2.5.1 ECONOMIC INFLUENCES (BUSINESS CYCLE) Flashcards
1
Q
what is GDP
A
gross domestic product - measures the output in an economy
2
Q
what happens in a boom
A
- higher prices
- higher wages
- higher consumer spending
3
Q
what happens in a recession
A
- low profits
- redundancies
- investments fall
- businesses look for other markets
4
Q
what happens in a downturn
A
- more redundancies
- high unemployment
- low consumer spending
5
Q
what happens in a recovery
A
- increased production
- wage rise
- unemployment declines
- increased consumer spending
6
Q
impacts of a boom/recovery on a business
A
- increased demand
- higher sales and profits
- business confidence is high
- more likely to invest
- reduced unemployment
- encourages new start ups
7
Q
impacts of a recession / slump on a business
A
- decreased demand and production cuts
- sales and profit declines
- less likely to invest
- may lay off employees
-increased in business closures
