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GDP
the total value of output of goods and services in a country in one year
recession
falling period of GDP
Inflation
the increase in average price level of goods and services over time
Unemployment
people who are willing and able to work but cannot find a job
Economic growth
when a country’s GDP increases- more goods and services are produced than in the previous year
Balance of payments
the difference between a country’s exports and imports
Real incomes
the value of income, falls when prices rise faster than money income
Exports
goods and services sold from one country from other countries
Imports
goods and services bought in by one country from other countries
Exchange rate
the price of one currency in terms of another
Exchange rate depreciation
the fall in the value of a currency compared with other currencies
Fiscal Policy
any change by the government in tax rates or public sector spending
Direct taxes
paid directly from incomes. Examples: income or profits taxes
Indirect taxes
added to the prices of goods and taxpayers pay the tax as they purchase the goods. Example: VAT
Disposable income
the level of income a taxpayer has after paying income tax
import tariff
a tax on an imported product
import quota
physical limit on the quantity of a product that can be imported
Monetary policy
a change interest rates by the government or central bank.
Social responsibility
when a business decision benefits stakeholders other than shareholders. For example, a decision to protect the environment by reducing pollution by using the latest environmentally friendly production equipment
Environment
our natural world
Global warming
gradual increase in the overall temperature of the Earth’s atmosphere, generally thought to be caused by increased levels of CO2, CFCs and other pollutants in the atmosphere
Pressure Group
made up of people who want to change business or government decisions by taking action such as organizing consumer boycotts
Private costs
an activity that are the costs paid for a business or the consumer of the product
Private benefits
an activity that are gains to a business or the consumer of the product
External costs
costs paid for by the rest of society, other than the business, as a result of business activity
External benefits
the gains to the rest of the society, other than the business, as a result of business activity
Social cost
external costs+private costs
Social benefits
external benefits+private benefits
Sustainable development
development which does not put at risk the living standards of future generations
Consumer boycotts
when consumers decide not to buy products from businesses that do not act in a socially responsible way
Ethical decisions
based on a moral code
