2.5.1 Economic influences

• Appreciation - the rise in the price of one currency in comparison with another currency.
• Barriers to entry - obstacles that make it difficult for a new firm to enter the market.
• Boom - the high point in a business cycle where a business‘ GDP is growing quickly.
• Business cycle - measures economic activity over time and shows the stages of boom and downturn, recession and recovery.
• Consumer Prices Index (CPI) - a measure which shows changes in the average prices over time.
• Deflation - the general and persistent decrease in the price level.
• Depreciation - a fall in the value of a currency in comparison tot another currency.
• Downturn - a period in the economic cycle where GDP grows but very slowly.
• Economic influences - economic variables such as growth, inflation, interest rates and unemployment.
• Exchange rate - the price of one currency in terms of another.
• Government expenditure- the amount of money spent by the government in its provision of public services and welfare benefits.
• Inflation - a general and persistent increase in the price level.
• Interest rates - the cost of borrowing money / return on saving money.
• Recession - when GDP falls for 2 or more quarters (6 months).
• Recovery - a period where economic growth begins to increase again after a recession.
• Unemployment - the percentage of the working population who are without a job and actively seeking work.