LO5 - Y10 VCert

If the rate of VAT increased from 20% to 25%, business costs would...

• Increase because stock and raw materials from suppliers would become more expensive

• Decrease Increase because stock and raw materials from suppliers would become cheaper

What is VAT?

• An indicator which shows how many people are employed in a country

• A tax paid on goods and services

• A type of bank loan

• A tax paid on income

An increase in disposable income in the UK would mean that consumer spending would...

• Decrease because people would have less money

• Increase because people would have more money

Corporation Tax is paid by...

• Limited Companies

• Sole traders

• Partnerships

• All of the above

Sole traders must pay

• Income tax

• Corporation tax

• Sole trader tax

An increase in competition can mean that business costs have to...

• Decrease

• Increase

• Stay the same

Which of these changes in the external environment would have the most POSITIVE impact on businesses...

• An increase in VAT from 20% to 25%

• A decrease in interest rates from 5% to 2.5%

• An increase in the rate of Income Tax from 20% to 25%

An increase in interest rates from 1.5% to 5% might mean that... (choose 2 answers)

• Consumers spend more because loans become cheaper

• Consumers spend less because loans are more expensive and they would rather keep money in the bank

• Businesses are less likely to invest in growth because loans are more expensive

• Businesses are more likely to invest in growth and expansion because loans become cheaper

If unemployment in a country is high this means that the average level of disposable income consumers have will…

• Increase

• Decrease

If inflation is rising this means that…

• The price of goods and services stays the same

• The price of goods and services is increasing slower

• the price of goods and services is falling

• The price of goods and services is increasing quicker