EoY Business Revision

What is Government spending?

Money spent by the government on public goods and services e.g. education, health care.

Why do Governments spend money?

They spend money to provide for essential public services, redistribute wealth and steer the economy.

Opportunity Cost

Something that must be given up and paid in order to do something else.

Taxation

Compulsory financial charges placed by the government to individuals and organizations.

What is unemployment?

A situation where people who are working age, capable of working and seeking work but are unable to find it.

What are the causes of unemployment?

• Lack of Education

• Lack of Experience

• Too many people working in one sector

What are the types of unemployment?

• Frictional

• Seasonal

• Structural

• Cyclical

Frictional Unemployment

Temporary, voluntary unemployment that occurs when someone is between jobs, seeking a better position or their first time in the workforce.

Seasonal Unemployment

Where people are out of work due to predictable, calendar-based fluctuations in demand for labour within specific industries.

Structural Unemployment

A long term form of joblessness due to a fundamental mismatch with the skills workers posses and the skills needed for available jobs.

Cyclical Unemployment

Temporary joblessness caused by economic downturns where reduced demands for goods and services forces companies to lay off workers.

GDP

Gross Domestic Product - The total monetary value of all finished goods and services produced within a country's borders during a specific period

GDP per capita

A key economic metric that breaks down a country's total economic output by its population, providing an average measure of economic prosperity and living standards.

What is inflation?

The general and sustained increase of prices across an economy overtime, which reduces the purchasing power of money.

Why do prices rise?

Demand exceeds supply at existing prices.

Cost of living

The cost of purchasing goods and services essential for survival like food and water.

What are the causes of demand pull inflation?

• Too much government spending

• Increased Consumer spending

• More exports

• Firms investing in Capital

What is marketing?

Marketing is adverting and putting offers and sales so that people are more likely to buy your product.

What is a target market?

What type of customers the product is aimed at.

Market Research

The activity of gathering information about consumers' needs and preferences. This can be done through surveys.

What are some advertising methods?

• making slogans

• posters

• Promises

• ads (as in YT ads)

• Making deals and offers (like 20% off)

What is the role of HR?

• Recruits employees (if they are short-staffed)

• Motivates Employees

• Makes sure everyone is treated fairly

• Handles Payroll

• Organises training

What are some ways businesses motivate their employees?

• Financial rewards (such as bonus in wage)

• Seeing employees’ strengths

• Setting clear, achievable goals for the employees

• Listening to the employees if they have any problems and acting upon them

What are the causes of cost-pull inflation?

• Increased cost of production

• increased wages

• Increased fuel costs

• Increase in Business rates

• Interest on loans

• Trade Unions

• Higher import costs

Why does motivation matter in Business?

People will have more confidence to do their jobs and therefore more profit will be made for companies.

What is cost-pull inflation?

Cost-pull inflation happens when the overall prices of goods and services rise because the costs to produce them increase.

What is demand pull inflation?

Demand pull inflation occurs when prices rise because demand for goods and services exceeds supply.

What are the four main departments in a business?

1. Human Resources (HR) - Manages employee recruitment, motivation, and training.

2. Finance - Handles budgeting, accounting, and financial planning.

3. Marketing - Focuses on advertising, market research, and sales strategies.

4. Operations - Oversees production, supply chain, and daily business activities.

Unemployment Rate Formula

$$\text{Unemployment Rate} = \left( \frac{\text{Number of Unemployed People}}{\text{Labor Force}} \right) \times 100$$