Economic Climate (Unit 2) Flashcards
What is the Economy?
The level of a business activity in a particular region or area.
What is the Economic Climate?
The state of the economy where a business is operating
What is the economic climate for a country?
How well the country is doing in terms of level of employment & income, how high or low interest rates are & whether there is a high or low inflation.
How can a business decide if the economy is good or bad?
The economy is measured in terms of what’s called ‘The Gross Domestic Product (GDP)’
What is a Recessions?
The slowdown in Economic climate activity that are bad news for businesses & consumers.
How can a recession be caused?
Levels of unemployment & a lower consumer spending
How can an International Economic climate affect the business?
If a Business exports its products & there is a recession in the imported country, this can have a big impact to the business sales by the price of the goods.
How can Trade blocks affect the country’s economy?
A country’s business would have to pay more to import & export goods from & to from the trade block groups.
How can Exchange Rate affect the economy of a country?
For businesses that export their products or services, these will be more relatively expensive if the country’s currency is weaker.
How can Legislation affect the business economy?
The business would have to adapt & may increase its cost
What is Inflations?
A sustained ongoing increase in prices for the things we buy & a decrease in worth of our money overtime.
How can Inflation affect the Business economy?
Businesses would have to sell their products for higher prices, that can cause wages to increase & raw materials t cost more.
