Economic Influences On Business Flashcards Preview

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Flashcards in Economic Influences On Business Deck (23)
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1
Q

VAT?

A

Value added tax
Added to products sale price
17.5% currently

2
Q

Income tax?

A

Tax charged directly on personal income

3
Q

Corporation tax?

A

Tax on company profit

4
Q

Council tax?

A

Tax charged in households by local authorities, based on the estimated value of a property and the number of people living in it

5
Q

Road tax?

A

A periodic tax payable on motor vehicles using public roads

6
Q

National insurance?

A

The system of compulsory payments by employees/ employers to provide state assistance for people who are sick, unemployed or retired

7
Q

Stamp duty?

A

Tax on buying houses/ shares in houses

8
Q

Excise duty?

A

Inland tax on the sale of specific goods

9
Q

Inheritance tax?

A

Tax charged in property and money acquired by gift or inheritance

10
Q

Business rates?

A

Tax on business property

11
Q

How are businesses effected by high inflation?

A
  • product prices increase
  • pressure on the employer
  • affected profit margin
12
Q

How is a country’s economy measured?

A
GDP
Currency value 
Rate of inflation 
Imports and exports balance 
Unemployment figures 
Tax rates 
Interest rates 
Amount of debt
13
Q

How is a business effected by high unemployment?

A
  • insecurity in workforce
  • danger of lost skills
  • Recruitment is easier
  • lower consumer spending, less demand
14
Q

How is a business effected by high interest rates?

A
  • customers with debts have less money to spend
  • firms with overdrafts have higher costs
  • customers save more rather than spending
15
Q

How are businesses effected by low interest rates?

A
  • Customers invest less money into savings, they buy more, sales rise
  • firms with overdrafts will have lower costs
16
Q

How is a business effected by strong pound?

A
  • products imported cheaper so lower costs

- for exporting it lowers profits

17
Q

How is business effected by high debt?

A
  • less customer spending
  • harms the ability to create wealth and jobs needed
  • government borrowing increases
  • higher borrowing costs make it more expensive to make financial investments in equipment, stock etc
18
Q

The trade cycle sectors?

A

Boom- high growth causing inflation
Recession - fall in economic output
Recovery - upturn of economic growth

19
Q

Causes of the trade cycle?

A

Interest rate changes
Technological improvements
Political business cycle
Global trade

20
Q

Good taxes should be what?

A

Fair
Low cost of collection
Convenience
Certainty

21
Q

Why does the government impose taxes?

A
  • government spending
  • redistribution incomes
  • demand management
  • correcting market failure
22
Q

Direct tax?

A

One imposed upon an individual or property

23
Q

Indirect tax?

A

Tax imposed upon a transaction eg. VAT