TOPIC 3 DONE

Question 1

Name 5 external factors that affect people’s economic well being ?

Answer 1

Inflation
Interest rates
Exchange rates
Unemployment 
Economic growth or recession

Question 2

What does pestle stand for?

Answer 2

Political 
Economic 
Social 
Technological 
Legal
Environmental

Question 3

What are the political factors and how do they affect people?

Answer 3

Regulations- protect customers from unstable providers, this gives people trust in providers and their products.
Consumer protection- stops providers misleading products to people.
Social inclusion and exclusion- individuals who don’t have access to benefits because they have no bank account or fixed address are social excluded.
Financial inclusion and exclusion- same as social exclusion however takes into consideration financial literacy not being able to fill out forms cause they don’t know the meanings of words.

Question 4

What are providers doing to combat social exclusion?

Answer 4

Offering a range of products that are low deposit and low cost
Providing information on products to make it accessible to everyone
Develop financial education resources

Question 5

Interest rates and inflation- economic factors (summary and impact on finances)

Answer 5

Interest rates are the price that banks borrow money at and also what people earn on savings. More expensive to repay loans means it’s harder and less disposable income.
Inflation is having to pay more money for goods and services, this means people may not be able to spend as much on goods.

Question 6

Unemployment- economic factor

Answer 6

Good economy means that demand for goods is high enough to eke unemployment levels low but not high enough that it causes inflation to rise. If inflation is low then the price of goods is not high which means more disposable income can be spread out to last

Question 7

Government spending - economic factor

Answer 7

Money raised by taxation, if tax rises it can have an impact on the amount of money people receive.
Change in taxation can also have an effect on the economy which can have an affect on many things such as borrowing money and the price of borrowing as the economy can cause inflation

Question 8

Exchange rates - economic factor

Answer 8

The stronger the currency in the businesses country the less they have to pay to import goods.