1. Economic Environments and other external factors

2. PESTLE Present current external factors with your group include:
A definition
Some current information on that factor
How the factor might impact business and it’s stakeholders

3. Economic Environments

4. How does the business cycle impact business?
Growth is likely to…
Recession is likely to…
Instability elsewhere can cause a ripple effect because…
Inflation can cause uncertainty as…, cost change means…, menu costs are…
Banks also respond to the cycle by tightening or loosening credit so…
The government stabilisation policies might affect business - legal change… tax… spending… interest rates…

5. Business Cycle
Output
Spending
Income
Real GDP
Time

6. Add to your graph Easy Medium Hard Boom/ growth Period Recovery
High Public spending
Bust/ slump period
Recession
Low Public spending
High Unemployment
Government target path
Low inflation
Low unemployment
More household spending
High inflation
Low business investment
Less household spending
Interest rate low
High business investment
Interest rates high
Why is stability so important?

7. Demand and elasticity

8. Supply and elasticity

9. P5 -2 economic environments
Britain remains in the EU
Britain leaves the EU
Key terms to include: Growth, recession, stability, inflation, employment, Labour shortages, trade balance, Investment in the UK

10. M2 - Challenges to business activity stay in EU
Cockermouth School
Iggesund paper board
Think about: Staffing, Sales of exports, imported raw materials, Demand, affect on Demand and supply diagram, investment decisions

11. M2 - Challenges to business activity Leave EU
Cockermouth School
Iggesund paper board
Think about: Staffing, Sales of exports, imported raw materials, Demand, affect on Demand and supply diagram, investment decisions

12. Changes in markets New competition arrives in a market
A product has a strong brand and increases price
New technology makes production cheaper
Firms move into ecommerce
Recession hits Europe

13. Globalisation and interdependence
How do our two businesses fit within a globalised market
How is the market changing for the businesses – think about changes to their D&S and elasticity.
How might the economy and government policy influence the Business?
Does the EU situation have any bearing on the businesses you are studying?