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30 October 2013

How Aspects of the Economy Effect Aggregate Demand

There are a wide variety of economic issues that have a positive effect upon the demand and supply of aggregates. This increase in demand inevitably provides smaller businesses with the increase in their income that they need in order to weather the recession and avoid declaring bankruptcy. Here are just a few of the economic situations that affect the trade and distribution of aggregates.


A Decrease in Interest Rates

Low interest rates are extremely useful when it comes to the profit that small businesses make through trading with larger businesses or consumers. When interest rates are at a low consumers and larger companies tend to trade more and buy goods in much larger quantities as it costs considerably less for them to borrow money and it also costs significantly less for the businesses to purchase and stock aggregates.


Tax Reductions

If you reduce the amount of tax that the population has to pay they will have an increase in the amount of money available to them as a result. If the population is spending a larger amount of money there will also be an increase in the average amount of money that is spent on aggregates – this means that a reduction in taxes would lead to a direct improvement in the amount of many that is spent on aggregates.


Government Involvement & Spending

If the government decide that they are able to spend a larger portion of their budget on raw materials and construction there is going to be a larger demand on companies to provide aggregates. This decision usually occurs when the state of the economy is beginning to improve so the government have a larger supply of financial resources which they can spend in the private sector.


International Investments

If there is a development in the amount of foreign investments that have been put into a company or there is a rise in the aggregate demand from overseas there is going to be a surge in the prices of aggregates. This is a direct result of the demand that has been placed upon the raw materials. The increase in the demand of aggregates from abroad is unlikely to end abruptly and so the aggregates become more valuable meaning that small businesses will charge more money to supply others which enables them to turn over a small profit.


Aside from the economy there are many other factors that can affect the general demand that is placed upon raw materials and companies that sell aggregates. However, we have recently seen a decrease in the amount of companies that sell decorative aggregates. This is largely due to the fact that the majority of construction businesses do not provide their customers with the finest quality aggregates, and so the aggregates that they do supply are not suitable for use within the home or garden.


For the finest quality products and expert advice you can get in touch with us here at Aggregate Shop – we’d be happy to help you with any enquiries that you may have.

Category: News
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posted by Aggregate Shop at 15:52

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