Business Unit 6 Flashcards
(17 cards)
What are the four main stages of the economic cycle?
The four main stages are: 1) Expansion, 2) Peak, 3) Contraction, 4) Trough.
What is the impact on a business of an increase in inflation?
An increase in inflation can lead to higher costs for materials and wages, reducing profit margins.
What is the impact on businesses of a decrease in employment levels?
A decrease in employment levels can lead to reduced consumer spending and lower demand for products.
What is the impact on businesses of an increase in GDP?
An increase in GDP typically indicates economic growth, leading to higher consumer spending and business expansion.
What is the impact of an increase in interest rates on a business?
An increase in interest rates raises borrowing costs, which can hinder business investment and expansion.
What is the impact on a business of an increase in taxes?
An increase in taxes can reduce a business’s net income and limit its ability to reinvest in growth.
What are Externalities?
Externalities are costs or benefits incurred by third parties who are not directly involved in a transaction.
What are pressure groups?
Pressure groups are organizations that seek to influence public policy and decision-making.
What are ethical issues that may impact a business?
Ethical issues include labor practices, environmental concerns, and corporate governance.
What is Globalisation?
Globalisation is the process of increased interconnectedness and interdependence among countries.
Why does globalization now occur?
Globalization occurs due to advancements in technology, communication, and transportation.
What are two opportunities and two threats of globalization?
Opportunities: 1) Access to new markets, 2) Cost reduction through outsourcing. Threats: 1) Increased competition, 2) Loss of local jobs.
Why do Governments introduce import tariffs and taxes?
Governments introduce tariffs and taxes to protect domestic industries and generate revenue.
What are the benefits of a business becoming a multinational company?
Benefits include access to new markets, diversification of revenue sources, and economies of scale.
What are two benefits and drawbacks of a country hosting multinational companies?
Benefits: 1) Job creation, 2) Increased foreign investment. Drawbacks: 1) Potential exploitation of local resources, 2) Cultural homogenization.
What is the impact of an appreciation of an exchange rate on a business?
An appreciation of an exchange rate can make exports more expensive and imports cheaper, affecting competitiveness.
What is the impact of a depreciation of an exchange rate on a business?
A depreciation of an exchange rate can make exports cheaper and imports more expensive, potentially boosting local sales.
