The Economy
What is the economy
How well the country is doing as a whole
The economy cycle
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