Unit 6 External Influences on Business Activity

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1

Government Spending

government investment on infrastructure or spending on welfare payments

2

Recession

Economy is decreasing in size

3

Inflation

prices and salaries rise so the value of money – what you can - buy decreases.

4

Business cycle

tracks the size of the economy as it increases and decreases and goes through four phases – growth, boom decline and slump

5

Gross Domestic Product (GDP)

measures the size of the economy. Calculated by adding up the value of all the goods and services produced in one country in on year.

6

Economy

All product and services which are produced and consumed within a country

7

Globalisation

Increased interconnectedness worldwide movement of goods, services, capital and people

8

Tariffs

a tax on imports

9

Quota

a limit on imports

10

Multinational corporations (MNC)

businesses that sell goods/services or have production in more than one country

11

Repatriating profits –

taking profits earned in a foreign market and taking it to the home country.

12

Exchange rate

the price of one currency for another – 1 euro = $2

13

Currency appreciation

value of a currency rises

14

Currency depreciation –

value of a currency falls