FACTORS AFFECTING: EXAM STUDY Flashcards
1
Q
Factors likely to affect demand
A
- Changes in disposable income
- The price of substitutes & compliments
- Preferences and tastes
- Interest rates
- Changes in population
- Consumer confidence
2
Q
Factors likely to affect supply
A
- Cost of production
- Climatic conditions
- Technological change
- Productivity growth
3
Q
Factors affecting price elasticity of demand
A
- Availability of substitutes
- Degree of necessity
- Time
- Proportion of income
4
Q
Factors affecting price elasticity of supply
A
- Spare capacity
- Production period
- Durability of goods
5
Q
Factors that influence living standards
A
- Access to goods and services
- Environmental quality
- Physical and mental health
- Life expectancy
- Crime rates
- Literacy rates
6
Q
Factors influencing aggregate demand
A
- Changes in general level of prices
- Disposable income
- Interest rates
- Consumer confidence
- Business confidence
- Exchange rate
- Rates of economic growth overseas
7
Q
Factors influencing aggregate supply
A
- Changes in the general level of prices
- Quantity and quality of factors of production
- Cost of production
- Technological change
- Productivity growth
- Exchange rates
- Climatic conditions
8
Q
Consequences of a high inflation rate
A
- Erosion of purchasing power
- Redistributive effects
- Resource misallocation
- Savings and investment
- International competitiveness
9
Q
Consequences of unemployment
A
- Loss of GDP
- Loss of tax revenue
- Reduction in living standards
- Greater income inequality
10
Q
Factors affecting the exchange rate
A
- Relative interest rates
- Demand for exports & imports
- Capital flows
- The terms of trade
- Relative rates of inflation
11
Q
Factors influencing international competitiveness
A
- Productivity
- Production costs
- Availability of natural resources
- Exchange rates
- Relative rates of inflation
