Business : AO1
Business activity
External influences on business activity
Privatisation: The act of selling state - owned and controlled business organisation to
investors in the private sector
Nationalisation : The transfer of privately owned business to state ownership and
control
Minimum wage : Employers are not allowed to pay less that the set minimum wage per
hour
Monopoly : A market in which there is only one supplier with no close competitors
Collusion : Businesses agree to work together and restrict competition by fixing prices
and sharing contracts between themselves
Corporate social responsibilities : When a business accepts its legal and moral
obligation to all stakeholders
Social audit : A report on the impact a business has on society
Demographic : Relating to the structure of the population
Globalisation : The increasing freedom of movement of goods, capital and people
around the world
Information technology : The use of electronic technology to gather store, process
and communicate information
Job enrichment : Aims to use the full capabilities of workers by giving them the
opportunity to do more challenging and fulfilling work
Protectionism : The use of barriers to free trade to protect country’s domestic
industries
Tariff : A tax imposed on an imported product
,Quota : A physical limit places on the quantity of imports of certain products
Voluntary export limits : Agreed limits to the quantity of certain goods sold by one
country to another
Free international trade : Trade with no restrictions of barriers that might prevent or
limit trade between countries
Multinational company : A business that has its headquarters in one country and the
factories and assembly plants in other country
Greenwashing : Giving false impression or providing misleading information about how
a company’s products are environmentally sound and sustainable
Environmental audit : Assesses the impact of activities and decisions of a business on
the environment
Sustainability : Activities that meet the needs of the present without compromising the
ability of future generations to meet their needs
Green consumerism : The trend for consumers to only buy products that are produced
sustainably without environmental damage
External economic influences on business activity
Market failure : When market fail to achieve the most efficient allocation of resources,
resulting in under or overproduction of certain goods or services
External cost : The costs of an economic activity that are not paid by the producer or
consumer but by the rest of the society
Macroeconomic objectives : The goals a government is aiming to achieve for the
whole country
Economic growth : An increase in a country’s productive potential, measured by an
increase in its real GDP
, Gross domestic product (GDP) : The total value of goods and services produced in a
country in one year
Real GDP : Gross domestic product data adjusted for the effects of inflation
Inflation : An increase in the average price level of goods and services resulting in a
fall in the value of the money
Deflation : A fall in the average price levels of goods and services
Hyperinflation : Very high and accelerating inflation, which quickly erodes the real
value of the local currency
Imports : Goods or services purchased from another country
Exports : Goods and services sold to consumers and businesses in other countries
Exchange rate : The price of one currency in terms of another
Recession : A decline in real GDP of two or more quarters
Business investment : Expenditure by a business on capital equipment, new
technology and research and development
Labour productivity : average output per employee in a given time period
Business cycle : The regular swings in output, measures by real GDP, that occur in
most economies, varying from boom conditions to recession
Working population : All those in the population of working age who are willing and
able to work
Unemployment : When members of the working population are willing and able to work
but are unable to find a job
Cyclical unemployment : Unemployment caused by low demand for goods and
services during a period of slow economic growth or recession
Business activity
External influences on business activity
Privatisation: The act of selling state - owned and controlled business organisation to
investors in the private sector
Nationalisation : The transfer of privately owned business to state ownership and
control
Minimum wage : Employers are not allowed to pay less that the set minimum wage per
hour
Monopoly : A market in which there is only one supplier with no close competitors
Collusion : Businesses agree to work together and restrict competition by fixing prices
and sharing contracts between themselves
Corporate social responsibilities : When a business accepts its legal and moral
obligation to all stakeholders
Social audit : A report on the impact a business has on society
Demographic : Relating to the structure of the population
Globalisation : The increasing freedom of movement of goods, capital and people
around the world
Information technology : The use of electronic technology to gather store, process
and communicate information
Job enrichment : Aims to use the full capabilities of workers by giving them the
opportunity to do more challenging and fulfilling work
Protectionism : The use of barriers to free trade to protect country’s domestic
industries
Tariff : A tax imposed on an imported product
,Quota : A physical limit places on the quantity of imports of certain products
Voluntary export limits : Agreed limits to the quantity of certain goods sold by one
country to another
Free international trade : Trade with no restrictions of barriers that might prevent or
limit trade between countries
Multinational company : A business that has its headquarters in one country and the
factories and assembly plants in other country
Greenwashing : Giving false impression or providing misleading information about how
a company’s products are environmentally sound and sustainable
Environmental audit : Assesses the impact of activities and decisions of a business on
the environment
Sustainability : Activities that meet the needs of the present without compromising the
ability of future generations to meet their needs
Green consumerism : The trend for consumers to only buy products that are produced
sustainably without environmental damage
External economic influences on business activity
Market failure : When market fail to achieve the most efficient allocation of resources,
resulting in under or overproduction of certain goods or services
External cost : The costs of an economic activity that are not paid by the producer or
consumer but by the rest of the society
Macroeconomic objectives : The goals a government is aiming to achieve for the
whole country
Economic growth : An increase in a country’s productive potential, measured by an
increase in its real GDP
, Gross domestic product (GDP) : The total value of goods and services produced in a
country in one year
Real GDP : Gross domestic product data adjusted for the effects of inflation
Inflation : An increase in the average price level of goods and services resulting in a
fall in the value of the money
Deflation : A fall in the average price levels of goods and services
Hyperinflation : Very high and accelerating inflation, which quickly erodes the real
value of the local currency
Imports : Goods or services purchased from another country
Exports : Goods and services sold to consumers and businesses in other countries
Exchange rate : The price of one currency in terms of another
Recession : A decline in real GDP of two or more quarters
Business investment : Expenditure by a business on capital equipment, new
technology and research and development
Labour productivity : average output per employee in a given time period
Business cycle : The regular swings in output, measures by real GDP, that occur in
most economies, varying from boom conditions to recession
Working population : All those in the population of working age who are willing and
able to work
Unemployment : When members of the working population are willing and able to work
but are unable to find a job
Cyclical unemployment : Unemployment caused by low demand for goods and
services during a period of slow economic growth or recession
