Financial influences

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Created by
Renika

Cards (2)

  • → Changes in the financial sector has impacted:
    → Deregulation of the financial sector: has resulted in a more flexible, market-orientated approach leading to greater competition in the financial industry 
    → Changes in interest rates: interest rates dropping during Covid were record low leading to the RBA dropping interest rates further to 0.10%
  • Affects of High/Low Interest Rates on Business:
    High Interest Rates:
    → Reduced consumer spending due to increased loan costs reducing disposable incomes 
    → Difficulty obtaining loans due to higher costs leading to longer debt repayment and increase financial strain 
    Low Interest Rates:
    → Increased consumer spending due to larger disposable income for products and services 
    → Facilitated business expansion due to less debt freeing up capital for expansion and less risk in investing in expansion