3rd (give name with topics) Flashcards
What is Hot Money
this is foreign investors putting their money in a country’s with high inflation because they will get a greater reward, they will have to turn their money into pounds then there will be a greater demand for the pound
unemployment
where people who are willing to get work however not able to find employment
Economically incactive
not working nor looking for work
Balance of trade / payments
The difference in the value of exports and imports
if exports exceed imports there is a surplus, if Imports exceed exports, there is deficit
Tax
a payment to the government
Direct tax
taxes on income and profits, paid directly by the bearer to the tax collector
indirect taxes
Taxes on expenditure/spending. they are paid to the tax authorities not by the consumer, indirectly by the suppliers
e.g of taxes
income tax inheritance VAT national insurance Duties Stamp duty
Income tax
Tax taken out of persons income (tax brackets)
national insurance
Tax as a contribution to the state pension and treatment under the NHS
VAT
Value after Tax
Added to the price of most goods and services, included in the price.
How do businesses benefit from being VAT registered
Can reclaim VAT on pay on some purchases
corporation Tax
Tax on the profits made by companies
Indirect Tax e.g
VAT
Tobacco/Alcohol/petrol
Stamp duty
Direct Tax e.g.
National insurance
Corporation
Income
Government rasing taxes result
Increasing tax will increase the tax revenue; this should be reinvested into: improving infrastructure, improving public services and reinvesting it into the general public.
Increasing tax on Alcohol result
People will be less likely to Purchase certain types of alcohol e.g. white strong ciders.
Reasons for taxation
Expenditure on public services e.g. education, transport and healthcare
to control economic activity e.g. stamp duty for house prices
to influence expenditure i.e. Alcohol
types of government expenditure
Benefits Debt interests education defence pensions
reasons for government spending money on education
Helps people to get good jobs, earn money to then be taxed to be reinvested
Subsidy
Sum of money given to a business by the government as an incentive to help the government policy e.g. farmers, apprentices, wind farms, rail roads etc.
Monetary policy
Manipulation of the level of demand in the economy using the rate of interest
who controls monetary policy
the MPC monetary policy committee (bank of England)
Reasons for MPC change
- an increase in the rate of interests slows down spending
- a decreases in the rate of interest encourages spending
- a change in the rate of interest usually takes 18 months to take effect
- there is a relationship between the rates of interest and the strength of the pound
Appreciation meaning
Pound strengthening
Fiscal Policy
Economic policy conducted by the government through taxation and public spending
Who controls Fiscal policy
Controlled by the government and led by the Chancellor of the e Exchequer
Fiscal policy key points
- fiscal policy affects the level of demand in a economy
- increased tax will generally lead to less spending
- decreasing tax will generally lead to more spending
Supply side policy
This policy aims to improve the economy’s overall productive capacity
Ways supply side policy is manipulated
- investment in education and training
- reducing welfare benefits
- income tax cuts
- cuts in corporation tax
- removing expensive and unnecessary business regulation
- encouraging business start-ups
Business cycle
expansion / Peak – Recession \ Trough / Expansion / Peak – Recession \ Trough
What type of businesses can succeed during a recession
Accounting services
Discount shops
Pawn shops
What is the link between confidence and investment (boom/recovery)
When confidence is high investment is high & vice versa
Businesses who feel confident that demand for their product/services exists, there will be more investment producing that product/ service for customers to buy
Above target inflation during a Boom
Inflation can go over target during a Boom as more people have disposable income meaning they are buying more. Due to the increased demand Businesses put up prices to increase their profit margins
What unethical practices does some businesses do
Fracking Deforestation pollution habitat destruction faulty products
sustainability
The endurance of resources
Refers to preventing negative impacts from economic systems and production on the earth and its environment
How can businesses become more environmentally friendly, sustainable manner
Using video conference for meetings recycling schemes changing packaging local sustainable suppliers Disposing of chemicals in the correct manner water and energy saving measures
Intellectual property
Intangible property that is the result of creativity i.e. song
Trademark
A company can REGISTER a trademark for its business name, slogans, logos
Items that essentially brand the product or company.
Copyright
Legal protection against copying for authors, composers and artists
Copyright is an automatic right which protects intellectual property meaning NO NEED FOR REGISTRATION
