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Financial innovation
Technological advances have made it easier for lenders to acquire and disseminate information on the creditworthiness of prospective borrowers. Lending organisations are also able to better assess and price risk. Individuals and organisations who initially had no access to credit can qualify. This implies that productive businesses are funded and banks collect their money without default. In this case, individuals and businesses are able to smooth their operations through tough times hence the economy does not face major downturns.
Improved inventory management
IT has reduced instability in inventories. It makes the production system operate in real time. Products are made without stocking. The dynamism of products does not allow inventories. Future levels of demand are predicted accurately thus reducing inventories in the business cycle.
Faimus answered the question on February 3, 2018 at 14:04
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