The Economy, Tax & Globalisation

Question 1

What is economic growth?

Answer 1

Period of rising consumer incomes, demand and output.

Question 2

What is demand?

Answer 2

Total amount of products customers want to buy.

Question 3

What is a recession?

Answer 3

Period of falling consumer incomes, demand and output.

Question 4

What is unemployment?

Answer 4

Number of capable workers out of work.

Question 5

What is an interest rate?

Answer 5

• Charge made to people lending money.

- Reward for saving money.

Question 6

What is the Bank of England?

Answer 6

The central bank which is responsible for setting interest rates.

Question 7

What is government spending?

Answer 7

Money spent buy the government to provide services.

Question 8

What is the multiplier effect?

Answer 8

Amount by which an increase in spending on a specific item is multiplied in its effect on total spending in the economy.

Question 9

What is taxation?

Answer 9

Charges made by the government to people and businesses.

Question 10

What is take-home pay?

Answer 10

Amount of income a person receives after deductions.

Question 11

How does the Bank of England change interest rates to control inflation?

Answer 11

• If inflation is too high, interest rates are increased.

- If inflation is too low, interest rates are decreased.

Question 12

What is income tax?

Answer 12

Tax on income.

Question 13

What are national insurance contributions?

Answer 13

Tax on wages/salary.

Question 14

What is corporation tax?

Answer 14

Tax on profits for limited companies.

Question 15

What is VAT?

Answer 15

Tax on spending.

Question 16

What are excise duties?

Answer 16

Special rates on goods such as alcohol and cigarettes.

Question 17

What are business rates?

Answer 17

Tax paid by businesses on property they use.

Question 18

What is globalisation?

Answer 18

Business activities in different countries becoming more connected.

Question 19

What is outsourcing?

Answer 19

A business pays another to do part of its work.

Question 20

What are multi-national companies?

Answer 20

Companies that operate in different countries.

Question 21

What is global branding?

Answer 21

Product becomes a brand name known and sold worldwide.

Question 22

Give six benefits of globalisation for the UK.

Answer 22

• Consumer choice
• Lower prices
• Cheaper labour abroad
• Larger market
• Economies of scale
• More jobs

Question 23

Give three problems of globalisation for the UK.

Answer 23

• Lower profits
• Lower sales
• Business closures

Question 24

What happens when the exchange rate falls?

Answer 24

• Exporters benefit increased profits.

- Importers suffer from an increase in the price of imported goods.

Question 25

What are developed countries?

Answer 25

Countries with strong economies.

Question 26

What are developed economies?

Answer 26

Poorer countries that are starting to grow.

Question 27

What are exports?

Answer 27

Goods and services a country sells to other countries.

Question 28

What are imports?

Answer 28

Goods and services a country buys from other countries.

Question 29

What is innovation?

Answer 29

Developing new products and new ways of making products.

Question 30

What is productivity?

Answer 30

The amount each person produces in a given time period.

Question 31

What is value added?

Answer 31

Difference between cost of raw materials and value of finished product.

Question 32

What is inward investment?

Answer 32

Investment in UK by foreign firms.

Question 33

What is infrastructure?

Answer 33

Provision of roads, railways and services.

Question 34

Give three advantages of using the Euro.

Answer 34

- No exchange costs. - Reduced uncertainty. - Comparing prices.

Question 35

Give five ways the government can help businesses.

Answer 35

- Cut taxes on business profits. - Grants for businesses. - Cuts in income tax to increase productivity. - Education and training. - Improving infrastructure.

Question 36

What is the EU?

Answer 36

Collection of 27 countries in Europe that trade together.

Question 37

What are tariffs?

Answer 37

Taxes on imports making it harder for foreign firms to compete.

Question 38

What are quotas?

Answer 38

Limits on amount of goods that can be imported.

Question 39

What is the social charter?

Answer 39

Measures to protect workers in the EU from unfair working practices.

Question 40

What is the minimum wage?

Answer 40

Guarantees certain wage levels.

Question 41

What is the eurozone?

Answer 41

Countries in the EU that use the Euro.

Question 42

What is the euro?

Answer 42

Currency used by 15 EU countries.

Question 43

Give five benefits of the EU to business.

Answer 43

- Common standards. - Free trade - Freedom of workers - Freedom of movement of services - Grants and subsidies

Question 44

Give three disadvantages of the EU?

Answer 44

- Social charter leads to extra costs. - Minimum wage leads to extra costs. - Environmental standards have to be upheld.

Question 45

Give two advantages of the eurozone.

Answer 45

- Costs savings from currency exchange. | - Most trade occurs in Europe.

Question 46

Give three disadvantages of the eurozone.

Answer 46

- Equipment has to be changed to the Euro. - Re-education has to be undertaken. - Currency can't be changed back.

Question 47

Since you've been using these flashcards for free, please consider making a small donation for the hundreds of hours it took to make them.

Answer 47

http://bit.ly/21T6H3W | Thank you and good luck!