Chpt 2 part 1 Global Business Enviroment

Question 1

LNGPEST

Also: PESTEL, STEEPLE, PESTELI, DEEPLIST

Answer 1

Local, National, Global, Political, Economic, Social, Technological

Ecological, Legal
Technological, 
Industry Analysis (PESTELI)
Ethical
Demographic
Information (DEEPLIST)

Question 2

Fiscal Policy

Answer 2

Government spending, tax, borrowing

Question 3

Monetary Policy

Answer 3

Interest rates, level of money.

Question 4

Policies to reflate = growth (Monetary Policies)

Answer 4

Lower interest rates
Increase money supply
Quantitative Easing

Question 5

Supply Side Policies

Answer 5

Increase efficiency & aggregate supply (LT growth)
Increases competition (deregulation)
Increase efficiency of labour
Encourage firms to invest

Question 6

What is balance of payments?

Answer 6

Records financial transactions between imports & exports.
Current account = goods/services trade
Financial/Capital account = tracks capital flows in and out

Question 7

Causes of Balance of Payments deficit (current account only) (3)

Answer 7

1) UK goods don’t offer value for money
2) Booming UK economy
3) £ is expensive (higher XR) so cheaper to import