A2 Business - The Marketing Environment

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Economic Growth
An increase in the value of good and services produced by an economy over time
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GDP (Gross Domestic Product)
The value of goods and services produced by an economy over a specific period
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GDP Formula
Consumption + Investment + Gov Spending + Net Exports
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Consumption
Household spending on goods and services
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Investment
Covers investment spending on government products
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Government Spending
Spending by the government on goods and services
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The Business Cycle
Sequence of Slump, Recovery, Boom & Recession
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Boom
High levels of consumer spending, business confidence, profits and investment. Price and Costs rise faster. Unemployment low.
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Recession
Defined by a fall in GDP for two consecutive quarters. Falling levels of consumer spending and confidence mean lower profits for business
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Slump
Very weak consumer spending and business investment. Many business failures. Rapidly rising unemployment
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Recovery
Consumers begin increasing their spending. Businesses feel more confident and begin to invest again
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Cyclical Business
A business where demand is closely linked to GDP
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Counter-Cyclical Business
A business that may thrive even when the economy is weak
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Credit Crunch
Liquidity Crisis. Banks become nervous about lending money to each other and to other business customers
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Business Model
How a business organises its activities to generate income and incur costs
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Tipping Point
The point in time at which new technology becomes mainstream
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Social Environment
The way in which changes in society affect a business activities
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Pay Equality Law
Men and Women are entitled to equal pay for work of equal value
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National Minimum Wage
Employers are required to pay their staff a minimum amount. Based on their age.
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Employment right
Something an employee is entitled to that is protected by law
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Price Fixing
Agreeing prices with competitors to force customers to pay a high price and maximise profits
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PESTLE
External factors affecting a business. Political, Economic, Social, Technological, Legal, Environment
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Other cards in this set

Card 2

Front

The value of goods and services produced by an economy over a specific period

Back

GDP (Gross Domestic Product)

Card 3

Front

Consumption + Investment + Gov Spending + Net Exports

Back

Preview of the back of card 3

Card 4

Front

Household spending on goods and services

Back

Preview of the back of card 4

Card 5

Front

Covers investment spending on government products

Back

Preview of the back of card 5
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