2108A Revision (A2)

Which one of the following is NOT considered to be a likely benefit

of privatisation?

• Raises revenue for the state to fund other activities.

• Subjects the business to market forces and, therefore, improves efficiency.

• Enables the business to secure funds from stock markets.

• Increases the opportunities for making workers redundant.

Which one of the following is NOT considered to be a likely benefit

of free trade?

• It reduces the exposure of an economy to adverse changes in the world economy.

• Specialisation can lead to economies of scale.

• Increased competition encourages domestic industries to reduce costs.

• There is increased consumer choice.

One of the claimed benefits to a country of a multinational business

operating there:

• It will increase the level of imports into that country.

• Foreign managers will be employed.

• Total output in the economy should increase.

• The profits of the multinational may be taken out of the country.

Which one of these examples of external growth is a form of horizontal integration?

• An airline takes over an insurance company.

• A mining company takes over a manufacturer of earth moving equipment.

• A bank mergers with another bank.

• A clothing manufacturer mergers with a clothing retail business.

Which one of these examples of external growth is a form of forward vertical integration?

• An airline takes over an insurance company.

• A clothing manufacturer mergers with a clothing retail business.

• A bank mergers with another bank.

• A mining company takes over a manufacturer of earth moving equipment.

One of the benefits that is often claimed to result from integration between

two businesses is:

• redundancies

• bureaucracy

• synergy

• diseconomies

The most likely reason why some mergers and takeovers fail to result in the

expected benefits is:

• cultural clash

• economies of scale

• internal growth is slow

• higher coordination

Which one of the following is the most likely effect of a decision to

introduce technology in a small business manufacturing furniture:

• output will fall but quality will improve

• more employees will be needed but with fewer skills

• fewer workers will be needed but will require training

• less training will be needed as machines always operate automatically

Why do most countries pass laws to protect the employment

rights of workers?

• Governments are anti-business

• To reduce the costs of business

• To increase the costs of business

• Imbalance of power exists between employees and employers

What is the most likely benefit to business of strict health and

safety legislation being introduced to a country?

• A reduction in lost output that results from accidents at work.

• An immediate reduction in labour- training costs.

• A reduction in fines for failing to meet minimum standards.

• Wage costs will fall.