The Role of an Entrepreneur

Which of the following is NOT an economic factor?

• Inflation

• Exchange Rates

• Taxation

• Political parties

When inflation rises, what TWO effects could occur on a business?

• Prices rise

• Costs of raw materials rise

• Profit margins rise

• Exchange rates rise

What happens when an exchange rate depreciates?

• Imports cheaper, exports dearer

• Imports cheaper, exports cheaper

• Imports dearer, exports dearer

• Imports dearer, exports cheaper

Why will a business benefit from an exchange rate appreciation?

• Cheaper imported raw materials

• Cheaper exported finished goods

• Cheaper workers

If interest rates fall, what would ASDA do?

• Take out a loan

• Pay back their debts

• Sell more machinery

If taxes fall, what TWO things would Tesco expect to see?

• A rise in sales

• A rise in profit margins

• Less customers

• A fall in competition

Risk can be defined as?

• events like these threaten the security of a business

• the possibility of damage, injury, or loss

• the kind of risk consists of hazards such as a fire or a hurricane, death of key employees, or customer injuries on the premises of the business.

Low unemployment rates mean that:

• consumers have more money to spend

• demand for luxury products will be low

• consumers have lower disposable incomes

Inflation is best described as:

• the number of people who are willing and able to work

• all those who have an interest in the running of a business

• a general rise in prices or the cost of living

• an increase in demand for a particular product

VAT stands for

• value asset tax

• value and time

• value added tax