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Business Studies IGCSEPDF 180
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Exam Tips:
Whenanswering exam questions:
Key Points to Remember
● Every economy experiences these fluctuations — the length and intensity of each
stage can vary.
● The government often intervenes with fiscal or monetary policies to reduce the
severity of recessions and slumps.
● Businesses must adapt their strategies depending on which stage of the cycle
they are in.
○ During growth and boom → expand and invest.
○ During recession and slump → cut costs and focus on survival.
“During a recession, falling demand and rising unemployment cause firms to cut
production and delay expansion plans. This reduces GDP and may lead to a
further decline in business confidence.”
● Remember that economic conditions and policies are all interconnected; one
change will lead to an effect which will lead to another effect and so on, like a
chain reaction in many different ways. In your exams, you should take care to
explain those effects that are relevant and appropriate to the business or economy
in the question.
● How might businesses react to policy changes? It will depend on how much
impact the policy change will have on the particular business/industry/economy.
Here are a few examples:
●
Always link each stage to its impact on businesses, employment, and consumers.
●
Use keywords such as “GDP,” “unemployment,” “inflation,” and “consumer
confidence.”
● Example answer: