Edexcel Business A Level Revision

Traditionally, western countries such as the UK, Germany and the US have been markets of growth for businesses to target in terms of exports and international trade. Economies such as China and India have comparatively high levels of investment compared with western countries such as the UK, which brings with it jobs, infrastructure and new markets for businesses to expand into. Other developing countries such as Indonesia and Tanzania have large and growing populations, a good supply of relatively young workers and increased industrialisation of the economy. The emergence of Middle-Income Countries (MIC's) has lead to significant changes in the world economy: Countries such as Brazil, India and China have become significant global players in terms of all aspects of trade. The collapse of communism in Russia and other Eastern bloc states has opened up global markets significantly These countries have seen significant economic growth and they have utilised their abundant na...

Growth rate - is the rate at which a nation's gross domestic product (GDP) changes/grows from one year to another Gross Domestic Product - The total value of output (goods and services) produced in the UK in a particular time period, used to measure change in economic activity. Emerging economies - An economy with incomes that are growing but are still quite low. Such countries constitute approximately 80% of the global population and represent about 20% of the world's population. BRIC economies - The economies of Brazil, Russia, India and China, which are at a similar stage of economic development. Exchange rates - The price of one currency in terms of another Purchasing Power Parity (PPP) - Allows for differences in the cost of living in different countries, which gives more realistic comparisons of GDP According to the Office for National Statistics, the UK economy has grown by an average of 2.2% every year since 1956. However, emerging economies such as China an...

Whilst budgets are widely used to in business, you should appreciate that they have some important limitations. In particular: Budgets are only as good as the data being used to create them . Inaccurate or unreasonable assumptions can quickly make a budget unrealistic Budgets can lead to inflexibility in decision-making Budgets need to be changed as circumstances change , for example sales figures can be affected by many variables in demand such as changes in tastes, the actions of a competitor and so on. Budgeting is a time consuming process – in large businesses, whole departments are sometimes dedicated to budget setting and control. This has an associated OPPORTUNITY COST Budgets can result in short term decisions to keep within the budget rather than the right long term decision which exceeds the budget Managers can become too preoccupied with setting and reviewing budgets and forgetting to focus on the real issues of winning customers Costs covere...

Inflation - A sustained increase in the general level of prices within an economy, there is a fall in the value of money. It is measured by recording price changes for a wide range of goods and services likely to be bought by average families. Consumer price index - A measure that examines the weighted average of prices of a basket of consumer good/ services. Disinflation - This is when a lower inflation rate causes prices to rise more slowly Deflation - A decline in the general price level in an economy, characterised by an inflation rate that is lower than 0% Hyperinflation - A period of very high inflation rates, usually leading to a loss of confidence in an economy's currency Inflation rate - The annual rate of change of the average price of goods and services   Inflation can be a serious problem. it creates uncertainty and instability because it is hard to know whether it will accelerate or slow down.  It is measured by the annual percentage change in consume...