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Theme 2 – The Wider Economic EnvironmentKey Terms List2.1 Business growth and competitive advantageEconomies of scaleInternal economies of scaleExternal economies of scaleMarket powerMarket shareDiseconomies of scaleCorporate cultureOrganic growthInorganic growthHorizontal integrationVertical integrationConglomerate integrationCompetitive advantageProduct innovationProcess innovationState fundingProduct lifecycleExtension strategyDigital economyViral marketingSocial mediaMicromarketingThe Long Tail!!!!Product differentiationUSPNiche market2.2 Firms, consumers and elasticities of demandPrice elasticity of demand (PED)Cost plus pricingPrice skimmingPenetration pricingPredatory pricingCompetitive pricingPsychological pricingSocial trendsNon-price competitionIncome elasticity of demand (YED)Inelastic demandElastic demandUnitary elasticityNormal goodInferior good2.3 Productive efficiencyProductivityLabour intensive productionCapital intensive productionCapacity utilisationFull capacitySpare capacityLean productionQuality controlQuality assuranceTotal Quality Management (TQM)KaizenJust In Time (JIT)Short product development lead time2.4 – Life in a global economyGlobalisationTrade liberalisationCapital market liberalisationTransnational companyBRICGDP per capitaHuman Development Index (HDI)Mean incomeMedian incomeTrading blocImportExportInvisible importInvisible exportExchange rateSPICEDEffective exchange rate2.5 – The economic cycleThe economic cycleBoomRecessionDepressionThe circular flow of incomeInjectionWithdrawalAggregate DemandC+I+G+(X-M)Aggregate supplyInflationDeflationDisinflationRPICPIDemand-pull inflationCost-push inflationReal valuesNominal valuesStructural unemploymentOccupational unemploymentGeographical unemploymentTechnological unemploymentDemand deficient / cyclical unemployment2.6 An introduction to macroeconomic policyEconomic objectivesBalance of paymentsFiscal policyMonetary policySupply-side policyExchange rate policyFloating exchange rateTrade-off ................
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