1. BTEC Business Assignment 3 – P5/M2
Economic Environment
BTEC Business
Assignment 3 – P5/M2

2. To explore the economic factors that effect business.
Learning Objective
Today’s learning objective is:
To explore the economic factors that effect business.

3. Economic Environment Employment Inflation Economic Growth
International trade
Interest Rates
Learning Objective: To explore the economic factors that affect business.

4. How is the economy measured?
Gross Domestic Product (GDP)
Measures the total value of output produced in a country over one year.
This can be recorded on a graph called the Business Cycle
GDP 0.7% growth

5. Stability Output (GDP) Time Boom Downturn Recovery/Upturn Recession
Growth
Time

7. Recession
Ripple
Effect

9. Consumer Price Index (CPI)
What is Inflation? a sustained increase in the average prices of goods and services resulting in the fall of the value of money
Consumer Price Index (CPI)
Target is 2% CPI (annually)
1.2 % (Nov 2014)
What does the target mean?
A basket of goods and services
is worth £100 in 2009 then it is
worth £102 in 2010.
Inflation
Calculator

13. Lets look at Bank of England Website for more information
Interest Rates Cost of borrowing money and the return for saving money 0.5% Nov 2014
Lets look at Bank of England Website for more information
MPC