3.7.5 Analysing the external environment - economic change

Question 1

what is growth in terms of a countries markets?

Answer 1

growth refers to when the market is growing and is becoming worth more

Question 2

what is a recession?

Answer 2

recesion refers to when there are 2 consecutive negative quarters where the markets are receeding

Question 3

what is inflation?

Answer 3

the average price increase over a certain time period

Question 4

what is natural wastage?

Answer 4

loss of employees due to retiring and resigning ect

Question 5

what is real wage

Answer 5

real wage is a wage which isnt adjustage to inflation

Question 6

what are exchange rates

Answer 6

exchange rates are how much your currency is worth compared to another currency and it means the aronym SPICED

Question 7

what is monetary policy

Answer 7

change in interast rates and money supply to reach economic objectives

Question 8

what is the fiscal policy

Answer 8

the way that the governement spends money compared to the taxes and budget balance

Question 9

what is the buisness cycle

Answer 9

the buisness cycle is all about the rate of change in the value of eonomic activity. the most common measure is in GDP

Question 10

name the stages of the buisness cycle

Answer 10

1.Expansion
2. peak
3. recesion
4. depression
5. Trough
6. Recovery
7. Expansion

Question 11

what is a boom in the buisness cycle (features of )

Answer 11

High level of consumer spending
buisness confidence
high profit and nvestments
prices and cost also tend to rise faster
unimployment tends to be low

Question 12

what is a recession in the buisness cycle

Answer 12

falling level of consumer spending and confidence meaning lower profits and falling levels of investment
spare capacity increase and ising unemployment

Question 13

what is a slump/depression in the buisness cycle

Answer 13

very weak consumer spending and buisness investment
many buisness failures
rapidly rising unemployment
prices may start falling

Question 14

what is the recovery stage in the business cycle

Answer 14

things start to get better
consumers begin to increase spending
business feel a little more confident and start to invest again
but it takes time for unemployment to stop growing

(Economic recovery)

Question 15

What is direct taxation

Answer 15

levied on income wealth and profit

Question 16

give 4 examples of direct taxation

Answer 16

1. Income Tax
2. National Insurance Contribution
3. Corperation Tax
4. Caption Gain Tax

Question 17

what is indirect taxation

Answer 17

tax on spendng by consumers on goods and services

Question 18

give 2 examples of indirect taxation

Answer 18

VAT
Excise duties on fuel and alchol, car tax , better tax ect

Question 19

what is current spending?

Answer 19

spending on state provided goods and services such as education and health

Question 20

what is capital spending?

Answer 20

infrastructure spending such as spending on new roads hospitals motorwats and prisons

Question 21

what is transfer payments

Answer 21

welfare payments made to benefit recipients such as the state pension and the jobseekers allowance