P5 Tesco in UK and China

Topics: Inflation, Unemployment, Economics Pages: 18 (5981 words) Published: April 27, 2015
Sainsbury’s in UK and Tesco in China
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. Term

Definition
Economic cycle

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. Deficit

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 the economic health of different countries. It is also used to look the standards of living. Inflation

Definition – Inflation means a continued increase in the total and overall price level in an economy. Inflation will allow the cost of living to increase. “Inflation means that your money won’t buy as much today as you could yesterday”.

Why inflation is important - If the money supply is increasing the price of products will start to get higher, if the price of products gets higher this makes it harder for the everyday living. The data from the consumer prices index and the retail prices index will be used by businesses and the government. This will help set economic policies. This is because the government will use inflation to produce interest rates. Employment/unemployment

Definition of Employment - The Labour Force Surveys states that “an employed personas anyone aged 16, or over, who has completed at least one hour of work in the period being measured, or are temporarily away from his or her job, such as being on holiday”. The amount of people that are currently in employment will not be the same as the amount of jobs which are offered. Some people may have more than just one job. The LFS gives four different types of employment within the UK these are:

The self-employed
Employees
Unpaid family workers
Participants in government-funded training schemes

Definition of unemployment – Unemployment is when indiduvals are searching for employment or those who are unfit to work. Unemployment is used to measure the health of the economy. The unemployment rate is the rate that unemployed people are then divided by the number of people in the labour force. The international Labour Organisation gives a definition on what unemployed people are classed as which is “those aged 16 or over are unemployed if they are out of work, want a job, have actively sought work in the last four weeks and are available to start work in the next two week...
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