The government and the UK's economy Flashcards

Question

In the case study, what is the interest rate predicted to be in 2018

Answer 1

People's spending power has decreased if wages don't increase too People would choose to cut back on the non-essentials, such as toys

Answer 2

Other businesses use it as a guideline and follow

Answer 3

Loans would become more expensive This may prevent them borrowing to expand Customers don't have as much money because it is more expensive to use credit cards and their mortgages may have increased

Answer 4

They want a loan and it may become more expensive for them to do it if interest rates rise

Answer 5

As the economy moves into a boom, people will have more money to spend Demand increases Demand curve moves right Prices increase (inflation) Interest rate increases so people's income falls Demand will fall and then inflation will fall

Answer 6

``` Confidence: optimistic Spending: high (high borrowing, low saving) Income: high Unemployment: low Inflation: high Investment: high (firms expanding) ```

Answer 7

``` Confidence: falling Spending: falling (less borrowing, more saving) Income: falling Unemployment: rising Inflation: falling Investment: only essential investment ```

Answer 8

``` Confidence: pessimistic Spending: low, must pay off debts instead Income: low Unemployment: high Inflation: low Investment: none ```

Answer 9

``` Confidence: rising Spending: increasing Income: rising Unemployment: falling Inflation: stable, slight rise Investment: only essential ```

Answer 10

2008: economic conditions difficult -> recession begins 2011: 14,000 out of 80,000 were unemployed, incomes fell 8% on average -> slump 2014: some growth in business activity -> recovery 2018: over 7,00 jobs created -> recovery 2022: predicted boom

Answer 11

Businesses in different countries become interconnected through trade and labour movement

Answer 12

Larger target markets for businesses More employment opportunities with cheaper foreign labour and production costs More competition leads to lower prices of a wider range of products

Answer 13

Greater competition = lower prices = less profit May lead to lower sales May lead to unemployment in UK if moves abroad

Answer 14

Leads to countries specialising in what they are good at to trade with other countries e.g. UK specialises in financial and service sector

Answer 15

They wish to produce in China and sell to EU 30% exported to EU countries 70% exported to UK

Answer 16

40% of stock from EU countries 30% from non EU 30% from UK Exports to countries such as NZ and USA

Answer 17

28 member states with an agreement of free movement of goods and labour between them There are agreed tariffs with outside countries Single currency, EU parliament and legislation

Answer 18

May lead to tariffs - imports 40% of stock from EU | Could impact on plan to sell overseas

Answer 19

May lose customers from EU countries who but 30% of products

Answer 20

A tax imposed by governments on goods and services imported from other countries

Answer 21

The value of your money against another

Answer 22

A good or service brought into one country from another

Answer 23

A good or service produced in one country and shipped to another

Answer 24

``` S - strong P - pound I - imports C - cheap E - exports D - dear ```

Answer 25

The value of the pound increasing against other currencies Exports become more expensive Imports become cheaper

Answer 26

The value of the pound decreases against other currencies Exports are cheaper Imports are more expensive

Answer 27

So people can buy more goods and it can build up its industry

Answer 28

Imports are more expensive, which has negative impacts for Tom's Toys who import 40% of stock from the EU

Answer 29

Those that improve the supply side of the economy

The government and the UK's economy Flashcards

(55 cards)