Current Economic Climate

Question 0

Hyper inflation

Answer 0

Fast inflation, High rates

Question 1

Creeping inflation

Answer 1

Gradual inflation at low rates

Question 2

Inflation

Answer 2

The rise in general prices and reduction in the value of money

Question 3

Monetary policy

Answer 3

Policy on money supply and interest rates
Loose- low interest rates, high supply of money
Tight- high interest rates, low supply of money

Question 4

What does loose monetary policy encourage?

Answer 4

Encourages expenditure which will increase general demand of goods
Interest rates are low, loans are cheap
Incentive to save is reduced

Question 5

Fiscal policy

Answer 5

The governments policy on spending and taxation
Loose- reduce taxes encourages more spending
Tight- increase taxes- spend on country

Question 6

Recession

Answer 6

When a country has two consecutive quarters of negative growth
Due to; rise in unemployment
Falling in customer confidence
Falling in customer spending and investment

Question 7

Cost push inflation

Answer 7

Cost of production goes us, so companies increase their prices

Question 8

Demand pull inflation

Answer 8

Total demand exceeds total supply causes prices to rise

Question 9

Consequences of inflation on business

Answer 9

Uncertainty- costs/revenue
Exports are expensive 
Shoe-leather costs- cost in time searching for best price
Menu costs- updating price lists
Uncertainty- reluctancy lend

Question 10

Consequences of unemployment on a business

Answer 10

People have no money so spend less.
Staff worry about their job security
However easier to recruit

Question 11

Consequences for business in exchange rates

Answer 11

Effects costs of suppliers

Effects imports and exports

Question 12

Spiced

Answer 12

Strong pound imports cheap exports dear

Question 13

Anagram for exchange rates is….

Answer 13

SPICED