global market infleucnes

Question 1

what are the 4 global market influences on a business

Answer 1

economic outlook,
availability of funds,
interest rates

Question 2

what is the acronym for global market influences?

Answer 2

eai

Question 3

what are global market influences

Answer 3

These are uncontrollable influences, businesses must develop strategies to minimise any harmful effects.

Question 4

define economic outlook

Answer 4

the projected changes to the level of economic growth throughout the world

Question 5

what happens when the economic outlook is positive

Answer 5

consumers are more confident –> spend more –> greater demand –> businesses need to increase production –> businesses then need funds to keep up with demand –> borrowing is now easier as investors know there is increased demand so the business can pay its debts

Question 6

what happens if the economic outlook is negative

Answer 6

1. consumers are less confident
   2.less likely to spend
   3.less demand for g/s
2. business don’t have a desire to increase production
3. investors might not lend as they realise demand is less meaning less profits than can pay off debts

Question 7

define availability of funds

Answer 7

the ease to which a business can borrow funds from international financial markets

Question 8

what is transaction exposure

Answer 8

the risk of exchange rates changing after signing a contract

Question 9

define interest rates

Answer 9

payment for borrowing funds as a percentage of the loaned amount