Inflation can adversely affect business in a number of ways:
- Accounting and financial problems. .
Significant rates of inflation can cause accounting and financial problems for business. They may experience difficulty in valuing assets and stocks, for example. Such problems can waste valuable management time and make forecasting, comparisons and financial control more onerous.
2. Falling sales. .
Many businesses may experience falling sales during inflationary periods for two broad reasons. Firstly, it may be that saving rises in a time of inflation. We would expect people to spend more of their money when prices are rising to avoid holding an asset (cash), which is falling in value. However, during the mid-1970s, when industrialized nations were experiencing high inflation rates, savings as a proportion of income rose! It is not easy to identify the reason for this, but some economists suggest that people like to hold a relatively high proportion of their assets in a form which can be quickly converted into cash when the future is uncertain. Whatever the reason, if people save more they spend less and business suffer falling sales. The economic model predicts that if savings rose the level of activity in the economy would fall. Clearly, if this happened we would expect businesses to experience difficulty in maintaining their levels of sales.
Businesses may be hit by a reduction in sales during a time of inflation for a second reason. As inflation progresses, it is likely that workersmoney wages (that is, wages unadjusted/ or inflation) will be increased broadly in line with inflation. This may well take a worker into a higher tax bracket and result in a higher percentage of his or her wages being taken as tax. This process, known as fiscal drag, will cause workers to have less money available to spend on firms goods and services. The poverty trap has a similar impact. As money wages rise, the poor may find that they no longer qualify for state benefits to supplement their incomes and at the same time they begin to pay income tax on their earnings. Again, this leaves less disposable income to spend on the output of firms. Finally, it may be that the wages of many groups are not index-linked and so they rise less quickly than the rate of inflation, causing a reduction in spending power and demand for goods and services.
Once again, the economic model can be used to predict that increases in the level of taxation will increase withdrawals, lowering the level of economic activity and depressing firms sales.
2. , - . (, was going - Past Continuous Active to go).
1) Scientists will perhaps learn a great deal about how people lived in the ancient world.
2) Certain soil minerals bring about changes in the size or shape of plants.
3) The explorers have shown that the climate in Antarctica is possible even for untrained men.
4) They never carried the fire to the new place.
, , , , .
1) Are you given books for reading at school?
2) He is laughed at by everyone.
3) The man was followed by a large crowd.
4) When mother came home the dinner had already been cooked.
5) A lot of schools will be built last year.
Passive Voice.
1) I have invited some friends to tea.
2) She has given me an English book.
3) Have you written the letter yet?
4) They have told us a lot of interesting things.
5) The students have written the paper without mistakes.
