Edexcel A Level Business - Theme 2.5

what is inflation

the general rise in price of goods

what is the consumer price index

looks at the change in price of commonly Brough goods

what is consumer price inflation

the rate at which the prices of goods and services bought by households rise or fall

what are exchange rates

the change in value of one currency against another

What is appreciation?

the rise in the £ against another currency

Strong

Pound

Imports

Cheaper

Exports

Dearer

what is deprecation

the fall in the £ against other currencies

Weak

Pound

Imports

Dearer

Exports

Cheaper

what are interests rates

the cost of borrowing or the reward for saving

what is taxation

government tax

what is the economic cycle

boom - high consumer spending

recession - falling levels of demand

slump - lowest consumer spending

recovery - demand slowly rising