3.7.5 economic change Flashcards
what is GDP?
gross domestic product - measures the total output of goods and services produced in an economy in a year
why is economic growth important for businesses?
increased profits
rise in living standards
creation of new jobs
lower unemployment
improved business confidence
increased capital investment
technological innovation
what are the four stages of the business cycle?
boom
recession
slump
recovery
what is taxation?
a charge levied by governments to pay for its services
what is direct taxation and what are some examples?
levied on income, wealth and profit.
e.g income tax, national insurance, corporation tax etx
what is indirect taxation and what are some examples?
levied on spending by consumers on goods and services
e.g VAT, duties on alcohol, car tax, betting tax etc
what is an exchange rate?
the price of foreign currency in terms of another currency
strong pound=
imports cheap
exports dear
weak pound=
imports dear
exports cheap
what is fiscal policy?
the management of tax levels and government spending
what is monetary policy?
the management of interest rates and the supply of money
what is globalisation?
worldwide markets in products, capital and labour unrestricted by barriers
benefits of globalisation?
potential to increase revenue and profit
can benefit from economies of scale
free movement of labour
sharing of ideas/skills/technology
drawbacks of globalisation?
increased price competition
new competition from overseas
increased need for investment
increased threat of takeover
