Tesco has becoming a major trader across the globe but with this approach it faces many challenges. Across the countries in which it operates in, each has their own laws, regulations, economy and consumers.
Definition – The economic cycle is the fluctuation of the economy, this can be in the time of growth or recession. The economy will experience ups and downs in the amount people spend, the amount of income coming in, the amount of jobs there is and the output. There can either be an upturn or a downturn.
Downturn – The output will fall and businesses will then have to loss members of staff due to the decrease in sales. The economy will then go through a recession.
Upturn – The output will increase and business will then be able to hire more members of staff. The economy will then go through economic growth.
Factors of the economic cycle – Levels of employment, interest rates, overall consumer spending and Gross domestic product (GDP) all factors of the current economic cycle.
Definition –The deficit is the space inbertween what the government spends and the income it gets. A high percentage of this is from taxes. Spending will go up in order to pay any unemployment benefits. The income of tax will decrease. Businesses will make less profit and then eventually fail as a business. Consumers will pay less VAT, and people who have lost their jobs will not have to pay as much income tax.
Why deficit spending so important – Deficit spending is important as it has the ability to boost economic growth and create more jobs.
Economic growth/ GDP
Definition - GDP stands for Gross Domestic Product. GDP is the value of all the finished products and services which are produced in the borders of a specific country in a certain period of time. GDPA will normally be calculated annually. GDP consists of public and private government outlays and consumption. GDP is used as an indicator of