Tricky Business Igcse

Front 1

How does a government increase spending of money in the economy?

Back 1

1)Reducing taxes

2) Increasing government spending

Front 2

How does a tax cut influence the economy?

Back 2

1. rise of GDP

2. lower unemployment

3. might lead to inflation (increase in price level)

Front 3

How does a tax rise influence the economy?

Back 3

- less demand for products which are taxed

- decrease of sales of businesses

- lower profits

- less money to invest/expand

- fall in GDP

Front 4

What is the effect of cut in interest rates?

Back 4

- it is less profitable to save money in the bank, so people spend rather than save

-higher demand - sales - profits

-rise in GDP

- more investments, more jobs created

- lower unemployment

Front 5

What is the effect of increase in interest rates?

Back 5

- it is more attractive to save money in the bank and get interest on it

-smaller demand - sales - profits

- higher costs for businesses - expansion is not prioritised

- less investment

Front 6

What influences what consumers spend their money on?

Back 6

- price level

- amount of income

- tastes/trends/preferences

- price of alternative goods

- price of complementary goods

- population size and changes like migration

- government regulation

- technological change

Front 7

Competitive market

Back 7

Where many businesses compete with each other

Front 8

Spending patterns

Back 8

How do people spend money?

Front 9

Market economy

Back 9

an economy based on free market for goods and services,where government cannot interfere into the economy

Front 10

Mixed economy

Back 10

economy with both private and public sector, increasingly used nowadays

Front 11

Centrally planned economy

Back 11

Where the factors of production belong to the state and the government decided what and how much to produce.

Front 12

Currency appreciation

Back 12

A rise in the value of the currency expressed in terms of the other currency

Front 13

Currency depreciation

Back 13

A decrease in the value of the currency expressed in terms of the other currency

Front 14

Who benefits if exchange rates are falling?

Back 14

Exporters, because it means that our currency is weaker, so for the same amount of money they can actually sell more stuff

Front 15

Who is disadvantaged if exchange rates are falling?

Back 15

Importers, because it means that their sales are becoming more expensive

Front 16

Quotas

Back 16

a limit on the amount of imports allowed into the country

Front 17

Subsidies

Back 17

money given in support to some individual/industry?/corporation in order to make the domestic products cheaper and so competitive

Front 18

Tariffs

Back 18

special kind of taxes, levied on imports, in order to make them more expensive and make people buy more of domestic goods

Front 19

Chain of command

Back 19

shows how many levels of hierarchy there are in an organisation

Front 20

centralisation

Back 20

structure of a company where the most decisions are taken by board of directors, in the headquarters

Front 21

Span of control

Back 21

shows the number of people/workers that a given manager supervises, eh. 3 or 7

Front 22

Delegation

Back 22

giving an authority to carry out tasks and make decisions to someone lower in the hierarchy

Front 23

Running costs

Back 23

costs that the company needs to cover in order to continue producing and stay in the market

Front 24

Start up costs

Back 24

costs that have to be met/paid before a business starts an activity and decides to pursue profit

Front 25

Working capital

Back 25

money to cover day-to-day expenses

Front 26

Types of short-term finance (< 1 year to pay back)

Back 26

-bank overdraft

- short term loan

- trade credit

- reduce the stock held

- shorten the amount of time when customers have to pay for delivered goods

Front 27

Types of long-term finance (> 1 year to pay back)

Back 27

- medium/long term loan

- mortgage

- leasing/purchase hire

- share issue

- debenture

- government grant

- sale of assets

Front 28

Marketing

Back 28

anticipating, identifying, satisfying customer needs

Front 29

Market segment

Back 29

a group of customers who have some similar characteristic e.g. age, monthly income

Front 30

What orientations can marketing of a company have?

Back 30

a) market - focused on consumer needs and providing a product that responds to them

b) product - perfecting the product and then finding buyers for it

Front 31

Segmentation

Back 31

Splitting up the market into smaller groups of people according to their interests/needs

Front 32

What are the 4Ps?

Back 32

1) Product - what we sell?

2) Price - how much we charge?

3) Place (distribution) - where it can be bought?

4) Promotion - How we make people know about it?

Front 33

Marketing Mix

Back 33

The combination of product, price, place and promotion used to sell goods and services

Front 34

How to do market segmentation?

Back 34

1) Evaluate which markets you want to prioritise, eg. Chinese

2) Qualify the characteristics of this market, e.g. population size, average spending

3) Gather primary/secondary research and create a product that suits the results

Front 35

cost-plus pricing

Back 35

price we set covers the production cost and a set amount for profit (mark-up)

Front 36

competitive pricing

Back 36

price based on what competitors are charging

Front 37

penetration pricing

Back 37

setting price very low to be able to enter new market and gain interest

Front 38

price skimming

Back 38

setting a very high price for the product, e.g. for the newest product on our offer or a special edition of an old product

Front 39

psychological pricing

Back 39

Price is used to influence the perception of our product by customers, e.g. if we price a bottle of wine high, customers might think it's good quality

Front 40

Product life cycle

Back 40

1) Introduction

2)Growth

3) Maturity

4) Decline

Front 41

Batch production

Back 41

when we produce a number of similar items in groups or sets, usually for smaller amounts

Front 42

Flow production

Back 42

producing large numbers of the same product in a continous way

Front 43

Job production

Back 43

making individual products per customer, according to his/her requirements

Front 44

Wholesaler

Back 44

a middleman who buys goods from a producer to sell on to the retailer or customer

Front 45

Retailer

Back 45

business person who sells manufactured goods to the consumer, in the shop

Front 46

3 channels of distribution :

Back 46

1. producer - wholesaler - retailer - consumer

2. producer - retailer - consumer

3. producer- consumer