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Essay / Research Paper Abstract
This 3-page paper focuses on macreconomic trends and how they impact a fictitious car sales company Big Drive Auto. Bibliography lists 1 source.
Page Count:
3 pages (~225 words per page)
File: D0_MTbigautoa.rtf
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Unformatted sample text from the term paper:
several manufacturers cars and trucks. They sell vehicles, service them and sell parts for repair. The company also does a significant business in motor oil, coolant, and replacement tires.
Management is always scanning the macroeconomic environment for signals that will help them better plan their business. Big Drive has been keeping data on the volume of sales in its
various lines of business over the last ten years. In some cases, like auto and truck sales, it tracks the numbers of units sold. In other cases, it uses constant
dollar sales. Identify decisions made by key organizational stakeholders that are affected by interest rates. The interest rates impact every aspect of this business, from lending money to
potential car-owners and offering credit to those who buy motor oil and tires, to borrowing money to stock more inventory. Those impacted by changes in interest rates are going to
be customers and dealer personnel. If there isnt as much inventory to sell (because of rising interest rates), more employees will be let go. Identify how interest rates affect
the cost of operating the business. The Federal Reserve (Fed) adjusts interest rates to help regulate the supply of money. By raising interest rates, the cost of borrowing money becomes
higher, businesses tend to borrow less, and expansion of employees or capital expenses declines. The opposite is true when the Fed lowers rates - money is cheaper to borrow, businesses
borrow more of it, and will use it for expansion, more inventory and other purposes. Find the current yield curve and interpret the effect of its shape on
decision-making within the organization. The yield curve is the relationship between short-term, medium-term and long-term rates at a given point in time (Wu, 2003). The Federal Reserve controls the short
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