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Description
Flashcards by danny-hudson97, updated more than 1 year ago
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Created by danny-hudson97
over 9 years ago
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| Question | Answer |
| PESTLE Analysis | A framework for assessing the likely impact of the political, economic, social, technological, legal and environmental factors in the external environment of a business. |
| Macroeconomics | The study of the whole economy |
| Microeconomics | The study of the individual parts of the economy |
| Gross Domestic Product (GDP) | The total value of a country's output over the course of a year |
| Gross National Products (GNP) | The total value of a country's output over he course of a year plus net income from abroad. The growth in real GNP per head is the main measure of economic growth. |
| Consumer Durables | Goods that are owned by households, but which are not instantly consumed by them. (e.g. cars, computers, televisions, refrigerators and washing machines). |
| Stock | Raw materials, components, work-in-progress, finished goods. |
| Capital (or invested) Goods | Items that are purchased by firms because they help them to produce goods. |
| Business (or trade) Cycle | The regular patterns of ups and downs in demand and output within an economy, or of gross domestic product (GPD) growth over time. It is characterised by four main phases: Boom, Recession (downturn) Slump and Recession (upturn). |
| Boom | Period characterised by high levels of consumer demand, business confidence, profits and investment at the same time as rising costs, increasing prices and full capacity. |
| Recession | Period characterised by falling levels of consumer demand, output, profit and business confidence, little investment, spare capital and rising levels of unemployment. |
| Slump | Period characterised by very low levels of consumer demand, investment and business confidence, an increasing number of businesses failing and high unemployment |
| Recovery | Period characterised by slowly rising levels of consumer demand, rising investments, patchy but increasing business confidence and falling levels of unemployment |
| Interest Rates | The cost of borrowing money and the return for lending the money. They also measure opportunity costs, to both individuals and firms, of spending money rather than saving it and receiving interest |
| Exchange Rates | The price of one country's currency in terms of another |
| Flexibility/Freely/Fluctuating Exchange Rates | The demand for, and the supply of, the currency determine the exchange rate |
| Field Exchange Rates | The Government decides to fix the value of its currency permanently in relation to other countries |
| Inflation | An increase in the general level of prices within an economy. Inflation also means that there is a fall in the purchasing power of money |
| Deflation | A decrease in the general level of prices within an economy or a rise in the purchasing power of money. |
| Cost Push Inflation | This occurs when there is an increase in the costs of production (including wages, raw materials, fuel, taxation and interest rates) that forces firms to increase their prices in order to protect their profit margins |
| Demand Pull Inflation | The process by which prices rise because there is excess demand in the economy |
| Inflation expectations | Views about what will happen to the rates of inflation in the future |
| Hyperinflation | A situation where the value of money decrease so fast that people lose confidence in it |
| Unemployment | The number of jobless people who want to work, are available to work, and are actively seeking employment. |
| Structural Unemployment | Long term unemployment resulting from a change in demand, supply or technology in the economy, which produces a fundamental decline in an industry. |
| Cyclical Unemployment | Unemployment resulting from an economic down turn or recession in the business cycle |
| Globalisation | The process enabling financial and investment markets to operate internationally largely as a result of deregulation and improved communications |
| International Competitiveness | The ability of firms to sell their products successfully both abroad in export markets and at home in competition against imports |
| Emerging Markets | An international area that has the potential to grow and develop in terms of productive capacity, market opportunities and competitive advantage |
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