and they cannot pay their employees their wages on time either, this could result in them leaving McDonalds. With McDonalds having a high...
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