Economic Environments

Topics: Economics, Recession, Macroeconomics Pages: 2 (513 words) Published: November 15, 2013
Economic Terms Definition
Recession A significant decline in activity across the economy, lasting longer than a few months Trough The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion. BoomA period of time during which sales of a product or business activity increases very rapidly. RecoveryA period of increasing business activity signalling the end of a recession. GDPThe monetary value of all the finished goods and services produced within a country's borders in a specific time period. Economic GrowthAn increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Capitalization In accounting, it is where costs to acquire an asset are included in the price of the asset. NationalisationRefers to the process of a government taking control of a company or industry. InfrastructureThe basic physical systems of a business or nation. Transportation, communication, sewage, water and electric systems are all examples of infrastructure. PrivatisationThe transfer of ownership of property or businesses from a government to a privately owned entity.

4b) Now briefly describe the two different economic environments you have chosen and explain the effects that the two environments would have/did have on your organisation (P5 part).

Within my selected organisation, Tesco, there are 2 important economic environments that have an influence on business activities. Both economic environments will have a different way on affecting Tesco. The economic environments are growth and recession. Economic growth occurs when more goods are being produced and consumed, and incomes are rising. A growth company tends to have very profitable reinvestment opportunities for its own retained earnings. Economic growth will affect Tesco as it would increase their profits due to more people wanting more products and wanting to spend their money. As...
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