U1 AOS3/KK2: Economic conditions

Question 1

economic conditions

Answer 1

• refers to current state of our economy
• performance of the economy is measured by GPD (Gross Domestic Product)
• GDP the total market value of finishes goods/services produced in country over a specific time

Question 2

TYPES OF ECONOMIC CONDITIONS
economic conditions

1. Interest RATES

Answer 2

• how much you have to pay back the privilege of borrowing money (%)

eg. 1. business loan 2. overdraft facility 3. company credit card

Question 3

TYPES OF ECONOMIC CONDITIONS
economic conditions

1. Interest RATES

IF INTEREST RATES ARE HIGH WHAT WILL HAPPEN TO THE NUMBER OF PEOPLE APPLYING FOR A LOAN?

Answer 3

HIGH = save
LOW = spend

Question 4

TYPES OF ECONOMIC CONDITIONS
economic conditions

2. Tax RATES

Answer 4

• percentage of money earned that must be payed to GOV

eg. 1. Business tax - GST 2. Personal Income tax

Question 5

TYPES OF ECONOMIC CONDITIONS
economic conditions

3. Business and consumer confidence

Answer 5

HIGH` confidence = means economy performing well, consumers feel financially secure therefore increase the levels of spending

LOW confidence = means economy performing badly, consumers feel financially insecure (eg. of losing job) therefore decreasing the levels of spending