The economy of the United States of America has an effect on the businesses that are operating in the
country. The smaller businesses tend to feel the effect of the economy more that their larger counterparts.
An upswing in the economy is important due to the fact that it makes the businesses to expand as a way of
meeting the increasing demand in the society. On the other hand a down turn in the economy can have a
long term effect on the businesses that are operating in the particular country. A strong economy is
advantageous to the society because of the fact that it enables the businesses that are operating in that
particular country to enjoy greater prosperity. In a stronger economy the disposable income among the
people is high which in turn increases the demand which in turn improves the business activities that are
being carried out in that particular locality. The economy of the United States of America is strong and
stable and that is why many employment positions are being created to ensure that a majority of
individuals in the country are employed. The consumer confidence is also very high, prompting many
people to pump money into various business ventures that will in turn bring profits. Sometimes the
businesses may take advantage of the economy and expand their businesses in a way that is not
sustainable, a situation that may lead to the businesses unable to manage the businesses. The end result
includes massive layoffs and business failure.
There are some cases when the economy of the United States of America was slow in nature especially
during the time of the great depression. During the economic slowdown, various businesses faced a
number of challenges. The consumers were more conscious about their job stability and were keen about
the amount of money that they spend and in so doing the demand for the products and services went
down, a situation that affected the business negatively since the amount of profit went down and they
were forced to close some branches and lay off several workers. The low revenue made by the businesses
made it hard for them to repay their creditors which led to bankruptcy of some firms. The inability to pay
the creditors also affected the long term viability of the business. The economic downturn made the
businesses to face financial struggles hence they could not qualify for loans that would help them in the
expansion hence the business glows at a very low pace. Laying off the employees limits the capacity of
the business to satisfy the clients and in so doing they tend to lose a good number of loyal clients that
were bringing revenue to the company.
However, some businesses tend to thrive in the in slow economies. For instance the companies that
facilitate vehicle repossessions and auctioneers tend to thrive as their number of clients increase due to the
fact that many people are not able to pay their debts. Sometimes the situation in the economy is so tough
to the extent that even the auctioneers cannot get clients for the products that they are selling off despite
the fact that they are selling them off at the lowest price that they could.
Sundararajan, A. (2014). Peer-to-peer businesses and the sharing (collaborative) economy: Overview,
economic effects and regulatory issues. Written testimony for the hearing titled The Power of Connection:
Peer to Peer Businesses.
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in the society especially how the economy affects the businesses. He factor that determine the quality of
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