6 external influences on business activity

Question 1

What is import tariff

Answer 1

The tax placed on imported goods when they arrive into the country

Question 2

What’s import quota

Answer 2

A restriction on the quantity of products that can be imported

Question 3

Define exchange rate

Answer 3

The price of one currency in terms of another currency

Question 4

What is Protectionism 

Answer 4

When a government protects domestic businesses from foreign competition using tariffs and quotas

Question 5

Define globalization

Answer 5

The increases in worldwide trade and movement of people and capital between countries

Question 6

Define free trade agreements

Answer 6

When countries agreed to trade imports and exports with no barriers such as tariffs and quotas

Question 7

Define Customer boycott 

Answer 7

When customers decide not to buy products from a business that does not act in a socially responsible way

Question 8

Define Pressure groups

Answer 8

Groups of people who act together to try and force businesses or governments to adopt certain policies

Question 9

Define sustainable development

Answer 9

Development which does not put the living standards or future generations at risk

Question 10

Define private cost

Answer 10

The costs paid for by a business or consumer of the product

Question 11

Define private benefits

Answer 11

The gains to a business or consumer of the product

Question 12

Define external cost

Answer 12

Cost paid for by the rest of society other than the business. This result in business activity

Question 13

Define external benefits

Answer 13

The gains to the rest of society other than the business as a result of business activity

Question 14

Define social cost

Answer 14

External cost + private cost

Question 15

Define social benefit

Answer 15

External benefit + private cost

Question 16

Define pressure group

Answer 16

People who want to change businesses or governments decisions by taking action such as organizing consumer boycotts

Question 17

Define social responsibility

Answer 17

When a business decisions benefits the environment for example to protect the environment by reducing pollution by using the latest and greenest production equipment

Question 18

Define exchange rate appreciation

Answer 18

When there is a rise in value of the currency compared with other countries

Question 19

Define currency appreciation

Answer 19

When the value of the currency rises 

Question 20

Define currency depreciation

Answer 20

When the value of the currency falls

Question 21

Define multinational businesses

Answer 21

A business in more than one country

Question 22

Define ethical decisions

Answer 22

When a business or a person does the right thing

Question 23

Define supply side policies

Answer 23

Trying to increase the competitiveness of industries in an economy against those from other countries. (A policy to make the economy more efficient)

Question 24

Define monetary policy

Answer 24

A change in interest rates by the government or Central Bank

Question 25

Define import tariff

Answer 25

A tax on imported product

Question 26

Define import quota

Answer 26

A physical limit on the quantity of a product that can be imported

Question 27

Define fiscal policy

Answer 27

Change by the government and tax rates or public sector spending

Question 28

Define direct taxes

Answer 28

Taxes paid directly from incomes

Question 29

Define indirect taxes

Answer 29

Tax added to prices of goods and taxpayers pay the tax is the purchase the goods for example VAT

Question 30

Define disposable income

Answer 30

The level of income a taxpayer has after paying income tax

Question 31

Define exchange rate depreciation

Answer 31

The fall in the value of a currency compared to other countries

Question 32

Define exports and imports

Answer 32

Exports are goods and services sold from one country to another country Imports are bought in by one country from another country

Question 33

Define recession

Answer 33

When there is a period of falling GDP

Question 34

Define gross domestic product (GDP)

Answer 34

The total value of output of goods and services in a country in 1 year

Question 35

Define inflation

Answer 35

The increase in the average price of goods and services overtime

Question 36

Define unemployment

Answer 36

people who are willing to work cannot find a job

Question 37

Define economic growth

Answer 37

When a country’s GDP increases (More goods and services are produced than last year)

Question 38

Define balance of payments

Answer 38

The difference between a countries exports and imports

Question 39

Define tariff and quota 

Answer 39

Tariff is tax Quota Is restriction