1.1- How does the government affect a person's inc
16-19 year olds: The government pays an Educated Maintenance allowance to encourage pupils from poorer families to continue their education.
Money can be provided for child care for those under 20 who want to continue with their education.
Uni Students: The government subsides course fees and provides low - interest 'student loans'. The rate of interest charged on student loans are low compared to bank loans.
Working age: Benefits to help them find or maintain emplyment. Tax Credits help increase a person's net pay of low- paid workers, so they are better off working than claiming unemplyment benefits.
Job Centre Plus: Provide benefits and services to help more people find work, (Jobseekers Allowance) start their own businesses , help individuals manage low- paid jobs or help with work related accidents/ illness
Pensions: The government pays pensions to help those retired as they will have no income, only if they have paid enough National Insurance Contributions. The government will also pay a variety of other benefits to pensionors on low income (eg. Winter Fuel Payment)
1.3- How do Markets and Businesses operate?
A market exists whenever buyers and sellers come together
The market price is determined by the price the buyer is willing to pay and the price that businesses need to cover their costs. ( Equilibrium Point )
If a good does not sell well then the suppliers will have to lower the price. Eventually, the price will settle at a point where supply equals demand. --> Market Price
Prices change whenever there is a change in supply or demand.
Example: When oil prices are rising, costs for all companies will rise as they need oil for energy, heating and transport. Businesses will have to increase their prices to cover increased production costs.
1.5 The difference between APR and AER
APR: The Annual Percentage Rate is the interest rate published on loans to help compare their true costs.
AER: The Annual Equivilent Rate is a figure quoted in savings advertisements to help people compare one saving account to another. It shows what the interest rate would be if interest was paid and compounded once a year.
1.6 The social, moral and ethical dilemmas that ar
Social, moral and ethical dilemmas are problems that have no absolute right or wrong solution
Should we save with a bank which offers the highest interest rate or one with and ethical lending policy? Buying shares in companies show support. Some business have high ethical standards. This could include buying from a business that pays their workers a fair pay, do not employ child labour (especally in poor countries) or having high environmental standards. Some business may be considered unethical.
Should people borrow money they can not pay back? From whom should they borrow? Those with good credit histories and a secure income can borrow from reputable banks, who work within the law. However people who are refused often then borrow from lenders who operate illegally. (Loan Sharks) Who make unsecured loans with high interest, but charge astronomical interest.
3.2 The Non Monetary factors affecting the demand
- Style and Image
2.3 The factors that affect the Supply of Labour
- How much the job pays
Non Monetary Factors:
- Ethnic Origin
- State Benefits
3.4 The positive effects of Globalisation on the U
Jobs are created in sectors that the UK does well. (eg. Financial Services, highly specialised manufacturing)
New migrant labour skills lower costs and increases competitiveness (eg. skilled Polish plumbers locating to the UK eased a serve shortage of these skills in this country)
There are opportunities to increase imports and exports
3.4 The negative effects of Globalisation on the U
Low skilled jobs are lost, particularly affecting manufacturing regions of the UK
Increase in immigrant labour depresses wages
Relocating production overseas can cause unemployment
3.1 The importance of trade to the UK economy
International trade is very important to the UK economy, providing a large number of jobs.
Each country has different raw materials, climates, cultures and labour skills giving it advantages in producing certain goods and services -> Comparative Advantage
The UK can specialise in producing the goods and services that it makes better and more efficiently than its competitors. The Surplus goods are then sold abroad, creating jobs for UK citizens.
3.4 The impact of immigration on the UK Labour Mar
- Bringing new knowledge and skills, and filling in gaps in the Labour Market
- Reducing wage inflation and increasing competitiveness
- Providing more workers to support the UK's ageing population
- Increasing the number of consumers as well as producers
- Depresses wages and can displace low- skilled UK workers
- Increases a strain on social services, hospitals and education
3.4 The impact of emigration on the UK Labour Mark
- Losing valuable skills/human capital - the 'brain drain'
- Reducing unemployment in recessions
Barriers in working abroad
- Language and culture
- Visa, working permits ect. are needed outside of the EU
- Restrictions by foreign governments