Government influences on business activity

Question 1

Inflation

Answer 1

Increase of average price level of goods and services over time

Question 2

Unemployment occurs when:

Answer 2

People willing and able to work cannot find a job

Question 3

Economic growth happens when:

Answer 3

GDP increases (more goods and services are produced compared to the previous year)

Question 4

Balance of payments record:

Answer 4

The difference between a country’s exports and imports

Question 5

Real income

Answer 5

The value of income which falls when prices rise faster than money income

Question 6

GDP

Answer 6

Gross Domestic Product
The value of output of goods and services per year

Question 7

Types of business stages

Answer 7

Slump - Expected to find heavy unemployment, low demand and capital utilization
Growth - Upswing of the trade cycle by expanding production and rising consumer expenditure
Recession - Downsizing of trade cycle, decreasing profit and increasing unsold goods
Boom - Expectations are high, profits are high, and prices rise rapidly

Question 8

Exports are:

Answer 8

Goods and services sold from one country to another

Question 9

Imports are:

Answer 9

Goods and services bought from one country to another

Question 10

Exchange rate

Answer 10

Currency of one country in terms of all other countries

Question 11

Exchange rate depreciation

Answer 11

The currency of one country falls in terms of anotehr

Question 12

Monetary policy

Answer 12

The change in interest rates by the government or central bank

Question 13

Industrial tribunal

Answer 13

A legal meeting which considers worker’s complaints