Economy and Its Impact on Businesses

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What does the economy include?

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The economy includes all activities in a country concerned with the manufacturing, distribution, and use of goods and services.

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How does the economic climate affect businesses?

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The economic climate affects businesses by impacting consumer spending, prices, investment decisions, and employment levels.

Front

What are the four main ways the economic climate affects businesses?

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Unemployment, changing levels of consumer income, interest rates, and tax rates.

Front

What is unemployment?

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Unemployment refers to people who are actively seeking employment but are unable to find work.

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Why might someone not be considered unemployed even if they don't have a job?

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Some people choose not to work because they are financially stable or have family responsibilities, while others may be unable to work due to illness.

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How does unemployment affect the economy?

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Unemployment means the economy is not making full use of available workers, slowing economic growth and affecting businesses.

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What is the national level of unemployment?

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The national level of unemployment is given as a percentage, which the government aims to keep as low as possible.

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What are some reasons people become unemployed?

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Reasons include being made redundant, being dismissed from a role, or leaving education.

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What is income?

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Income is money received from work or investment.

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How does consumer income affect spending?

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If consumer incomes increase, spending is likely to increase, helping businesses expand and improving the economy. If incomes fall, spending decreases, leading to higher unemployment and a less stable economy.