AP®︎ Business with Personal Finance: Topic 1.3 Flashcards

The external political, economic, social, technological, environmental, and legal conditions that affect businesses and markets

A framework for evaluating how political, economic, social, technological, environmental, and legal factors affect a particular market or business

A business’s ability to obtain resources, operate legally, reach customers, and generate enough revenue relative to costs to continue over time

The extent to which a market’s external conditions create favorable opportunities relative to risks for a particular business model

An existing external condition or possible external change that could harm a business’s ability to operate or meet its goals

Government policies and political dynamics that affect market activity, including trade policy, taxes, subsidies, mandates, bans, and political stability

Government financial support that encourages an activity by lowering effective costs or increasing customer demand

A government requirement for an activity or outcome that may create compliance-related demand while raising costs for affected businesses

A government prohibition or restriction that can eliminate a legal market or require changes to products, materials, or operations

Government charges that fund public activities and can raise costs, increase customer prices, or discourage taxed activities

Government policy affecting cross-border trade, including tariffs, restrictions, and agreements that change the cost or availability of goods and resources

The predictability and continuity of government and public institutions, which generally make long-term planning and investment less risky

Conditions in the broader economy that affect market activity, including economic stability, household income, inflation, unemployment, and interest rates

Predictable economic performance that supports confidence, purchasing, planning, and long-term commitments by households, businesses, and governments

A broad increase in prices that can raise business input costs and reduce consumers’ purchasing power

An economic condition that can reduce household spending when high while increasing worker availability; low unemployment can make hiring costlier

The cost of borrowing; higher rates make business financing and financed customer purchases more expensive, while lower rates make borrowing more affordable

Trends in society and culture that affect consumers and market activity, including demographics, cultural norms, lifestyle trends, and population growth

Population characteristics such as age, household composition, education, occupation, and income distribution that shape customer groups and their needs

Shared expectations and accepted patterns of behavior that influence which products consumers consider appropriate, valuable, or trustworthy

Changes in how people live, work, spend time, and make purchases that can create opportunities for some businesses and reduce demand for others

The pace at which a population grows or declines, affecting the potential number of customers and workers in a market

Market features involving the availability and development of technology for production, distribution, communication, and other business activities

The use of technology to perform production or operational tasks, potentially increasing efficiency while changing labor, investment, training, and maintenance needs

The loss of value or usefulness of equipment, skills, or products when newer technology emerges

Natural and external environmental conditions affecting markets, including geography, climate, resources, disasters, waste management, and environmental perspectives

The systems and policies for handling by-products, packaging, hazardous materials, and discarded products, which affect operating costs and feasibility

Customers’ environmental values, such as preferences for lower emissions, recyclable packaging, local sourcing, or reduced waste, that influence purchasing decisions

Specific binding laws, rules, and regulations that determine whether business activities are legal and what compliance costs they create

Laws governing hiring, compensation, scheduling, workplace treatment, and other employer responsibilities

Laws requiring fair transactions, accurate information, product safety, or customer remedies in the marketing and sale of products

Laws establishing safety standards for workplaces, products, facilities, and services, often requiring training, inspections, sanitation, or protective procedures

Binding rules limiting pollution, resource use, waste disposal, or other environmental effects of business activity

Legal protection for inventions, original works, brands, and other intellectual assets against unauthorized use or copying

Laws intended to protect competition by restricting business conduct that improperly eliminates rivals or controls a market

Define the business opportunity, identify relevant PESTEL facts, explain their causal effects, consider interactions and changes, and reach a business-specific conclusion

Consumers’ ability to buy products; higher or rising income can support premium and discretionary purchases, while lower or falling income can shift demand toward lower-cost alternatives

The availability, reliability, and cost of internet service needed for communication, transactions, digital services, and coordination with employees and suppliers

How quickly products and operating methods change, creating opportunities for new products and efficiency while increasing the risk of obsolescence

A location’s physical position and features, which affect access to customers, suppliers, workers, transportation, water, energy, and other resources

A location’s temperature, rainfall, storms, and seasonal conditions, which can affect operations, demand, transportation, and business costs

The availability of replenishable resources and finite resources needed to support particular industries and production processes

Environmental events that can damage facilities, interrupt production and distribution, restrict customer access, and create shortages or new demand