2.5- external management

Question 1

What is inflation?

Answer 1

The rate at which the general prices of goods and services rise

Question 2

What is consumer price index (CPI)

Answer 2

Measures the average change over time in the prices paid by consumers for a basket of goods or services

Question 3

How does inflation affect businesses?

Answer 3

-Increased prices= more profit
-Increased prices= decreased customers
-Increased costs
-Increased wages
-Forced to budget
-Decreased growth/investment

Question 4

How does increased costs affect businesses?

Answer 4

-Raw materials costs
-Labour costs
-Operational costs
-Interest rates
-Budgeting

Question 5

How does uncertainty affect businesses in inflation?

Answer 5

-Pricing
-Consumer demand
-Financial planning
-Investment decisions
-Supply chain management