Unit 6 - External in uences on business activity Flashcards
Gross Domestic Product (GDP)
is the total value of output of goods and services in acountry in one year
Recession
is when there is a period of falling GDP
In flation
is the increase in the average price level of
goods and services over time
Unemployment
exists when the people who are willing and able to work cannot a nd a job
Economic growth
is when a country’s GDP increases - more goods and services are produced than in the previous year
Balance of payments records
the di erence between
a country’s exports and imports
Real income
is the value of income and it falls when prices rise faster than money income
Exports
are goods and services sold from one country
to other countries
imports
are goods and services bought in by one
country from other countries
Exchange rate
is the price of one currency in terms of another
Exchange rate appreciation
is the rise in the value of a currency compared with other currencies
Exchange rate depreciation
is the fall in value of a currency compared with other currencies
Fiscal policy
is any change by the government in tax rates or public sector spending
Direct taxes
are paid directly from incomes, eg- income tax or pro ts tax
indirect taxes
are added to the prices of goods and taxpayers pay the tax as they purchase the goods, eg- VAT