1. Impact of Businesses on the Community

2. Generation of Wealth
Money required in order to get the business started
Architect example…
Developer pays Architect with “Level 1” money
Architect pays rent with “Level 2” money
Landlord pays utilities with “Level 3” money, and so on
A money trail is created when money changes hands

3. Generation of Jobs
Job market (creation and loss of jobs) is affected by
Consumer demand
Changes in business cycles
Technological improvements
Competition

4. 1) Consumer Demand 2) Business Cycles
Consumers dictate demand and businesses must meet that demand
New products create job opportunities
2) Business Cycles
4 Phases
Trough, Recovery, peak, recession
Can last 8-10 years

6. Trough Recovery Lowest economic activity High unemployment
Profits low, banks reluctant to lend money, bankruptcies increase
Recovery
Demands for goods and services increase
Production increases (and so must jobs)
Economic confidence increases, people spend more money

7. Peak Recession High economic prosperity
People take risks with their money (ventures, real estate, stocks)
Prices of goods/services increase
Recession
Market demands are overestimated and overproduction takes place
Leads to the trough phase
Can lead to depression if severe enough
High unemployment, declining prices, business failure, low economic activity

8. 3) Technological improvements
Increase efficiency of operations
Resulted in job loss and job creation
4) Competition
Higher efficiency can result in lower prices for products/services therefore more competition
Can lead to cutting jobs

9. Generation of Income Also called revenue
Money that a business receives or expects to receive
Sources of income include:
Sale of goods/services
Interest on money in bank accounts
Short-term investments
Businesses generate income for the government through taxes

10. Standard of Living
How a person lives as measured by the kinds and quality of goods and services that person can afford

11. Quality of Life Creation of a positive work environment is key
Adequate income and raises
Benefits packages
Health and social services
Educational and recreational programs
Advancement opportunities
Profit sharing options
Businesses also impact the community
Create wealth, jobs, income, convenience

12. The Changing Community
Movement of businesses affects communities
Businesses moving from downtown to suburbs and the need to fill the downtown empty spaces
Gentrification
Making the “old”, “new” again
Outsourcing
When businesses cannot do the work themselves, they will either subcontract or outsource the work to people that can get the job done

13. Class Work
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1, 2a, 4b, 5a, b