Chapter 3: Understanding that businesses operate within an external environment

Question 1

Market conditions

Answer 1

Number of features of a market such as the level of sales, the rate at which they are changing and strength of competitors

Question 2

Demand

Answer 2

Indicates the amount of particular goods or services that consumers or organisations want , and can afford , to buy at given prices.

Shows the level of sales that businesses can expect

Question 3

Real incomes

Answer 3

Incomes that are adjusted for the rate of inflation (or increase in prices) to show changes in purchasing power

Question 4

Interest rates

Answer 4

Price of borrowed money

Question 5

Demography

Answer 5

The study of human populations

Question 6

Demographic factors

Answer 6

Factors related to the population

Question 7

Fair trade

Answer 7

A social movement that exists to promote improved trading terms and living conditions for producers of products in less developed countries

Question 8

Sustainable production

Answer 8

When supply of a product does not impose costs in the future generation

For example depleting non-renewable resources