6. External influences on business activity
- Syllabus
- 0264–2027–2028
- Section
- 6
- Level
- —
Exam analysis
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Recent 5 years
In this section
Topic 6.1
6.1. Economic issues
Objectives in this topic
6.1.1—Business cycle
- main stages of the business cycle: growth, boom, recession, slump
- how each stage of the business cycle may affect a business
- effects of changes in the levels of employment, inflation and economic growth on a business
6.1.2—Effects of government policy
- effects of changes in taxes on business profit
- effects of changes in taxes on people’s income
- effects of changes in government spending
- effects of changes in interest rates
- how businesses may respond to changes in taxes and interest rates
Topic 6.2
6.2. Business and the international economy
Objectives in this topic
6.2.1—The importance of globalisation
- reasons for globalisation: improved transport links, technological change including communication, free trade agreements, newly industrialised countries
- opportunities and threats of globalisation for businesses
- import tariffs and import quotas
- effects of import tariffs and import quotas on businesses
6.2.2—Multinational companies (MNCs)
- advantages to a business of becoming an MNC
- advantages for the country where an MNC is located, e.g. jobs, exports, increased choice, investment
- disadvantages for the country where an MNC is located, e.g. increased competition, environmental damage, exploitation of natural resources, repatriation of profits
6.2.3—External costs and benefits
- external costs and external benefits of business decisions
6.2.4—Exchange rates
- appreciation and depreciation of an exchange rate
- how changes in exchange rates can affect businesses which import and export products and services, e.g. price, costs, competitiveness Note: candidates will not be assessed on exchange rate calculations.
Topic 6.3
6.3. Business and the environment
Objectives in this topic
6.3.1—Environmental issues
- how business activity can negatively affect the environment, e.g. pollution, depletion of resources
- why businesses may respond to environmental issues, e.g. improved reputation, increased sales
- how businesses may respond to environmental issues
- effects of legal controls over business activity affecting the environment: how, what and where to produce or sell, influence on costs
Topic 6.4
6.4. Business and ethical issues
Objectives in this topic
6.4.1—Ethical issues
- ethical issues which may affect businesses, e.g. child labour, paying fair wages to employees, paying fair prices to suppliers, using suppliers who do not damage the environment
- how businesses may respond to ethical issues
- advantages and disadvantages of a business being ethical
Topic 6.5
6.5. Pressure groups
Objectives in this topic
6.5.1—The role of pressure groups
- how pressure groups can influence business decisions