Economic factors Flashcards
1
Q
What us exchange rate
A
the price of one currency in another currency
2
Q
What does SPICED stand for
A
Stronger pound imports cheaper exports dearer
3
Q
How does weak pound affect importers
A
switch to international suppliers
4
Q
How are exporters effected by exchange rates
A
low prices when currency strong
5
Q
What decisions does a business make when inflation is high
A
increase prices
reduce internal costs
6
Q
What is the effect of inflation on a business
A
price rise
low demand
high cost of production
7
Q
What is the effect of deflation on a business
A
prices fall
sales boost
long term deflation results in low demand
8
Q
what is monetary policy
A
