2. Influences on Business

Question 1

Legislation

Answer 1

Laws and regulations that businesses must comply with.

Question 2

Ethics

Answer 2

Moral principles that govern how businesses operate.

Question 3

Sustainability

Answer 3

Meeting the needs of the present without compromising the ability of future generations to meet their needs.

Question 4

Globalization

Answer 4

The growing integration of the world’s economies.

Question 5

Exchange Rate

Answer 5

The price of one currency in terms of another.

e.g. How much you pay in £ for Japanese Y (£1=198 Y) it can change daily

Question 6

Inflation

Answer 6

The rate at which prices for goods and services rise.

Question 7

Interest

Answer 7

This is the cost of borrowing or the reward for saving.
e.g. if the interest rate is 5% and you borrow £100, then you have to repay £105. It cost £5 to borrow £100.

The Bank of England sets the interest rates.

Question 8

Unemployment

Answer 8

The number of people who are willing and able to work but are unable to find a job.

Question 9

Give the formula for:
Exchange Rate Conversion

Answer 9

Amount in foreign currency = Amount in home currency × Exchange Rate