2.5 Flashcards
Impact of Currency Appreciation
-Exporting businesses - sales fall
-Importing businesses - costs fall
Impact of Currency Depreciation
-Exporting businesses - sales rise
-Importing businesses - costs rise
3 Impacts of Rising Interest Rates
-Increase costs
-Customers less likely to buy on credit
-Exporting overseas could see a fall in demand
3 Impacts of Increase in Taxation
-Revenue may fall
-Operating costs will increase
-Import costs rise
-Business spending + investment affected
(relocate, lose workers, not improving)
4 Impacts of Recession
-High unemployment
-Low confidence for firms
-Low inflation
-Increase in government spending
4 Impacts of Boom
-Decrease in unemployment
-High confidence (risks taken)
-Increasing inflation
-Lower government spending
Definition of Economic Uncertainty
When its difficult to forecast the level of supply and demand in an economy
3 Reasons why Economic Uncertainty can occur
-Fluctuating exchange rates
-Economic growth uncertainty
-Turbulence in price of commodities (like oil or metals)
3 Ways to prepare for Economic Uncertainty
-Building up cash reserves
-Being informed about economic climate
-Take advantage of opportunities
Definition of Legislation
The laws and regulations that are passed by government
Definition of Consumer Protection
Legislation that aims to ensure customers are treated fairly by the companies they interact with
4 Areas Consumer Protection covers
-Safety of products
-Standard and quality of products
-Rights if unhappy with product
-Product information that must be given
Definition of Employee Protection
Legislation that aims to prevent the exploitation of workers
4 Areas Employee Protection covers
-Pay and working conditions
-Equality of employment rights
-Right to belong to union
-Contracts and termination
4 Ways Employee Protection impacts businesses
-Potential penalties and rewards
-Changing working practises
-Higher labour costs
-Compliance costs
Definition of Environmental Proctection
Legislation that aims to hold businesses responsible for their environmental impact
5 Areas Environmental Protection covers
-Pollution
-Destruction of wildlife
-Traffic congestion
-Air quality
-Resource depletion
Definition of Competition Policy
Legislation that aims to protect interests of consumers and businesses by restricting anti-competitive practises
3 Areas Competition Policy covers
-Abuse of market power
-Anti-competitive acquisition activity
-Cartel activity and collusion
Definition of Health and Safety
Legislation that requires a business to protect the physical and mental wellbeing of workers, contractors and consumers
5 Areas Health and Safety covers
-Provision of adequate rest breaks
-Temperature and noise levels
-Provision of safety equipment
-Hygienic, safe, and sanitary conditions
-Preventing stress
5 Ways Health and Safety impacts businesses
-Staff training and supervision
-Changes to working hours and breaks
-Arrangement of manuals and safety documentation
-Maintenance of safety equipment
-Implementing a code of practise
Definition of Competitive Environment
The degree to which a business is affected by its rivals that operate in the same market
