Term
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Definition
| Balance of payments is an annual record of a country's export earnings and its import expenditure. A surplus exists if the value of exports exceeds that of imports (vice versa for a deficit on the balance of payments). |
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Term
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Definition
| Deregulation refers to the removal of government rules and regulations which constrain an industry, thereby enhancing its efficiency. Deregulation should also encourage more competition within an industry. |
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Term
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Definition
| Direct tax is a levy that is paid from the income of individuals or businesses, such as personal income tax and corporation tax. |
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Term
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Definition
| Economic growth measures the change in the Gross Domestic Product of a nation over time. Growth is said to occur if there is an increase in GDP for two consecutive quarters. |
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Term
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Definition
| Ethics are the mral values and judgements (what is right and just) that society believes organisations should consider in their decision-making. |
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Term
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Definition
| Exchange rate refers to the value of a country's currency in terms of another currency. |
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Term
External shocks
(Exogenous shocks) |
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Definition
| External shocks (or exogenous shocks) are unforeseeable and unexpected changes in the external business environment that tend to affect all businesses in the economy, such as natural disasters or wars. |
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Term
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Definition
| Fiscal policy refers to government policies that deal with taxation and government expenditure in order to affect the level of economic activity. |
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Term
Gross Domestic Product
(GDP) |
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Definition
| GDP is the total value of a nation's annual output. It is used as an indicator of the level of economic activity in a country. |
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Term
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Definition
| Indirect tax is a levy placed on the purchase of goods and services, such as sales taxes (in Australia, the GST) and excise duties. |
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Term
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Definition
| Inflation occurs when the general price level in an economy continuously rises. It is calculated by measuring changes in the cost of a representative basket of goods and services purchased by the average household over a period of time. |
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Term
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Definition
| Interest rate is a measure of the price of money. It can be expressed in terms of the amount charged for money that is borrowed or how much is offered on money that is saved. |
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Term
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Definition
| Monetary policy refers to government policies concerned with changing interest rates in order to control the money supply, and the exchange rate. |
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Term
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Definition
| PEST analysis is a framework used to analyse the opportunities and threats of the political, economic, social and technological environments on business activity. It is one of the many tools that can be used in the decision-making process. |
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Term
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Definition
| Protectionism refers to any measure taken by a government to safeguard its busineses from foreign competitors. This presents a threat or barrier to trade for businesses trying to operate in overseas markets. |
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Term
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Definition
| Tariffs are a method of protectionism whereby the domestic government taxes foreign imports, thereby giving domestic producers a relative price advantage. |
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Term
Trade cycle
(Business cycle) |
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Definition
| Trade cycle (or business cycle) refers to the fluctuation in the level of economic activity over time. Economies tend to move through the cycle of booms, recessions, slumps, recovery and growth. |
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Term
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Definition
| Unemployment refers to the number of people in the workforce who are willing and able to work but cannot find employment. |
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