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Business-T > 2.1 The External Environment > Flashcards

2.1 The External Environment Flashcards

1
Q

Growth is

A

Is when a period of improving economic circumstance
Businesses profits are improving, consumer confidence is improving, jobs are being created

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2
Q

Boom is

A

When unemployment is very low, andpeople have lots of excess money to spend it on whatever they want

Boom is a rapid and sig growth

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3
Q

Recession is

A

When the level of real national output declined over two successive quarters. But often a sharp slowdown in the rate of growth of output, spending and income can feel like a recession.

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4
Q

Slump is

A

The opposite to growth
Profits begin to fall, job losses, fewer jobs are create, less well as being ended, and tax, revenues fall, which impacts public services

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5
Q

Recovery is

A

The first sign of grow
Businesses, see orders, improving, profits, begin to pick up, employment, prospects, start to improve, but not immediately

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6
Q

Uncertainty is

A

Factors that you can’t control or plan for:
When we don’t know what it’s coming

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7
Q

Oligopoly

A

-these markets are dominated by a small number of firms
-They will use non-priced strategies to complete
-Potentially anti-competitive competition colludes on price

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8
Q

Monopoly

A

-in monopolies, there is only one provider for the services and goods
-They have control over the price and level of output in the market
-These industries are heavily regulated usually to protect consumers

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9
Q

Perfect competition

A
  • these are rare
    -In these markets, you have many competitors offering the same product
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10
Q

Market spectrum is

A

The ability to compete is heavily influenced by the structure of the market in which a business operates
The more competitive market is the harder the task becomes

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11
Q

GDP?

A

Gross domestic products
Value of goods and services produced by the UK businesses within the time period
-Typically three months

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12
Q

What is interest rates

A

The cost of borrowing money or the return for investing money as a % of money borrowed or saved

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13
Q

Inflation

A

The rise in average price of goods and services produced in a country over a period of time

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14
Q

What is demand pull

A

This means spires want to buy more than sellers couldn’t actually produce, so sellers start to put prices up, so demand pulls the price up

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15
Q

What is employee protection legislation

A

Employment law regulates the relationship between an employees employer

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16
Q

Cost push is

A

This means the businesses cost start to rise e.g. oil and sellers need to put prices up to compensate. So cost to the business push the prices high.

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17
Q

What is the fiscal policy?

A

Are the use of government mechanisms in revenue collection ( taxes )
-Raise direct taxes, leading to a reduction in real disposable income
-The government can reduce its own spending on public and merit goods or welfare payment

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18
Q

What is Monetary policy.

A

Are the actions of the central bank to control the size and the rate of growth
-In 1997, gave independence of Bank of England
-Must decide interest rates

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19
Q

Exchange rates are

A

The value of one currency expressed in terms of another

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20
Q

Importers are

A

Businesses that buy goods from overseas

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21
Q

Exporters are

A

Businesses that sell goods, overseas

22
Q

When a currency appreciates the pound…
When a currency depreciates the pound

A

Phone goes up against other currencies
Pound goes down against other currencies (weaker)

23
Q

Impact of stronger pound

A

A stronger pound means that you can buy more currency for the same amount

24
Q

Four. Types of tax

A

Income tax
Corporation tax
Value added tax / VAT
Exercise duties

25
Q

What are the four laws in place to protect consumers?

A

-consumer protection act e.g. Prohibiting misleading price indication
-Unfreighted regulations e.g. Apply a false trade description to any good.
-Data protection act e.g. Prevents consumers details being sold.
-Sale of good act e.g. Fit for purpose.

26
Q

What are basic legal rights of consumers?

A

-not giving, misleading description
-Not unsatisfactory quality
-Not fit for intended purpose

27
Q

What is consumer protection legislation?

A

Is a section of laws of protect individual consumers against unfair, selling practices for goods services and digital content

28
Q

Exercise duties are

A

Specific taxes charged on certain products
Example, alcohol

29
Q

Value added tax is

A

Tax placed on all the goods we buy except food and children’s clothing
This is 20%

30
Q

Corporation tax

A

Businesses pay corporation tax on their profits

31
Q

Income taxes is when

A

Workers pay income tax and national insurance contributions
Both of which affect workers take home pay

32
Q

Statutory rights

A

Legal rights based on laws, passed by Parliament

33
Q

What is contract of employment?

A

The agreement made between the employer and the employee

34
Q

What is employment rights act?

A

State the duties and the rights of employer and employee

35
Q

National minimum wage is

A

-Wright to be paid a certain amount of remuneration of work and performance
-UK workers are entitled to the national minimum wage

36
Q

What is working time directive?

A

-Limit on number of hours
-How long break should be

37
Q

What is the environmental protection act?

A

The act defines the fundamental structure and authorities for waste management and control of emissions into the environment

38
Q

What is the competition act?

A

The act address is two key areas of anti competitiveness behaviour:
-Anti competitive agreement
- abuse of dominant market position

39
Q

What is the health and safety at work act?

A

Employers must protect the health, safety and welfare at work of all the employees, as well as others on their premises
It allows the government to issue regulations, guidance and approved code of practices for employers

40
Q

Have my exchange rate fluctuation affect businesses

A

-The exchange rate will affect what a business can afford
-Materials and goods from other countries will be more expensive

41
Q

The business cycle is

A

A cycle or series of cycles of economic expansion and contraction

42
Q

Monopolistic

A

-in these markets you have many small firms offering different products
-Each firm have a small market
Example, restaurants

43
Q

Why can inflation be a good thing?

A

-Sign the economies growing
Therefore, lack of inflation may be an indicate that economy is weakening

44
Q

Impact on businesses of inflation

A

Lower sales
Suppliers more expensive
Businesses won’t borrow
Won’t expand
May increase staff wages

45
Q

Impact of inflation on customers

A

Spend less
Save More
You may get a higher pay

46
Q

Recession features

A

Interest rates decrease
Demand falls
Businesses, confidence falls
Spare capacity
Develop
Profits start to fall

47
Q

Features of boom

A

Rising inflation
Full capacity
Profit high
Cost rising

48
Q

Impact on businesses if interest rates go up

A

Less sales
Loans, more expensive

49
Q

Impact on businesses if interest rates go down

A

More sales
More profits
Loans, less expensive

50
Q

Growth features

A

Demand increases
Spare capacity is used up first
Businesses confidence starts to increase
Investment increases

51
Q

Slump factors

A

Increased failure of firms
Interest rates reduced
Unemployment high
Low spending

Business-T (11 decks)

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