CCEA A2 Business Studies – Unit 2 – Study Guide & Practice Questions
Macro economics - correct answer ✔✔The study of the performance and behaviour of an
economy as a whole.
mixed economy - correct answer ✔✔An economic system that allows both the government and
the private sector to allocate resources, e.g. the UK has a mixed economy.
Business Cycle - correct answer ✔✔A measure of the regular fluctuations in the level of
economic activity. It is made up of the following elements: peak, recession, trough and recovery.
Gross Domestic Product (GDP) - correct answer ✔✔The value of goods and services produced
by an economy over a specific time period.
Peak (Boom) - correct answer ✔✔The stage when an economy is at the peak of activity.
Recession - correct answer ✔✔Income and output begin to fall and business confidence is
reduced.
Trough (Slump) - correct answer ✔✔The lowest point in the trade cycle - production is low,
businesses close and unemployment is high.
Recovery - correct answer ✔✔At this stage income will start to rise and business output will
increase, firms will invest more, consumers will start to increase spending and businesses will
start to recruit new workers.
Business Confidence - correct answer ✔✔An economic indicator that measures the amount of
optimism or pessimism that business managers feel about the prospects of their
companies/organisations.
, Government Policy Objectives - correct answer ✔✔A series of actions through which the
authorities attempt to create the best possible economic environment for business and
individuals. The main targets are: steady economic growth, controlled inflation, low
unemployment, stable exchange rates and a balanced balance of payments.
Economic Growth - correct answer ✔✔An indication of the change in output or income within
the economy.
Sustainable Development - correct answer ✔✔Growth which continues year on year.
Inflation - correct answer ✔✔A continuing tendency for prices to rise.
Unemployment - correct answer ✔✔The number of people who are of working age but not in a
job.
Balance of Payment - correct answer ✔✔An accounting record of all monetary transactions
between a country and the rest of the world
Current Balance - correct answer ✔✔The difference between the value of money entering and
leaving a country as a result of trade in goods services and transfers.
Imports - correct answer ✔✔Goods and services purchased from abroad for use in a particular
country.
Exports - correct answer ✔✔Goods and services sold by a particular country to another country.
Macro economics - correct answer ✔✔The study of the performance and behaviour of an
economy as a whole.
mixed economy - correct answer ✔✔An economic system that allows both the government and
the private sector to allocate resources, e.g. the UK has a mixed economy.
Business Cycle - correct answer ✔✔A measure of the regular fluctuations in the level of
economic activity. It is made up of the following elements: peak, recession, trough and recovery.
Gross Domestic Product (GDP) - correct answer ✔✔The value of goods and services produced
by an economy over a specific time period.
Peak (Boom) - correct answer ✔✔The stage when an economy is at the peak of activity.
Recession - correct answer ✔✔Income and output begin to fall and business confidence is
reduced.
Trough (Slump) - correct answer ✔✔The lowest point in the trade cycle - production is low,
businesses close and unemployment is high.
Recovery - correct answer ✔✔At this stage income will start to rise and business output will
increase, firms will invest more, consumers will start to increase spending and businesses will
start to recruit new workers.
Business Confidence - correct answer ✔✔An economic indicator that measures the amount of
optimism or pessimism that business managers feel about the prospects of their
companies/organisations.
, Government Policy Objectives - correct answer ✔✔A series of actions through which the
authorities attempt to create the best possible economic environment for business and
individuals. The main targets are: steady economic growth, controlled inflation, low
unemployment, stable exchange rates and a balanced balance of payments.
Economic Growth - correct answer ✔✔An indication of the change in output or income within
the economy.
Sustainable Development - correct answer ✔✔Growth which continues year on year.
Inflation - correct answer ✔✔A continuing tendency for prices to rise.
Unemployment - correct answer ✔✔The number of people who are of working age but not in a
job.
Balance of Payment - correct answer ✔✔An accounting record of all monetary transactions
between a country and the rest of the world
Current Balance - correct answer ✔✔The difference between the value of money entering and
leaving a country as a result of trade in goods services and transfers.
Imports - correct answer ✔✔Goods and services purchased from abroad for use in a particular
country.
Exports - correct answer ✔✔Goods and services sold by a particular country to another country.
