The Economic Climate of Business

Question 1

Economy

Answer 1

the state of a country or region in terms of the production and consumption of goods and services and the supply of money. Aka: how good a country or region is at producing and consuming goods and services and the value or amount of money supplied

Question 2

Consumer

Answer 2

Individuals or business that consume or use goods or services

Question 3

Economic climate

Answer 3

The general state of an economy. It usually reflects the state of the jobs market, stock market, or the availability of credit.

Question 4

Interest rates

Answer 4

The cost of borrowing money or the reward of saving money, expressed as a percentage. If you borrow money you have to pay back the full amount + percentage. If you save money you get a certain percentage added on over time. That percentage is the interest rate.

Question 5

Overdraft

Answer 5

A flexible loan that businesses can use, whenever necessary, up to an agreed limit.

Question 6

Consumer spending

Answer 6

Value of goods or services bought by consumers over a time period, usually a month or a year.

Question 7

Income elastic products

Answer 7

Products whose sales are sensitive to changes in consumers’ incomes.

Question 8

Effects of rising interest rates

Answer 8

Less people will be spending money and start saving knowing that they will earn more through passive income

Question 9

Effects of falling interest rates

Answer 9

Less people will save money knowing that that money won’t increase as much, so they start spending more. Borrowing money also becomes slightly cheaper.