The Economy

What is the economy

How well the country is doing as a whole

The economy cycle

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first it grows

Definition

then it reaches its maximum and has a boom

then it goes down into a recession

The system of trade and industry by which the wealth of a country is made and used.

and down to a slump which is the lowest point

and then it grows again

Overal the economy is growing

They try to minimise recession and slump

Higher periods of growth and boom

What affects the economy?

Tax Rates

Law

Policies

Wages

Governmental Activities

the economy might be in a slump if there are:
high levels of unemployment
incomes on average are lower

if people earn less, they spend less, local businesses make less profit
they buy fewer products and cut down on staff

the government intervenes

decrease interest rates

this creates jobs increases incomes
helps improve wealth

How businesses react to changes in employment?

unemployment levels are low incomes are high confidence in the economy

Weak Economy & Unemployment Increase

Growing Economy & High Employment

Increase pay to encourage employees away from current jobs.

Lower wages.

Employees have less choice on where to work

Higher incomes

More sales for a business

Increase costs