28 Economy

If The Bank of England were to cut interest rates, what would be the most likely change in the economy?

• There would be lower levels of consumer spending and inflation would fall.

• The cost of borrowing falls and this encourages more consumer spending.

• The cost of borrowing rises and this encourages less consumer spending.

• Consumers would be more likely to put their money in the bank to earn interest.

What is the correct definition of consumer spending?

• The total spent by all shoppers throughout the country.

• Goods produced in one country but sold overseas, for example, a British-made Mini sold in France.

• A downturn in sales and output throughout the economy, often leading to rising unemployment.

• Money created.

What is the correct definition of a recession?

• The total spent by all shoppers throughout the country.

• Goods produced in one country but sold overseas, for example, a British-made Mini sold in France.

• Two consecutive falls in Gross Domestic Product (GDP).

• The Bank of England deciding to print more money.

What is the correct definition of Exports?

• The total spent by all shoppers throughout the country.

• Goods produced in one country but sold overseas, for example, a British-made Mini sold in France.

• A downturn in sales and output throughout the economy, often leading to rising unemployment.

• Goods produced in one country but sold domestically to the cunties own consumers.

Which of the following is most likely cause of an increase in sales for businesses nationally?

• An increase in inflation

• Higher average incomes

• A fall in consumer confidence

• An increase in income tax

Which of the following is most likely to cause a fall in sales figures nantionally?

• Lower raw material costs

• Higher average incomes

• A fall in inflation

• A fall in consumer confidence

Which of the following is a tax on company profits?

• Income tax
• Corporation tax
• VAT
• Money created

If the value of the £ (pound) falls against the $ (dollar), which two of the following are the most likely consequences?

• British made goods have become cheaper to Americans, so exports to America are likely to increase.

• British made goods have become more expensive to Americans, so exports to America are likely to fall.

• American made goods have become more expensive to us, so imports from America are likely to fall.

• American made goods have become cheaper to us, so imports from America are likely to rise.

A jumper is made in the UK and sold in the USA. To the American economy, what is this an example of?

• An import
• An export
• A tariff
• Money created

Which of the following is a tax on imports?

• VAT
• A tariff
• Corporation tax
• Money created