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Ch 20
Business, Economy & the community
| Term | Definition |
|---|---|
| If economy is doing well | businesses are in profit new businesses set up low unemployment, inflation low, interest rates low |
| If economy is not doing well | businesses close down unemployment rises inflation rises interest rates rise |
| The affect variables have on a business. | SALES – They can affect demand COSTS – Labour costs. BUSINESS CONFIDENCE |
| Economic variables | These are elements of the economy which are subject to change. |
| Role of the government | Regulations (rules/laws) . Redistribute wealth – spread wealth around the economy/country. Provide services Enforce the legislation Develop infrastructure |
| Unemployment | The percentage of the labour force that does not have a job. Labour force is anyone able to work. Does not include those under 16, Pensioners, those with disability. |
| Exchange rates | This tells you how much foreign currency you will get for €1. To convert euro to another currency, you simply multiply it by the exchange rate. |
| Interest rates | - COST of borrowing money from financial institution such as a bank. Interest rates are expressed as an annual percentage rate (% of amount borrowed) - It is also the REWARD/BONUS received for money saved/invested. (Bank pays you interest for |
| Impact of business on the economy | Create jobs Tax revenue Competition Sponsorship Creation of wealth Stronger local Communities, with strong local businesses. Less social issues such as Crime Better quality of life |
| Inflation | This is the annual percentage increase in the level of prices of goods/services in the economy (over a period of time) - Measured by Consumer Price Index - CPI |
| How are changes in prices measured | Consumer Price Index - CPI |
| Negative effects of Business to the economy | Social and Environment issues Competition - closures of small businesses |
| Enterprise Ireland | They offer grants, advice and mentoring for new indigenous businesses. |
| Failte Ireland | Aim to increase tourism for Ireland. E.g. Wild Atlantic way. Gives advice to those in the tourism sector (hotels) |
| IDA Ireland | Industrial Development Authority – Encourage MNCs from foreign countries. FDI (foreign direct investment) Helps advise them on setting up offices/factories in Ireland. |
| Bord Bia | Promote Irish food/beverages abroad. |
| Tax | This is the compulsory payment that must be made to the government in return for the benefits of living or doing business in Ireland. E.g. Corporation tax, PRSI, PAYE |
| List the Economic variables | Interest rates Inflation Taxation Exchange rates Unemployment |
| Community Development | This is when local people come together to identify the main problems in an area. They then develop a plan to solve the problems themselves. |
| Corporation tax | This is tax a business pays from their profits |
| PRSI, PAYE, USC | If you are an employee, these taxes are usually deducted from your pay |
Created by:
mcurran
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