Economic Factor

Question 1

What is the economic factor?

Answer 1

Economic factors arise from the state of the economy. an economy is the state of a country or region in terms of the production and consumption of products, and the supply of money.

Question 2

What is the names of the economic cycle?

Answer 2

• Boom
• Recession
• Recovery

Question 3

What does GDP stand for and what is it?

Answer 3

Gross Domestic Product

GDP is a figure that sums up the amount of goods

Question 4

What is the definition of Boom?

Answer 4

This is when GDP and employment levels are very high. Demand for products are high.

Question 5

What is impacts of Boom?

Answer 5

Business can take advantage of demand for products and the wealth of consumers by increasing prices. This will improve profits for the business.

However, a side effect is an increase in inflation. This is a rise in prices over time and often leads to wage rises, so people can afford to keep up with inflation.

Question 6

What is the impact of Recession?

Answer 6

Businesses have to react to a falling demand by making staff redundant, which will cost them redundancy payments and lose them the skills and knowledge of employees.

Question 7

What is the definition of Recession?

Answer 7

This is when GDP and employment levels fall. Demand for products fall.

Question 8

What is the definition of Recovery?

Answer 8

This is when GDP and employments levels begin to rise. Demand for products increase.

Question 9

What is the impact of Recovery?

Answer 9

Businesses can rely on consumers being in a better position to spend money due to rising employment, so therefore sales will increase.

Businesses can develop new products and start to increase prices, which will lead to bigger profits for the business.