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GCSE Business Studies > 2.3 The Economy and Business > Flashcards

2.3 The Economy and Business Flashcards

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1
Q

What does it mean if someone is unemployeed?

A

Someone without a job but is actively seeking work

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2
Q

What are the six main ways the economic climate affects a business?

A

Rate of Unemplyment
Changing levels of conumer income
Changes in interest rates
Inflation
Tax rate
Echange rate

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3
Q

What are some reasons people are unemployeed?

A

Fired
Seeking work after finishing education
Really wealthy
Looking after somebody

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4
Q

What is the impact of unemployment on economy!

A

Economy is not making full use of the workers that are availbale

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5
Q

What is the impact of unemployment on a business?

A

Consumers will have less money to spend
Businesses may be able to offer lower pay

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6
Q

What is income?

A

Money that is recieved from or work or investment

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7
Q

How does increase of consumer income affect a business?

A

more the consumer can spend
More demand for goods/services

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8
Q

How does decrease of consumer income affect a business?

A

Less money to spend
Less demand for goods and services

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9
Q

If there is an increase in consumer income, what is the demand like for Luxury items and Basic items?

A

Luxury items: increase in demand
Basic items: Decrease in demand

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10
Q

If there is a decrease in consumer income, what is the demand like for Luxury items and Basic items?

A

Luxury items: decrease in demand
Basic items: increase in demand

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11
Q

What is interest rate?

A

The cost of borrowing money or the amount a saver recieves in interest

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12
Q

How does an increase in interest rate effect a saver?

A

They will reveive more interest on their savings
Encouraged to spend less and save more

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13
Q

How does an increase in interest rate effect a borrower?

A

They will have to pay back more money
Discouraged from borrowing

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14
Q

How does a decrease in interest rate effect a saver?

A

They will receive less interest on their savings
Discouraged to save and encouraged to spend

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15
Q

How does a decrease in interest rate effect a borrower?

A

They will have to pay back less money
Encouraged to borrow more money

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16
Q

What type of business’ would be highly affected by changes in interest rates?

A

Businesses that sell expensive luxury goods

17
Q

What is inflation?

A

A general increase in prices over time

18
Q

What is the impact of inflation on consumer spending and a business’ sales?

A

Lower levels of consumer spending
Fall in sales for a business

19
Q

How would you find rhe percentage price change?

A

Current price - previous price
———————————————- X 100
Previous price

20
Q

What is the impact of inflation on a business overall?

A

Staff may ask for pay rises - higher costs
Fall in demand in UK good as its cheaper overseas

21
Q

What is income tax?

A

A charge on income that has been earned (like wages)

22
Q

What is Coporation tax?

A

A change on a company’s profit

23
Q

What is National Insurance contributions?

A

Charges paid by employers and employees to cover healthcare, pensions and employee benefits

24
Q

What is Value-added tax (VAT)?

A

A charge on sales of goods and services

25
Q

How is Value-added tax (VAT) collected?

A

Collected by the business which passes it on to the government

26
Q

What is council tax?

A

A charge on property based on the property’s value and the number of people in a household

27
Q

An increase in income tax means that workers have to pay more tax on their income.
How does this effect consumers and businesses?

A

Consumers have lss money to spend on goods/services
Businesses will reduce level of investment as they expect to sell less

28
Q

An increase in VAT will mean that consumers have to pay more for the goods and services this tax is charged on.
How does this effect consumers and businesses?

A

Consumers pay higher prices
Inflation occurs which affects business costs

29
Q

What is exchange rate?

A

The price of one currency against another currency

30
Q

What does the term ‘appreciation’ mean in currency?

A

Value of the currency gets stronger

31
Q

What does the term ‘depreciation’ mean in currency?

A

Value of the currency weakens

32
Q

What two acronyms are useful to determine whether imports/exports are good/worse when a pound appreciates/depreciates?

A

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GCSE Business Studies (27 decks)

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