Economic Issues
Gross Domestic
Product (GDP) is the
total value of output of
goods and services in a
country in one year.
Inflation is the
increase in the
average price level
of goods and
services over time.
Recession and Slump
Unemployment is likely to be rising.
Growth and Boom Unemployment is
likely to be falling.
Economic growth is when a country’s
GDP increases – more goods and
services are produced than in the
previous year.
The exchange rate is the price of one
currency in terms of another.
Ways economic growth might affect a business
1. High demand/sales.
2. More difficult to recruit.
3. Employees may ask for higher wages
The balance of payments records the difference
between a country’s exports and imports.
A recession is when there is a period of falling GDP.
Problems Caused by Rising
Inflation
1. Increased costs
2. Higher repayments on
loans
3. Changing consumer
spending habits
Government economic
objectives.
1. Low inflation.
2. Low unemployment.
3. Economic growth
4. Balance of payments
between imports and
exports
Stages of the
business cycle
1. Growth
2. Boom
3. Recession
4. Slump
DD
Increases in GDP are
associated
with growth
and boom periods.
A fall in GDP is
associated with
recession and slump
periods.
Exchange rate
depreciation is the
fall in the value of a
currency compared
with other
currencies.
1. Explain two ways the business cycle in a country is going into the boom stage is likely to affect.
Disposable
income is the
level of
income a
taxpayer has
after paying
income tax.
Fiscal policy is any
change by the
government in tax
rates or public sector.
..spending