the economic climate of business 2.3

Question 1

what is economic climate?

Answer 1

the overall economic conditions in a given country or region

Question 2

what is ‘the economy’

Answer 2

made up of millions of individual consumers and thousands of business and governments. All take decisions on what to buy and produce

Question 3

What are the 5 main pillars of economy

Answer 3

consumers, businesses, resource markets (e.g. labour markets), market for goods and services (e.g. groceries or cars) and local + national governments

Question 4

what are interest rates?

Answer 4

the cost of borrowing money or the reward for saving money (in percentage form)

Question 5

What will happen as a consequence from high/rising interest rates

Answer 5

more repayment will lead to less borrowing/more saving therefore weakening the economic climate

Question 6

What will happen as a consequence from low/falling interest rates

Answer 6

small repayment will lead to more borrowing/less saving therefore improving the economic climate

Question 7

what is level of employment

Answer 7

the percentage of the working age population who have a job

Question 8

what is the corelation between level of employment and consumer spending

Answer 8

rising level of employment + increasing wages = more spending

Question 9

what is consumer spending?

Answer 9

the value of goods and services bought by consumers over a time period