topic 6 Flashcards
(22 cards)
What are External Influences?
Factors outside the business’s control that affect how it operates (e.g. economy, laws, competitors).
Businesses can adapt to opportunities in the environment, but negative changes can increase costs or reduce sales.
What is Economic Growth?
An increase in a country’s output of goods and services over time.
Higher incomes lead to more spending on goods/services, but it can also lead to inflation or overuse of resources.
What is Inflation?
A general rise in prices over time.
It may allow businesses to raise prices and earn more, but it also increases costs and reduces customer purchasing power.
What is Unemployment?
When people who want to work can’t find a job.
It creates a larger pool of workers, possibly at lower wages, but can lead to lower spending in the economy.
What is an Exchange Rate?
The value of one currency compared to another.
A weaker currency helps exporters, while a stronger currency makes imports cheaper but exports more expensive.
What is an Interest Rate?
The cost of borrowing money or the return on savings.
Lower interest rates encourage investment, while higher rates increase loan costs and reduce spending.
What is Taxation?
Money paid to the government, e.g. income tax, corporation tax, VAT.
Tax revenue helps fund public services, but higher taxes can reduce business profits and customer spending.
What is Government Spending?
Money the government spends on areas like education, transport, and healthcare.
It can boost the economy and support businesses, but may lead to higher taxes or government debt.
What is Legislation?
Laws set by the government that businesses must follow (e.g. safety, employment, environment laws).
It protects workers, consumers, and the environment, but increases business costs due to compliance.
What are Environmental Concerns?
Pressure on businesses to reduce pollution and use resources sustainably.
It encourages innovation and green marketing, but compliance can be expensive.
What are Social Trends?
Changes in society, like lifestyle, values, or demographics.
They can create new markets, but businesses may need to adapt quickly to changing demands.
What are Demographics?
The structure of the population (e.g. age, gender, income levels).
Understanding demographics helps target specific customer groups, but an aging population may reduce labor availability.
What is Ethical Business?
Acting in ways that are morally right (e.g. fair trade, no child labor, treating workers fairly).
It builds a positive image and customer trust, but can increase costs.
What are Pressure Groups?
Organizations that try to influence business or government decisions on issues like the environment.
They can lead businesses to behave more ethically, but may damage reputation if targeted publicly.
What is Globalization?
The growing interconnection of countries through trade, communication, and travel.
It provides access to wider markets, but increases competition and risk of job losses in local industries.
What is a Multinational Company?
A business with operations in more than one country.
It can access new markets and lower production costs, but faces cultural differences and political risks.
What are Imports?
Goods or services bought from another country.
They provide access to a wider variety of products, but can hurt local businesses.
What are Exports?
Goods or services sold to another country.
They increase sales and revenue from global markets, but may be affected by tariffs or trade restrictions.
What is Protectionism?
Government actions to restrict trade (e.g. tariffs, quotas) to protect local industries.
It helps local industries compete, but can increase prices for consumers.
What is Free Trade?
Trade without restrictions like tariffs or quotas.
It increases choice and competition, but may harm local businesses.
What is Exchange Rate Appreciation?
When the value of a currency rises compared to another.
It makes imports cheaper, but exports become more expensive.
What is Exchange Rate Depreciation?
When the value of a currency falls compared to another.
It makes exports cheaper and more competitive abroad, but imports become more expensive.
