Impact of changes in government policies on business
How do interest rate changes affect business borrowing?
Interest rate changes can affect business borrowing by influencing the cost of borrowing. When interest rates increase, borrowing costs rise, which can reduce business investments and increase the burden of debt. Conversely, lower interest rates can stimulate borrowing and promote business investment.
What are the effects of changes in tax policies on business decisions?
Changes in tax policies can impact business decisions in various ways. Higher taxes may reduce profitability, deter investment, and affect pricing decisions. Lower taxes can incentivize business growth, investment, and innovation. Tax policies can also influence decisions regarding location, structure, financing, and international operations. Businesses need to consider the tax implications and adapt their strategies accordingly.