| What does the Economic Climate mean? | -Simply the Situation a Country finds itself in where the Individuals, Businesses, and Governments Wellbeing is Affected - Particularly in Areas of Output, Prices and Employment |
| How can Interest Rates be an Aspect of the Economic Climate?
-Give an Advantage and a Disadvantage if Interest Rates Fell | -Interest Rates will affect Consumers and Businesses
-They can Influence the Options of Saving your Money, or Taking a Loan
-Changes to the Interest will Ultimately affect the Economy
-Low Interest Rates will lead to Businesses Investing and Consumers Spending More, but will have Less People Saving their Money. |
| What would High Interest Rates do to Businesses Directly? | -Loans will become more Expensive - Lowering Rate of Expansion or Competition
-Costs Increase due to Existing Loans, Overdrafts will be Higher
-Business may Save rather then Take Out - Lowering Investment
-Business may Default |
| What would High Interest Rates do to Businesses Indirectly? | -Consumers spend Less - More Expensive to Borrow
-Consumers save More - Less Spending [Does mean More for the Long Term]
-Mortgages, Loans and Credit Cards will Charge Higher - Impacting how much Consumers can Spend
-Non-Essential Goods will see a Drop in Sales - because Consumers can not Afford/need to buy Essential Goods |
| What does Unemployment Mean? What Effects can Unemployment lead to? | -Unemployment means to be Available to Work, but having No Job Currently.
-This leads to the Worker having no Income - Spending Power will Decrease
-Skills of the Unemployment Worker go Down - Need to Retrain in Future
-Unemployment --> Depression --> Little Motivation |
| What Advantages and Disadvantages can High Employment lead to? | A: Incomes High so Spending Power High
A: More Motivation in Worker as Higher Job Security - Productivity
D: Not many Workers left to fit Vacancies - More Time
D: Since Less Potential Workers - Existing Employees may want Increase Wages
D: Staff Turnover can Increase as its more Easier to get a Job Elsewhere - Human Resources have more Costs |
| Consumer Income has Increased. How will this affect:
1. Businesses
2. Employees
3. Suppliers
4. Government | 1. More Sales will be Seen as Consumers are Spending More - as they have the Funds for Such. Price may also Increase
2. Businesses may need more Employees to Match the Demand. Wages may go Up if Shortage of Workers is Present
3. More Consumers --> More Output --> More Raw Materials. Suppliers have more Sales and may Increase Price
4. Amount from Taxation has Increased - More Money put into Public Sectors |
