BESY: EXTERNAL BUSINESS ENVIRONMENT

Demand shows.....

• how much a business can make available to sell

• how many consumers can afford to buy a product or service

• how high inflation is

• how much goods/services customers will buy at different prices

Supply shows....

• How many people want to buy a product or service

• how many units producers would offer for sale at different prices

• the different prices customers will pay for goods/services

• how much a business has in stock

If selling prices are high.....

• demand goes down

• supply remains constant

• supply goes down

• demand goes up

To make a profit......

• selling price must the same as production costs

• selling price must be lower than expenses

• production costs must be lower than selling price

• production costs must be higher than selling price

globalisation is.....

• when businesses are on the internet

• When businesses have a website

• when businesses are in the EU

• when businesses buy from and sell to many countries, with operations all over the world

GDP stands for....

• Gross domestic product

• Gross deflated price

• General domestic prices

• Green domestic production

Inflation is when.....

• The value of money is increased

• You can buy more goods for less money

• The value of money is decreased

• The government has put interest rates up

Principles of a good tax policy are....

• unfair, certain, convenient, efficient

• expensive, certain, unfair, efficient

• reasonable, equitable, effective

• fair, certain, convenient, efficient

individuals pay the following taxes:

• NI, corporation tax, capital gains tax

• Ni, corporation tax, VAT

• NI, inheritance tax capital gains tax, income tax

• NI, VAT, inheritance tax

If interest rates go up this will.....

• mean that people have more disposable income

• encourage people to spend less so inflation goes up

• encourage people to spend less so inflation goes down

• mean that people will earn less interest on their savings