STEEPLE/PESTELE Flashcards
What does STEEPLE stand for?
Social Technological Envronmental Economic Political Legal Ethical
What is the European Union?
The economic and political union of most European countries aimed at reducing trade barriers and harmonizing economic policy
What is the Euro Zone?
A group of European countries who have adopted the Euro as their currency
What are the key policies of the EU?
Laws must be followed by all countries
Freedom of movement to all EU citizens
Freedom of trade in the single market
What are some reasons to leave the EU?
UK is EUs biggest export - will want to be trade partners
UK will have freedom from EU Law
Won’t have to pay an admission fee
What are some reasons for not leaving the EU?
The UK will lose access to the single market
There will be a restriction in movement of people
What are some political factor which could affect businesses?
Brexit EU The competitive markets authority Privatisation Minimum wage
What social factors could affect a business?
Demographic change Change is social habits Change in employment habits Change in role of women Changing attitude to work Education required for longer
What is ethics?
It is the judgment about whether something is morally right or wrong
What are some examples of ethical considerations?
Selling arms to countries at war
Placing high prices on medicine
Use of child labour to allow family to live
Bosses to earn huge bonuses despite poor performance
What are the different types of pollution?
Air pollution - Industrial processes
Water pollution - Plastics and chemical waste
Land pollution - Deforestation
Noise pollution - Motorways and airports
Congestion - Petrol and land used for roads
Sustainability is …
preventing the negative impacts of economic activities on Earth and its environment
What are some government measures to protect the environment?
Sustainable development strategy Climate change levy The carbon trust Carbon trust standard Congestion charge Alternative energy sources
What is the Climate Change Levy?
A tax on the use of energy in industry and commerce
What is the Carbon Trust?
A government body which offers advice to businesses on reducing carbon emissions
What is the Carbon Trust Standard?
A kitemark that shows a business has reduced its carbon footprint
How can a business act sustainably?
Recycling schemes Disposing of chemicals correctly Water and energy saving Paperless systems Using alternative energy sources
What is Gross Domestic Product (GDP)?
The total value of output produced by an economy in a year
Economic growth is …
the annual percentage change of GDP
A recession is …
when the is negative economic growth for two consecutive quarters/periods
How can a business facilitate economic growth?
Invest in human capital - training
Invest in physical capital - better machines
How can the government facilitate economic growth?
Encourage investment
Invest in infrastructure
Improve human capital - better education
What does economic growth cause?
Higher standards of living
What are standards of living?
The amounts of goods and services a person can buy with their income in a year
What is inflation?
The persistent general tendency for the average price in the economy to rise
What is the consumer price index (CPI)?
A measure that examines the weighted value of an average basket of goods/services
What is the effect of inflation on exports?
It makes export less competitive as it raises their price for the foreign countries
What is the effect of inflation on investments?
As it becomes more expensive for foreign countries to invest
Why does inflation cause uncertainty?
Because it makes it difficult to calculate the profits from investments
What are exchange rates?
The value of one currency in terms of another
If the pound increases can you buy more or less of foreign currencies?
More
What does SPICED (Hint: Exchange rates)
Strong Pound Imports Cheap Exports Deer Invert it for a weak pound
How can you tell if something is an import?
If the money is leaving the country
How can you tell if something is an export?
If the money is entering the country
Why might a currency weaken?
Less demand for the currency due to low-interest rates and uncertain foreign investment
Why might a currency strengthen?
Higher demand due to high interest rates and foreign investment
What are the short-term solutions to combating fluctuating exchange rates?
Do nothing - accept lower mark up
Cut overheads
What are the long-term solutions to combating fluctuating exchange rates?
Change to domestic suppliers
Increase prices
Focus on exports`
Interest rates are …
the reward for saving and the cost of borrowing expressed as a percent of the original amount
Who set the interest rates in the UK?
The Monetary Policy Committee (MPC) which are part of the Bank of England
What is the relationship between interest rates and inflation?
Increase in interest rate reduces spending and therefore demand which causes a decrease in inflation as prices fall to meet demand
What is the relationship between interest rates and exchange rates?
If interest rates are high the pound will be strong as the will be high demand from increased foreign investment
What is unemployment?
When people who are willing and able to find a job are not able to find employment
How does GDP, employment and standard of living link together?
As employment rises there are more people in work producing goods and services which increases GDP. This leads to an increase in GDP per capita so each person is spending more so standard of living increases
What is the balance of payments/trade?
The difference between the value of imports and exports
A trade deficit is…
When the value of imports exceeds the value of exports
A trade surplus is?
When the value of exports exceeds the value of imports
What is a indirect tax?
Taxes on expenditure paid to the tax authority by the supplier not the consumer
What is a direct tax?
These are taxes on income, profits and wealth paid by the bearer to the tax authorities
What is income tax?
A tax taken out of a persons income
What is national insurance?
A tax paid as contribution to the NHS and pensions paid by employee and employer
What are some examples of direct tax?
National insurance
Income tax
Corperation tax
What are some examples of indirect tax?
VAT
Tabacco/alcohol/petrol tax
What are the main purposes of taxation?
Generate revenue for the government
Control economic activity - stamp duty for house prices
Influence expenditure on certain items
What is a subsidy?
Payments form the government to suppliers to reduce costs
What are some legal factors?
Contract law - contracts must be upheld
Sales of goods act - satisfactory quality
Weights and measures act - must be accurate
Data protection act - only for fair use
National minimum wage
Health and safety act
Smoking in the workplace
What are the advantages of technological improvement?
Increased efficiency Communication easier Reduced cost - long run Remote working Reduce physical storage space Employees learn a new skill - motivation
What are the disadvantages of technological improvement?
High innital cost Redundancies Might need specilists to run Staff training Decreased motivation as workers resist change
