Essay Business Btec Level 3 Unit 38
The economy of each country has features that could be measured in different ways to see how they are changing. The economic environment of countries has an effect on countries due to the trading between countries affecting the money coming in and out of the country which then affects the cost of goods and prices.
The economic environment would affect jaguar land rover as the goods and prices will have been affected. By this happening it would result in the prices of the cars costing more due to the resources used costing more for the manufacturer.
Increases and falls in the production are shown through the business cycle as well as income and the expenditure of the country over a period of time. …show more content…
Knowing the different stages of the business cycle is important in understanding how the economy is measured. There are different indicators of an economy’s status which could be measured to indicate how well it is doing which are:
Changes in Gross Domestic Product (GDP)
Gross domestic product (GDP) is what is used to measure how much is being made in the UK. Changes in the GDP specify which stage of the business cycle the UK economy is in. GDP output measures the value of the products and services that have been made through the economy. GDP income measure the total income generated by the production of goods and services in the economy. GDP expenditure measures the total expenditure on all finished goods and services that have been produced in the UK.
By jaguar land rover producing more cars and making a lot of sales will help to add to the UK economy which will also contribute to the GDP increase. With these GDP statistics it will help the government to predict what is going to happen in the future.
Rates of inflation and deflation
Inflation and deflation both relate to the measure of prices within the UK economy. Inflation is when the price of products and services are increasing. Inflation is measured using consumer price