Unit 2 - Influences on Business Flashcards
What are interest rates?
The cost of borrowing and the reward for saving
How do higher interest rates affect borrowing?
Higher interest rates make borrowing expensive, leading to less borrowing by people and businesses
What happens when interest rates are lowered?
Lower interest rates make borrowing cheaper, leading to more borrowing by people and businesses
What is inflation?
When prices rise too fast due to increased demand from spending
What is a self-reinforcing cycle in economics?
When reduced spending leads to lower income, which in turn causes even less spending
What is deflation?
When demand falls and prices decrease
What are ethics in business?
The rules that require a business to operate fairly and honestly
What are modern consumer expectations regarding businesses?
Businesses should treat consumers well and minimize environmental harm
List some environmental concerns modern consumers expect businesses to address.
- Use of single-use materials
- Unnecessary travel
- Waste going to landfill
- Emission of air pollution
- Noise pollution
- Traffic congestion
What is sustainability in business?
Avoiding unnecessary use of materials and energy to prevent damage to the planet
What are the benefits of operating sustainably for businesses?
- Improve reputation
- Ensure long-term operation
What is e-commerce?
The process of doing business online, affecting all markets
What is m-commerce?
Mobile commerce, which is growing rapidly and allows businesses to reach more customers
What role does social media marketing play in business?
It allows businesses to target individuals based on their preferences
How has digital communication impacted business?
It speeds up information exchange and reduces the need for travel
What is SPICED in relation to currency strength?
Strong Pound, Imports Cheaper, Exports Decline
What does WPIDEC stand for?
Weak Pound, Imports Decline, Exports Cheaper
How does globalisation affect businesses?
It makes it cheaper to relocate and allows production and sales anywhere
What is the National Minimum/Living Wage?
The minimum amount a worker can be paid per hour, based on age
What is the purpose of the Equality Act (2010)?
To protect individuals from discrimination in the workplace
What does the Health and Safety at Work Act (1974) establish?
Duties of employers and employees for a safe working environment
What is the Trade Descriptions Act (1968)?
It prevents businesses from misleading customers about products
What is a monopoly in a market?
A market dominated by one seller or producer, occurring if a firm has a market share of 25%
What is a competitive market?
A situation where multiple businesses compete for the same customers
