2.5.1 Economic Influences

Front

What is inflation?

Back

The sustained increase in the general price level of goods and services in an economy over time

Front

What is the target rate of inflation for the majority of economies?

Back

2%

Front

What does CPI stand for?

Back

Consumer Price Index

Front

How would you define interest rates?

Back

The price of borrowing or saving money

Front

Who are typically responsible for setting interest rates in an economy?

Back

The Central Bank (BoE in the UK)

Front

What typically follows a Boom in the Business Cycle?

Back

Downturn

Front

What is the definition of exchange rates?

Back

The price of one currency in terms of another

Front

Impact on business if dollar ($) increases in value against pound (£) for a business exporting to North America.

Back

Increase in export sales

Front

What is the primary purpose of a central bank in an economy?

Back

To manage the nation's currency and monetary policy

Front

Which economic indicator is most commonly used to measure the overall economic performance of a country?

Back

Gross Domestic Product (GDP)