Essay Writing: International Business Trend

Essay Writing Name Institution Essay Writing Businesses are continuously influenced and shaped by consumer incentives together with economic developments. There are constant evolutionary changes in the world of business today. These changes can affect the performance of businesses in positive and negative ways depending on how they respond to them. The 2008 financial crisis and the changes in oil prices are some of the recent trends that shaped businesses to a great extent. 2008 Financial Crisis Financial crisis that began in 2007 was precipitated by development of real estate bubbles, rapid credit growth, abundant liquidity, and low risk premia (Wei, Payne, & Shirley, 2015). What triggered the financial crisis was huge debt owed to banks and amount of money that flowed into the economy as the banks gave out too much money in loans (Mansbach, & Pirro, 2016). The banks used the money to push up house prices and take risks on the financial market. As much money was leant to the property market, housing prices shot up and levels of personal debts increased. Debts owed were rising quicker than income made limiting the abilities of some people to keep up with repayments of loans and these people eventually stop paying loans making banks faced with the possibility of going into bankruptcy causing the financial crisis (Spiegel, 2011). In response, banks refused to lend, lending only when they were sure they will be repaid but at the same time, the people owing had to make repayments. In the end, the amounts being repaid to the banks were greater than the amount of loans the banks were giving out causing money to be drained from the economy. This forced the economy to slow down and prices to increase. As a result, a fall was experienced in wages and prices while the amount of money people had to pay on debts remained constant making the debts to become more expensive making everyone to suffer and causing recession (Srivastava, 2015). The financial crisis never affected the Canadian economy as much as it affected the U.S and the rest of the world but its effects were still significant. Importantly, there was reduction in output and several people lost their jobs as the Canadian economy fell into recession and the Canadian policy makers had to respond with good policies. Fluctuating Oil Prices The prices of oil have been falling and the earnings for companies that previously enjoyed stronger positions have seriously declined. What has caused the oil prices to decline are stronger U.S dollars, oversupply of oil, OPEC, Iran Nuclear Deal and reduction in demand of oil. The U.S dollar is on a 12-year high against the Euro (Baffes et al., 2015). The pressure on commodities has been high because of the strong dollar causing the value of these commodities to fall. Besides, the market has seen an oversupply in oil whereas the demand for oil has been declining, thus creating a surplus. The Iran nuclear deal has also enabled the government to export more oil and the investors fear that it will contribute to the over supply that is now prevalent in the market. Canada is one of the oil exporting countries in the world and the falling oil prices have hurt their economy greatly. To respond to the falling prices, the Canadian central bank has ha...