External influences on business activity - IGCSE BS 23/25

Balance of payments

the difference between the values of export and import goods and services of a country over a year

Inflation

the price increase of goods and services over time

Levels of unemployment

the proportion/percentage of the population that are capable of working but are unable to find a job

Gross domestic product (GDP)

the value of all goods and services produced by a country in a year

Interest rate

the cost to a person or business of borrowing money from a lender such as a bank

Tax

a charge/fee paid to the government on income, goods and services

Direct tax

the tax charged on personal income or tax on the profit made by a business

Indirect tax

the tax charged on the price of goods and services, which is added to the price of goods and services before they are bought

Disposable income

the amount of income left for individuals after taxes have been paid

Externality

the effect of business activities on unrelated parties

Social cost

the negative impact of a business decision on society

Social benefit

the positive impact of a business decision on society

Cost-benefit analysis

analysis of the costs and benefits of a project, the focus being on the social costs and benefits

Sustainable development

having a positive overall impact on the environment and its stakeholders, ensuring its survival in the future

Multinational company

an organisation that has operation in more than one country

Globalisation

the process by which countries are connected with each other because of the trade of goods and services

Trade bloc

a group of countries that trade with eachother and are usually part of a free trade agreement

Home country

the domestic country where a multinational starts/first establishes its operations

Host country

the foreign country where a multinational sets up its operations

Tariff

a tax applied to the value of imported and exported goods

Quota

a physical limit on the quantity of goods that can be imported and exported

Depreciation

the value of the currency goes down with respect to another

Appreciation

the value of the currency increases with respect to another currency