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The effect of economic policies on sales

Analysis of the effects of government economic policies could have on the sales of the Escalade. This document is designed to examine the effects of lowering taxes, increasing government spending, and lowering interest rates would have on sales of the escalade. This document will examine each of these variables seperately.

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Forecast for Sales of Escalade during Economic Expansion, Recession, Tax Hikes, Tax Cuts, and Fluctuating Government Spending

Economic expansion involves policies that are intended to stimulate economic activity. These policies could include lowering taxes, increasing government spending, and lowering the interest rate. Each of these stimuli to the economy could have a potential effect on the sale of the Escalade.
Lowering taxes can increase the disposable income a consumer has. Disposable income is personal income less taxes. Consumers can divide this income between consumption(C) and saving(S). Consumers in the United States have a marginal propensity to consume more than they have a marginal propensity to save. Lowering taxes for individuals will provide consumers with a greater ability to purchase the Escalade.
Lowering the interest rate will also have increase sales of the Escalade. Banks usually adjust the prime rate of interest according to the federal fund rate. If the federal fund rate were lowered, interest rates would be lowered, allowing consumers who need a loan to purchase the Escalade at a lower cost. Lowering the interest rate has ...

Solution Summary

Economic expansion involves policies that are intended to stimulate economic activity. These policies could include lowering taxes, increasing government spending, and lowering the interest rate. Each of these stimuli to the economy could have a potential effect on the sale of the Escalade.

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