2.5.1 Economic Influences Flashcards
What is a business cycle?
A cycle or series of cycles of economic expansion and contraction.
This changes in the levels of economic activity in a country normally featuring alternating periods of growth and slump- there is no set pattern
What is GPD?
Gross domestic product
- value of goods & services produced by the uk within 3 months
What is a Boom?
A boom is when a period is how we describe growth that is very rapid
- Wealth quickly increases
- Business profits leap upwards
- Living standards across the economy make rapid improvements
What is a Recession?
A recessions is when the level of real national output declines over two successive quarters. But often a sharp slowdown in the rate of growth of output, spending and income can feel like a recession.
What is a Slump?
A slump is when the opposite to growth. Profits begin to fall, job losses, fewer jobs are created, less wealth is being earned and tax revenues fall which impact public services.
What is Growth?
A growth is when a period of improving economic circumstances. Business profits are improving, consumer confidence is improving, jobs are being created.
What is the impact of a Boom on businesses?
- Interest rates decrease
- Demand falls
What is the response of a Boom on businesses?
- Increase their investment spending in order to maximise their capacity
What is the impact of a Boom on individuals?
Difficult for companies to attract & employ staff
What is the response of a Boom on individuals?
Offer higher wages to attract quality workers
What is the impact of a Recession on businesses?
- Unemployment levels rise low demand
- Interest rates reduce
- Demand for imported goods will fall
What is the response of a Recession on businesses?
cut jobs
What is the impact of a Recession on individuals?
- Businesses will fall off in the growth of sales
- Costumers will spend less
