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2.5 external influences - Coggle Diagram

- - - - WPIDEC
        
        the opposite of SPICED, negative for us
      - SPICED
        
        we can get more of the foreign currency for our pound, cheaper to buy products. they will get less spend more of their currency to get our currency
    - - lower interest rates encourage borrowing so higher spending and less saving
      - high interest rates = lower spending, more saving and inflation
      - savings account
      - cost of borrowing a loan is interest
        
        credit rating
        
        how much you borrowed
        
        depends on likeliness and risk u will pay back
    - - increased costs for business which sometimes causes the inflation
      - decrease in spending power unless wages havent gone up relative
      - measured through basket of goods of things people most likely buy, comparison of their price change
    - - vicious cycle that repeats
      - peak- peak gdp growth\
      - recovery- gdp starts growing again
      - trough - bottomg
      - recession- two consecutive quarters of negative growth in succession. less consumer confidence > reduced spending.
    - - individual tax
        
        income tax
        
        national insurance
      - business
        
        corporation tax
        
        VAT
      - tax FUNDS PUBLIC SERVICES