Question

For the publicly traded U.S. company Apple (AAPL), analyze the current economic environment of the company and industry. Explain how things such as tax rates, unemployment, and government fiscal policies have affected the company's economic decisions. Explain the role of the Central Bank in the economic environment.

Answer 1

The current economic environment of Apple company: apple is a well known and developed brand of iphones. It has brought big revolution in the telecom industry by developing advanced features Smartphone. It’s a global brand with large number of customers in different countries but now the market of apple is decreasing due to increasing competition in the market. The market share of apple is reducing which will affect its economy negatively. It will reduce the revenue of apple company.

The tax rates, unemployment, and government fiscal policies affects the economic environment of Apple Company and also affects The Increase in tax rates reduces the income of people to spend which affects sale of luxury items such as apple iphone. If government will reduce tax rates apple will increase its marketing strategy to sale more and more goods.

Unemployment is a serious problem as it reduces spending of people and if unemployment is high demand for goods and services will be low in the economy so if the unemployment rate is high apple will reduce its production .

Government makes fiscal policies to control money flow in the economy and maintain stabilization in the economy. So if the fiscal policies have positive impact on the economy it will increase consumption demand of people. The demand for apple will also increase.

Central bank is an apex institution of the country it plays an important role in the economic environment by handling cash flow in the economy. Central bank makes, various monetary policies such as required reserve ratio, sell and purchase of bonds in the open market etc.