1.5.4 The economy and business

Question 1

What is economic climate?

Answer 1

Refers to the broad performance of an economy

Question 2

How is the economy measured?

Answer 2

Gross Domestic Product (GDP)
Which is an estimate of the total value of goods and services produced in a country

Question 3

What is consumer income?

Answer 3

Amount of money consumers have left to spend after they have paid their taxes and living expenses

Question 4

What are the impacts of low unemployment for a business?

Answer 4

1. More workers are employed
2. People have higher consumer income
3. Consumers spend more money
4. Demand for luxury goods and services increases
5. Businesses produce more luxury goods
6. Businesses hire more staff
7. There is a shortage of quality staff
8. Increased revenue and profit for the businesses
9. The government receives more tax and pays out less benefits

Question 5

What are the impacts of high unemployment for a business?

Answer 5

1. there are not enough jobs for people who are willing to work
2. people have less consumer income
3. Consumers spend less money
4. Demand for inferior goods and services increases
5. Businesses produce more inferior products
6. Businesses stop hiring and begin to make worker redundant
7. there is a surplus of quality staff
8. Decreases revenue and profit for businesses
9. The government receives less tac and pays out more in benefits