Economic issues
| English | Chinese | Pinyin |
|---|---|---|
| recession | 衰退 | shuāi tuì |
| business cycle | 经济周期 | jīng jì zhōu qī |
| boom | 繁荣 | fán róng |
| inflation | 通货膨胀 | tōng huò péng zhàng |
| unemployment | 失业 | shī yè |
| interest rates | 利率 | lì lǜ |
| currency | 货币 | huò bì |
| imports | 进口 | jìn kǒu |
| exports | 出口 | chū kǒu |
| exchange rates | 汇率 | huì lǜ |
The economy a business can't control
- A business can run itself well and still be hit by a recession 衰退, rising prices, or a rate change.
- These economic issues affect every business but lie outside its control.
External influences lab
Classify outside changes by the channel that hits the business.
During a recession, most businesses experience:
A recession cuts demand and sales.
The phase of the business cycle with falling output and rising unemployment is a ______.
A recession is the downturn phase.
The business cycle 经济周期
- The economy moves through boom 繁荣 → slowdown → recession → recovery.
- In a boom, demand and profits rise; in a recession, sales fall and firms may cut jobs.
Demand for most businesses rises in a boom and falls in a recession.
Inflation is most likely to:
Inflation pushes up costs and erodes spending power.
Higher interest rates tend to reduce consumer spending and borrowing.
Dearer borrowing cuts spending and demand.
Inflation 通货膨胀, unemployment 失业 and interest rates 利率
- Inflation (rising prices) raises a firm's costs and reduces customers' spending power.
- High unemployment means weaker demand but cheaper, easier hiring.
- Higher interest rates raise borrowing costs and cut spending.
How a stronger or weaker currency 货币 changes imports 进口 and exports 出口
A weaker domestic currency makes a firm's exports:
A weaker currency lowers the foreign price of exports.
Exchange rates 汇率
- A stronger currency makes exports dearer abroad and imports cheaper at home.
- A weaker currency makes exports cheaper (more competitive) and imports dearer.
The same change affects firms differently. A recession hurts a luxury shop but may help a discount store. Always link an economic change to the specific business.
You've got it
- the business cycle: boom → slowdown → recession → recovery
- inflation raises costs; higher interest rates cut spending; unemployment weakens demand
- a stronger currency hurts exporters; a weaker one helps them