What are imports/ exports? What do we import/ export here in the UK?

BUSS 4: Assessing Changes in the Business Environment This section examines the relationships between organisations and their external environment. Candidates should understand the opportunities and threats created by changes in the contemporary business environment. The importance of acquiring and managing information and of communicating effectively should be considered throughout. Specification section The Relationship between Businesses and the Economic Environment Contents assessing the effects of the following factors on business organisations: –impact of economic factors –trends in key economic variables –globalisation of markets –developments in emerging markets evaluating the strategies businesses might deploy in response to these changes. Amplification Knowledge of the determinants of macroeconomic factors is not required. Candidates should be familiar with the following economic factors: the business cycle, interest rates, exchange rates, inflation, unemployment and economic growth.

Exchange Rates To understand what exchange rates are To identify how changing exchange rates might affect businesses To evaluate how businesses might respond to changing exchange rates

The exchange rate is the price of one currency expressed in terms of anotherexchange rate

Summary A strong pound can have negative effects on exports which account for around thirty per cent of demand. A weaker pound can provide a boost to aggregate demand, a useful tool in lifting the economy out of a recession

Business strategies in response to £ exchange rate depreciation (the pound is weak)

What does this mean for businesses? What does this depend on? Whether they are:  Businesses that export goods to other countries  Businesses that sell their goods in the UK, competing against foreign imports  Business that import fuel, raw materials and components to use in production

If the exchange rate of a currency rises by 10%. Consider how an exporter of goods with an elastic demand might be affected differently from an exporter of goods with an inelastic demand. What strategies may the first business employ?

Application ppers-face-10pc-price-rises-as-weak-pound-hit-retailers-profits.html ppers-face-10pc-price-rises-as-weak-pound-hit-retailers-profits.html Where are these goods made? What has happened to the currency? What has been the action taken by the businesses? Why are they doing this? What is impacting their strategy?