Influences in the business environment

Influences

in the business environment

EXTERNAL INFLUENCES

Open Ended

What are some examples of factors within the external environment?

Open Ended

What are some examples of factors within the internal environment?

1.1 - ECONOMIC

External Influences

1.1 - Economic

The level of economic activity in an economy is primarily determined by the level of consumer and business spending.

The economic cycle refers to the changes in consumer and business spending over a period of time. It influences:

• the level of employment and investment in an economy

• the profitability of business

• the amount of goods and services produced.

Open Ended

Define 'economy'

An economy is...

a system where governments, businesses, consumers and other relevant associations interact to satisfy the needs of society.

Open Ended

What are the stages of the economic cycle?

Copy down this table and complete is as we answer the following questions.

Multiple Select

the level of unemployment is high during... (select 2)

• an upturn

• a boom

• a downturn

• a recession

Multiple Choice

During an economic upturn spending...

• increases

• decreases

Multiple Choice

During an economic downturn spending...

• increases

• decreases

Open Ended

When would profits likely be lowest?

Multiple Choice

'Some growth in wages' would be characteristic of which economic phase?

• upturn

• boom

• downturn

• recession

Multiple Choice

Interest rates increase during an economic downturn and/or recession.

• True

• False

Open Ended

What is meant by the term 'consumer confidence'?

Multiple Choice

When consumer and business confidence (optimism) is high they are more likely to both borrow and spend money.

• True

• False

1.2 - FINANCIAL

External Influences

Multiple Choice

Deregulation is the government’s removal or reduction in controls and regulations on an industry or sector of the economy or market in order to achieve greater competition.

• True

• False

Financial - deregulation

• Deregulation of the Australian financial sector began in December 1983.

• In effect, the previous systems of government control of credit, interest rates and the exchange rate were reduced.

• Deregulation allowed market forces of supply and demand to determine the price for finance.

• This also allowed international factors to have a greater influence on our money market as foreign financial institutions entered the marketplace.

Open Ended

How would interest rates influence a business' finance?