2. Do Now! How would a business be affected if:
Prices of raw materials increased
Unemployment fell
Interest rates increased
The value of the GB£ increased vs the US$ (you could get more $ per £1 than before)

3. 2.1.10 Use of relevant terms, concepts and methods - to understand business and economic behaviour
Lesson Objectives
Define Key Terms
Identify and describe a number of economic factors
Evaluate the possible impact of changes in such economic factors (both up and down) on business behaviour assess how businesses can react to such changes in economic factors
Answer exam questions on the topic

4. Economic factors that can change which will affect the business

5. Key Terms
Inflation
The cost of borrowing money, or the reward for saving money.
Savers want high interest rates
Borrowers want low interest rates
Exchange Rates
The % that the price of all items changes over time. The Government calculates the average price of a basket of shopping every month to find out the % change.
Interest Rates
The number of people who are looking for a job, but do not have a job who are claiming job seekers allowance
Unemployment
The price at which one currency can be bought and sold for another

7. Impact on Business of changes in rate of Inflation:
INCREASE IN RATE OF INFLATION:
Impact
Reaction

8. Impact on Business of changes in Exchange Rate:
Exchange Rate: INCREASE IN VALUE OF £:
Impact
Reaction
Exchange Rate: DECREASE IN VALUE OF £:
Impact
Reaction

9. Impact on Business of changes in Interest Rates:
Interest Rates: INCREASE IN INTEREST RATES:
Impact
Reaction
Interest Rates: DECREASE IN INTEREST RATES:
Impact
Reaction

10. Impact on Business of changes in level of Unemployment:
Unemployment: INCREASE IN UNEMPLOYMENT:
Impact
Reaction

12. Plenary Lesson Objectives Define Key Terms
Identify and describe a number of economic factors
Evaluate the possible impact of changes in such economic factors (both up and down) on business behaviour assess how businesses can react to such changes in economic factors
Answer exam questions on the topic