What are the specific ways in which taxation negatively impacts the financial stability of small-scale businesses?5 answersTaxation negatively impacts the financial stability of small-scale businesses in various ways. Multiple taxation, as highlighted in studies from Nigeria and South Africa, leads to decreased profitability and survival rates of small enterprises. The lack of financial skills and understanding of financial reporting among small business owners and staff further exacerbates the issue. Additionally, the introduction of financial sector taxes can worsen competition conditions, increase the cost of bank credit, and raise prices, affecting the overall financial health of small businesses. These factors collectively contribute to the financial instability of small-scale enterprises, hindering their growth and sustainability in the long run.
How does financial instability affect oppurtunities?5 answersFinancial instability can significantly impact opportunities in various sectors. Studies show that financial instability can lead to an increase in income inequality, affecting the distribution of resources and opportunities within a society. Furthermore, the interaction between financial instability and macroeconomic development can cause serious damage to the overall economy. In the context of global financial instability, emerging economies face challenges such as high debts, vulnerability in the banking system, and uncertainties in capital inflows. Moreover, in specific sectors like the port industry, currency risks due to financial instability can affect decision-making processes and hinder opportunities for growth and development. Addressing financial instability through effective policies and risk management strategies is crucial to mitigate its negative effects on opportunities across different domains.
How does financial instability affect english courses business?5 answersFinancial instability can have adverse effects on the economy, including the English courses business. Asset price bubbles, which can contribute to financial instability, can arise due to the expansion of money and credit. The impact of the global financial crisis on employment difficulties for English majors has been examined, leading to efforts to revise training models and update textbooks. The liberalization of foreign economic relations and globalization processes have increased financial instability, making national economies more vulnerable to crisis shocks. Financial instability is associated with dramatic swings in the price of financial assets, which can affect the efficient allocation of resources. Commercial bank loans to businesses have declined, reducing funds for small businesses and emphasizing the need for financial management skills for small business survival.
How financial instability effect for research paper?5 answersFinancial instability has been the subject of research in several papers. One paper by Park and Kim analyzes the relationship between financial instability and income inequality. They find that an increase in financial instability leads to an increase in income inequality. Another paper by Gil León et al. focuses on the effect of financial instability on the capital structure of firms. They find that signs of financial insolvency, such as lower liquidity levels and consecutive losses, lead to higher levels of leverage in companies. Barra and Zotti examine the relationship between financial stability and economic development within regions of a country. They find that financial stability has a positive effect on local economic development, particularly through the bank's return on average assets. Heebøll-Christensen compares the effects of excess liquidity and credit growth on financial instability. He finds that excess liquidity and credit growth are closely related and contribute to the occurrence of financial crises. Finally, Allen discusses the adverse effects of financial instability on an economy, particularly due to asset price bubbles. He also highlights the role of banking crises, contagion, and financial fragility in causing financial instability.
How does financial instability affect economic growth and development?5 answersFinancial instability has a negative impact on economic growth and development. Factors such as financial crises, bank liquid reserves, and non-performing loans have a detrimental effect on financial stability, financial development, and economic growth. In addition, inflation and government expenditure also have a negative relationship with economic growth. On the other hand, trade openness, capital account openness, foreign direct investment, and research and development have positive impacts on economic growth. The development of the banking system has a negative impact on economic growth, indicating that the allocation of private credit is inefficient. However, the size of stock markets has a positive effect on economic growth. Overall, maintaining financial stability is crucial for sustainable economic development.
What are the historical causes and consequences of financial instability?4 answersFinancial instability has historical causes and consequences. The presence of a big and unregulated financial sector, known as financialisation, leads to financial instability, which in turn causes instability in the real economy. Financial crises, which are a result of financial instability, make recessions more severe and longer-lasting. Disparities in the amounts, terms, and sources of financial resources, referred to as "financial imbalances," also contribute to financial instability. Credit-driven asset price booms and overextension in risk-taking and balance sheets are identified as causes of financial crises. However, financial crises are heterogeneous and hard to categorize. The co-evolution of monetary policy and financial stability has been observed over time, with credit booms and asset price booms showing a weak association with serious financial crises. The dynamics of financial distress are influenced by imperfect information in financial contracts, risk perceptions, incentives, and feedback mechanisms within the financial system and between the financial system and the macro-economy. Policy responses to financial instability should consider these enduring characteristics while adapting to the evolving financial system.