Inflation (definition), A rise in the average level of prices from one period to the next, Wage demands (high inflation), Workers need more money to maintain living standards, harder to expand, Higher costs (high inflation), Business costs increase, decreasing profit margins, harder to expand, Less competitive (high inflation), If inflation in Ireland is greater than export markets, reduces competitiveness, Employment (definition), Measures the percentage of people in the labour force from the population, Increased demand (high employment), High rates mean more income so more spending, good for expansion, Labour shortages (high employment), High rates mean some sectors may not have enough workers, harder, Wage demands (high employment), High rates mean workers can ask for more money as they are in demand, Interest Rates (definition), Refers to the cost of borrowing capital expressed as a percentage, Higher repayments (high interest), Existing loan repayments more costly, reducing ability to expand, Lower sales (high interest), Consumers have lower disposable income (higher mortgages, more costly loans), Lower business confidence (high interest), Higher rates usually leads to less investment as higher rates make borrowing more expensive, reducing demand in the economy., Economic Growth and Development (definition), Refers an increase in the value of goods and services produced in a country from one period to the next, development includes a structural shift in society, Increased spending (high economic growth), Economic growth boosts confidence leading to higher demand, Investment increase (high economic growth), Economic growth encourages investment as it boosts optimism for economy, Higher govt support (high economic growth), Economic growth leads to higher govt tax revenue, so supports can increase for businesses looking to expand (grants etc..), infrastructure…, Exchange Rates (definition), This is the cost of one currency expressed in terms of another currency, Competitiveness of exported goods, If the euro increases in value relative to the dollar ($) or pound (£), Irish exports become more expensive for foreign based buyers, Costs of imported raw materials, If the euro decreases in value relative to the dollar ($) or pound (£), imported raw materials will become more expensive, leading to higher operating costs, Uncertainty, Fluctuating exchange rates cause uncertainty and make planning more difficult, Consumer Confidence (definition), Measures optimism levels consumers feel about economy/personal finances, Higher spending (high consumer confidence), Optimism /financial security leads to more purchasing of goods and services, Increased Expansion (high consumer confidence), High confidence should lead to higher demand so business happy to expand, Easier to access capital (high consumer confidence), When consumers are confident, business owners and investors also feel optimistic, so more likely to seek investment opportunities to help expansion, Value of the business economy in Ireland, Turnover, Employment, Uses for Government, Uses for Business, Turnover (Value of the business economy), In 2023, the total value added from economic activities was €484 billion euro., Employment (Value of the business economy), In 2024, the total number of persons employed in Ireland was approx. 2,794,800, Uses for government (Value of the business economy), Helps plan for education and workforce training to align skills. Positive trends help attract FDI, Uses for business (Value of the business economy), Helps identify growing sectors and market opportunities. Helps benchmark performance against competitors and industry averages

Chapter 3 Key Takeaways

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