2.5 External influences

Question 1

appreciation of a currency

Answer 1

a rise in the value of a currency

Question 2

base rate

Answer 2

the rate of interest around which a bank structures other interest rates

Question 3

boom

Answer 3

the peak of the economic cycle where GDP is growing at its fastest

Question 4

consumer price index

Answer 4

a common measure of price changes used in the EU

Question 5

deflation

Answer 5

a fall in the general price level, also used to describe a situation where economic growth is falling or negative when inflation is falling

Question 6

depreciation

Answer 6

a fall in the value of a currency

Question 7

downturn

Answer 7

a period in the economic cycle where GDP grows, but more slowly

Question 8

economic, trade/business cycle

Answer 8

regular fluctuations in the level of output in the economy

Question 9

exchange rate

Answer 9

the price of one currency in terms of another

Question 10

fiscal policy

Answer 10

using changes in taxation and government expenditure to manage the economy

Question 11

government expenditure

Answer 11

the amount spent by the government in its provision of public services

Question 12

gross domestic product (GDP)

Answer 12

a common measure of national income, output or employment

Question 13

index linked

Answer 13

the linking of certain payments, such as benefits, to the rate of inflation

Question 14

inflation

Answer 14

a general rise in prices

Question 15

monetary policy

Answer 15

using changes in the interest rate and money supply to manage the economy

Question 16

recession

Answer 16

a less severe form of depression

Question 17

recover/upswing

Answer 17

a period where economic growth begins to increase again after a rececssion

Question 18

slump/depression

Answer 18

the bottom of the economic cycle where GDP starts to fall with significant increases in umemployment

Question 19

taxation

Answer 19

the charges made by government on the activities, earnings and income of businesses and individuals

Question 20

anti-competitive/restrictive practices

Answer 20

attempts by firms to prevent or restrict compitition

Question 21

barriers to entry

Answer 21

obstacles that make it difficult for new firms to enter a market

Question 22

collusion

Answer 22

two or more businesses agreeing to a restrictive practice, such as price fixing

Question 23

contract of employment

Answer 23

a written agreement between an employer and an employee in which each has certain obligations

Question 24

discrimination

Answer 24

favouring one person over another

Question 25

employment tribunal

Answer 25

a court that deals with cases involving disputes between employers and employees

Question 26

national minimum wage

Answer 26

a wage rate set by the government below which it is illegal to pay people at work

Question 27

unfair dismissal

Answer 27

the illegal dismissal of a worker by a business

Question 28

cartel

Answer 28

a group of businesses or countries which join together to agree on pricing and output in a market in an attempt to gain higher profits at the expense of customers

Question 29

colluding

Answer 29

in business, where several businesses or countries make agreement among themselves which benefit them at the expense of either rival businesses or customers

Question 30

market structures

Answer 30

the characteristics of a market, such as the size of the barriers to entry to the market, the number of businesses in the market or whether they produce identical products, which determine the behaviour of businesses within the market