Unit 6 (External influences on business activity)

Question 1

Inflation

Answer 1

the price increase of goods and services over time

Question 2

Unemployment

Answer 2

the proportion/percentage of the population that are caple of working but unable to find a job

Question 3

Economic growth

Answer 3

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

Question 4

Balance of payments

Answer 4

Exports and imports in from other countries

Question 5

Gross Domestic Product (GDP)

Answer 5

the value of all goods and services produced by a country in a year

Question 6

Monetary Policy

Answer 6

the decisions made by the government regarding monetary variables such as the money supply, exchange rates or interest rate, in order to achieve macroeconomic objectives

Question 7

Interest rates

Answer 7

The reward for saving and the cost for borrowing expressed as a percentage of the money saved or borrowed

Question 8

Recession

Answer 8

A period of falling Gross Domestic Product

Question 9

Exports

Answer 9

goods and services sold from one country to other countries

Question 10

Imports

Answer 10

goods and services bought in by one country from other countries

Question 11

Exchange rate

Answer 11

The price of one currency in terms of another

Question 12

Exchange rate depreciation

Answer 12

the fall of value in a currency compared with other currencies

Question 13

Fiscal Policy

Answer 13

Any change in the government in tax rates or public-sector spending

Question 14

Direct taxes

Answer 14

Paid directly from incomes

Question 15

Indirect tax

Answer 15

Added to the price of goods and taxpayers pay the tax as they purchase the goods

Question 16

Disposable income

Answer 16

the level of income a taxpayer has after paying income tax

Question 17

Import tariff

Answer 17

tax on an imported product

Question 18

Import quota

Answer 18

a physical limit to the quantity of a product that can be imported

Question 19

Exchange rate appreciation

Answer 19

the rise in value of a currency compared to other currencies

Question 20

Social responsibility

Answer 20

when a business decision benefits stakeholders other than shareholders

Question 21

Environment

Answer 21

our natural world

Question 22

Private costs

Answer 22

costs paid for by a business

Question 23

Private benefits

Answer 23

the gains to a business

Question 24

External costs

Answer 24

costs paid for by the rest of society, other than the business

Question 25

External benefits

Answer 25

the gains to the rest of society, other than the business

Question 26

Social costs calculation

Answer 26

external costs + private costs

Question 27

Social benefits calculation

Answer 27

external benefits + private benefits

Question 28

Sustainable development

Answer 28

development which does not put at risk the living standards of future generations

Question 29

Sustainable production methods

Answer 29

those that do minimum damage to the enviroment

Question 30

Pressure group

Answer 30

made up of people who want to change business (or government) decisions and they take action such as organising consumer boycotts

Question 31

Consumer boycotts

Answer 31

when consumers decide not to buy products from businesses that do not act in a socially responsible way

Question 32

Ethical decisions

Answer 32

based on a moral code

Question 33

Globalisation

Answer 33

Describes increases in worldwide trade and movement of people ad capital between countries

Question 34

Free trade agreement

Answer 34

Exist when countries agree to trade imports/exports with no barriers such as tarffis and quotas

Question 35

Protectionism

Answer 35

When a government protects domestic businesses from the foreign competition using tariffs and quotas.

Question 36

Multinational business

Answer 36

a business that has its facilities and other assets in at least one country other than its home country

Question 37

Currency appreciation

Answer 37

This occurs when the value of a currency increases - it buys more of another currency than before

Question 38

Currency depreciation

Answer 38

This occurs when the value of a currency falls - it buys less of another currency than before