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Business and the Economic Environment

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Pass 1 Introduction to the assignment; I am a business advisor employed by the Federation of Master Builders, whose members include self-employed house builders and large construction companies like Barrett Homes or Laings. I have been asked to write a report, predicting conditions in the market for house building and construction for the year ahead (2007), which will be available free to all Federation members to help them with their forward business planning. What is inflation? Inflation is the rate of increase in the level of prices for goods and services, which affects the purchasing value of money. What are Interest Rates? Interest rates influence spending and saving in the economy and the prices we pay for goods and services. Low inflation helps to maintain a stable economy and the value of our money. Interest rates affect inflation in a big way, and this is because interest rates are increased to moderate demand and inflation, and...

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