Unit 6 - External in uences on business activity Flashcards

1
Q

Gross Domestic Product (GDP)

A

is the total value of output of goods and services in acountry in one year

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2
Q

Recession

A

is when there is a period of falling GDP

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3
Q

In flation

A

is the increase in the average price level of
goods and services over time

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4
Q

Unemployment

A

exists when the people who are willing and able to work cannot a nd a job

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5
Q

Economic growth

A

is when a country’s GDP increases - more goods and services are produced than in the previous year

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6
Q

Balance of payments records

A

the di erence between
a country’s exports and imports

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7
Q

Real income

A

is the value of income and it falls when prices rise faster than money income

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8
Q

Exports

A

are goods and services sold from one country
to other countries

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9
Q

imports

A

are goods and services bought in by one
country from other countries

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10
Q

Exchange rate

A

is the price of one currency in terms of another

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11
Q

Exchange rate appreciation

A

is the rise in the value of a currency compared with other currencies

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12
Q

Exchange rate depreciation

A

is the fall in value of a currency compared with other currencies

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13
Q

Fiscal policy

A

is any change by the government in tax rates or public sector spending

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14
Q

Direct taxes

A

are paid directly from incomes, eg- income tax or pro ts tax

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15
Q

indirect taxes

A

are added to the prices of goods and taxpayers pay the tax as they purchase the goods, eg- VAT

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16
Q

Disposable income

A

is the level of income a taxpayer has after paying income tax

17
Q

Import tari ff

A

is a tax on an imported product

18
Q

Import quota

A

is a physical limit on the quantity of a
product that can be imported

19
Q

Monetary policy

A

is a change in rates by the
government or central bank

20
Q

Supply-side policies

A

aim to increase supply and make
the economy more e fficient

21
Q

Private costs

A

of an activity are the costs paid for by a
business or the consumer of the product

22
Q

Private benefit s of an activity

A

are the gains to a business or the consumer of the product

23
Q

External costs

A

are costs paid for by the rest of society, other than the business, as a result of business activity

24
Q

External bene fits

A

are the gains to the rest of society, other than the business, as a result of business activity

25
Q

Social cost (Calculation)

A

Social cost = external costs + private costs

26
Q

Social bene t (Calculation)

A

Social bene t = external bene ts + private bene ts

27
Q

Globalization

A

is the term used to describe increases in
worldwide trade and movement of people and capital between countries

28
Q

Free trade agreements

A

exist when countries agree to
trade imports/exports with no barriers such as tari ffs or quotas

29
Q

An import tari ff

A

is a tax placed on imported goods
when they arrive into the country

30
Q

An import quota

A

is a restriction on the quantity of a
product that can be imported

31
Q

Protectionism

A

is when a government protects
domestic businesses from foreign competition using tari ffs and quotas

32
Q

Multinational businesses

A

are those with factories, production or service operations in more than one country