Economic Influences Flashcards
1
Q
Economic influences deal with
A
Changes in the economy as a whole and the effects
2
Q
Factors that affect economic influences
A
The business cycle, changes in inflation, changes in interest rates, changes in exchange rates, changes in taxation and government spending
3
Q
Inflation
A
Measures the % annual rise in the average price level. This increases the cost of living for customers
4
Q
Effects of inflation on business
A
Firms with large loans benefit as the fall of money makes it so they are paying back less, damage profitability
5
Q
Interest rates
A
Price charged by a bank per year for lending money, it affects consumer demand
6
Q
Exchange rates
A
Measures quantity of foreign currency that can be bought with one unit of domestic currency
