3.7.5 economic change Flashcards

analysing the external environment to assess opportunities and threats : economic change

1
Q

What is the economy?

A

a circular flow of income via the production and consumption of goods and services

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2
Q

What are Indirect taxes?

A

Indirect taxes are taxes on expenditure (e.g. VAT). They are paid to the tax authorities, not by the consumer, but indirectly by the suppliers of the goods or services

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3
Q

What are direct taxes?

A

Direct taxes are taxes on income, profits and wealth, paid directly by the bearer to the tax authorities.

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4
Q

What is GDP?

A

Gross Domestic Product is the value of the goods and services produced in the economy

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5
Q

How many months does GDP measure to?

A

the three previous months

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6
Q

What qualifies the economy for a recession

A

two consecutive months of economic downturn

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7
Q

what does an increase in tax mean for a business?

A

costs will increase which reduced profiability

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8
Q

is the % of VAT goes up, what can a business do?

A

pass this cost onto the customer (will make product more expensive) or absorb the cost (will reduce profit margins)

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9
Q

what is VAT now?

A

20%

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10
Q

What taxes do sole traders have to pay?

A

Income tax
VAT (if earning above £82,000)
Business rates (if in offices)
National Insurance (if got employees)

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11
Q

What are the types of business tax?

A

corporation tax
capital gains tax
VAT

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12
Q

What are excise duties?

A

paid by customers on products which are considered to have negative effects on society. e.g tobacco and beer

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13
Q

What are exchange rates?

A

the price of one currency in exchange for another

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14
Q

What does appreciation mean?

A

a rise in the pound against other countries. the pound can buy MORE of a foreign currency

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15
Q

SPICED

A

strong
pound
=
imports
cheap
exports
dear

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16
Q

WPIDEC

A

weak
pound
=
imports
dearer
exports
cheaper

17
Q

depreciation

A

when the value of the £ falls

18
Q
A