Do Now! How would a business be affected if: Prices of raw materials increased Unemployment fell Interest rates increased The value of the GB£ increased vs the US$ (you could get more $ per £1 than before)

2.1.10 Use of relevant terms, concepts and methods - to understand business and economic behaviour Lesson Objectives Define Key Terms Identify and describe a number of economic factors Evaluate the possible impact of changes in such economic factors (both up and down) on business behaviour assess how businesses can react to such changes in economic factors Answer exam questions on the topic

Economic factors that can change which will affect the business

Key Terms Inflation The cost of borrowing money, or the reward for saving money. Savers want high interest rates Borrowers want low interest rates Exchange Rates The % that the price of all items changes over time. The Government calculates the average price of a basket of shopping every month to find out the % change. Interest Rates The number of people who are looking for a job, but do not have a job who are claiming job seekers allowance Unemployment The price at which one currency can be bought and sold for another

Impact on Business of changes in rate of Inflation: INCREASE IN RATE OF INFLATION: Impact Reaction

Impact on Business of changes in Exchange Rate: Exchange Rate: INCREASE IN VALUE OF £: Impact Reaction Exchange Rate: DECREASE IN VALUE OF £: Impact Reaction

Impact on Business of changes in Interest Rates: Interest Rates: INCREASE IN INTEREST RATES: Impact Reaction Interest Rates: DECREASE IN INTEREST RATES: Impact Reaction

Impact on Business of changes in level of Unemployment: Unemployment: INCREASE IN UNEMPLOYMENT: Impact Reaction

Plenary Lesson Objectives Define Key Terms Identify and describe a number of economic factors Evaluate the possible impact of changes in such economic factors (both up and down) on business behaviour assess how businesses can react to such changes in economic factors Answer exam questions on the topic