Economic Definitions

Economic words that you will need to define in the exam. Brief revision notes- Very helpful

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  • Created by: Lilly
  • Created on: 11-05-10 17:35
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Business
Economic Definitions
Exchange Rates
-Measures external value of currency e.g. how many yang you can buy with £1
Strong pound = GOOD for importers
BAD for exporters
Weak pound = BAD for importers
GOOD for exporters
Inflation
-Sustained increase in general price level- leading to the fall in the value of money
1) Demand for goods (increase)
2) Price (increase)
3) (increase) wages (increase) costs of materials
4) Prices (increase)
-CPI (Consumer Price Index) is a monthly indication of average price changes to a
particular `basket' of goods-
Interest rates
Set by the bank of England's Monetary Policy Committee, when inflation rises the
(MPC) rises interest rates to discourage people from borrowing.
Unemployment
Those who are able, available and willing to work but who cannot find work despite
actively looking for a job.
-The level of unemployment in a local area is important for an organization as they may
need to compete for scarce resources of labour.

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