A2 Part 1 - Analysing the Strategic Position of a Business - Political and Legal Change Flashcards
(42 cards)
What are competition laws?
Laws that promote or seeks to maintain market competition by regulating anti-competitive conduct by companies
What are employment laws?
Laws relating to the rights and responsibilities of workers
What is environmental legislation?
Aim to protect the environment from harmful actions by companies
What is infrastructure?
The basic physical and organisational structures and facilities needed for the operation of a society or enterprise.
What is GDP?
Gross Domestic Product. Measures the value of goods and services produced in an entire economy over a period of time
What is a recession?
Negative growth in 2 consecutive quarters
What is taxation?
Money paid to the government to fund their spending
What is an exchange rate?
The price of buying one currency against another
What is inflation?
A sustained rise in the average level of prices over a period of time
What is the Consumer Price Index?
A technique used by the government where they take a typical basket of goods to measure their price each calendar month. The prices are then compared with the same calendar year in the previous year to give an annual inflation rate.
What is deflation?
Reduction in general level of prices in an economy
What is Fiscal policy?
Means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy
What is Monetary policy?
Bank of England (central bank) controlling the supply of money in a country. It does this by controlling interest rates
What are interest rates?
The price of borrowing money
What is austerity?
Difficult economic conditions created by government measures to reduce public expenditure
What negative effects can high inflation have on businesses?
- Negativley effectws currency exchange rates
- Export slump
- Rising prices in the UK makes goods and services uncompetitive on a global scale
- High inflation in the UK may persuade some businesses to move location to other countries
- Increased unemployment and reduced consumer confidence
What effect can expansionary fiscal policies have on businesses?
Increased government spending means more opportunities for businesses
E.g. new road building programme creates demand for construction companies
Why may higher interest rates be good for a business?
It can often be a good time to borrow money because when the time comes to repay the loans the payment should be less
What is protectionism?
Any attempt to impose restrictions on trade in goods and services. Countries opting to impose restrictions on foreign imports.
What are tariffs?
A tax or duty that raises the price of imported goods and services and causes the level of imports in a country to fall
What are quotas?
Quantitiative limits on the level of imports allowed or a limit of the value of of imports permitted into a country in a given period
What are intellectual property laws?
Rules for securing and enforcing legal rights to inventions, designs and legal works
What are technical barriers to trade?
Increasing product compliance costs and imposing monitoring costs on exports agencies
What are export subsidies?
A payment to encourage domestic production by lowering their costs
