Business cycle

The business cycle tracks the size of the economy as it increases and decreases and goes through four phases – growth, boom decline and slump

Economy

Everything which is produced and consumed within a country

Globalisation

Increased interconnectedness and worldwide movement of goods, services, capital and people

Government Spending

Government investment on infrastructure or spending on welfare payments

Gross Domestic Product

Gross Domestic Product measures the size of the economy. Calculated by adding up the value of all the goods and services produced in one country in on year

Inflation

Prices and salaries rise so the value of money – what you can buy - decreases

Quotas

A limit on imports

Recession

Economy is decreasing in size

Business ethics

“Doing the right thing”. Basing business decisions on what is morally right

External benefits

The positive impact of business activity which doesn’t benefit the business but positively affects the rest of society

External costs

The costs of business activity which aren’t paid by the business but by society

Multinational corporations (MNC)

Businesses that sell goods/services or have production in more than one country

Pressure Groups

Group that tries to influence business or consumer activity in the interest of a particular cause

Repatriating profits

Taking profits earned in a foreign market and transferring to the home country of the business

Sustainable development

Achieving development (growth) without negatively impacting the environment

Currency appreciation

Value of a currency rises

Currency depreciation

Value of a currency falls

Exchange rate

The price of one currency for another, for example 1 euro = $2

Interest Rates

The cost of borrowing money. Lower interest rates means higher spending and greater economic activity

Tariffs

A tax on imports