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Variables	Small Business (Increase)	Investors (Increase)	Small Business (Decrease)	Investors (Decrease)
Interest rate	Overall spending decreases; saving increases due to higher returns on investments from higher bank rates.	Lucrative to save and invest for a higher ROI.	Lower interest rates increases consumer/business consumption and spending.	Investors will increase investments and capital purchases because borrowing costs are cheaper at lower prime rate.
Minimum wage	Labor chooses to work more as cost of leisure rises.	Employers will hire less and invest in capital to reduce labor costs.	Labor prefers to work less and obtains skills for higher wages.	Employers hires more employees and increases service quality.
Tax rate	Small business deductions supports small businesses. Reduces foreign investment.	Investment tax deductions attract investors. Discourages foreign investment.	Lower taxes increase business and individual net income, but may reduce budget for public goods.	May increase foreign investment, but reduces public welfare.
Social benefits	Increases public satisfaction, standard of living, and public spending.	Increases public welfare, reducing demand & dependency on private businesses.	Lowers standard of living & confidence in the community. Reducing public spending.	Creates investment opportunities, attracts investment in the private sector.

Assumption: changes in policies will provide equilibrium in the long run.

Other theories to consider:

• Income Effect
• Substitution Effect
• Liquidity Trap
• Minimum Wage Price Floor Model
• Determinants of Foreign Investment (market size, stability, infrastructure, productivity)
• Demand-side effects of social benefits (increased consumption and economic stability)
• Macroeconomic conditions and investor expectations
• Keynesian Economics