Flashcards in business and the external environment Deck (15):
define market conditions
a broad term which includes all the factors that can affect a market
what is competition?
a key part of the market conditions and includes the number and power of rivals that a firm faces
what are real incomes?
people's incomes adjusted for inflation
define gross domestic product (gdp)
the total value of all good and services produced in an economy- the income of a country
interest rates are...
the cost of borrowing money for firms and consumers
what are demographics?
the size and structure of the population in terms of age, sex, race etc
what's the environment in business?
this deals with the environmental effect of any form of business activity
define fair trade
this a movement which promotes improved trading terms for producers in ledc's to give them higher incomes. it has a labelling system for accredited firms
what are the effects of a change of interest rates on demand and costs?
interest rates are reduced: people are more inclined to borrow as the cost is cheaper and people are more likely to spend
interest rates are increased: people are less inclined to borrow and are likely to save and therefore consumer spending falls
a firm took a £100,000 loan to finance when the interest rate was 5.25% calculate their annual interest payments when the interest rate was increased to 6%
what's the age structure of the uk population?
population is ageing. over 7.85 million people aged over 70 and 2025 is forecasted to have 10.44 million
what is net migration?
numbers entering the uk minus those leaving the country
what's a way that business activity has an effect on the environment?
fuel for deliveries- pollution
killing animals and habitats
what would be a disadvantage of recycling and an advantage of recycling?
recycling costs money, however it would give the business a good brand image which may increase customer sales