Topics 41-43 (Economy, Legislation & Competition) Flashcards
Impacts of inflation
- Increased costs
- Uncertainty
- Borrowing and lending more expensive
- Less consumption
The effect of rising interest rates on demand
- Reduced demand for mortgages and car loans
- Domestic investment
- Firms postpone investment
- Imports become cheaper
- Exports become more expensive
What are the four stages of the business cycle (the economic cycle) ?
- Boom
- Recession
- Depression
- Recovery
How does consumer legislation affect a business?
- Increased costs
- Needed improvements to quality control
- Dealing with customer complaints
- Changing business practice
What are some examples of employee protection legislation?
- Employee contracts
- Discmimination
- Unfair dismissal
- Equal pay act (1970)
How does employment legislation affect a business?
- Compliance costs
- Changing working practices
- Loss of flexibility
- Penalties (bad PR if gets caught out?)
What are some examples of anti-competitive practices?
- Raising prices to an abnormal level
- Restricting consumer choice
- Raising barriers to entry
- Market sharing
Examples of environmental legislation
- Pollution (water, air & noise)
- Destruction of wildlife habitats
- Traffic congestion
- Resource depletion
Positive impacts of employment legislation
- Level playing field
- Motivated employees
- Improved brand image and reputation
Impacts of environmental legislation
Can be used as a marketing tool. Can both positively or negatively impact their reputation based on how nicely they treat the environment.
Environmentally friendly methods can have low costs
Benefits of competiton legislation
- Easier for new firms to enter the market
- Encourages innovation
- Improves efficiency
- Raises income and employment
Drawbacks of competiton legislation
- Constraints on what firms can do
- Causes delays
- Increased costs
Examples of health and safety legislation
- Providing and maintaining safety equipment
- Ensuring workers have enough space
- Reasonable temperatures and noise levels
- Protection from hazards, violence and bullying
- Adequate breaks for rest
Disadvantages of health and safety legislation
- Training and equipement costs
- Penalties
Advantages of health and safety legislation
- Improves brand image and reputation
- Improves employee motivation
- Improved productivity
