External Influences test questions

Which of the following is an example of an economic external influence?

• Increase in interest rates

• Increase in the national minimum wage

• Increased availability of wi-fi

• Bad weather

Answer explanation

An increase in interest rates means it costs more to borrow money. This puts pressure on a business to repayits loans quickly.

Which of the following is an example of a political external influence?

• Increase in interest rates

• Increase in the national minimum wage

• Change in lifestyle

• Competitors launch a new advertising campaign

Answer explanation

An increase in the national wage is a political external influence as the government decides to change the wage. Other examples include change in legislation or in tax rates

Which of the following is an example of a social external influence?

• Recession

• Bad weather

• Changes in fashion trends

• Competitors launch a new advertising campaign

Answer explanation

Change in fashion and trends are influences involving the people who use the business, which makes them and example of a social external influence.

Which of the following is an example of a technological external influence?

• Competitors launch a new advertising campaign

• Increased availability of mobile technology

• Recession

• Environmental

Answer explanation

Increased availability of mobile techological external influences as businesses have a new way to interact with customers.

Which of the following is an example of an environmental external influence?

• Decrease in tax rates

• Boom

• Recession

• Bad weather

Answer explanation

Bad weather is an environmental external influence that mighthave an impact on a business. For example, deliveries may be delayed.

Which of the following is an example of a competitive external influence?

• Recession

• Increased availability of mobile technology

• A shop selling similar products reduces its prices

• Increase in interest rates

Answer explanation

Most busineses will be affected by competition from other companies selling the same or similar products or services. Competition may lead a business to decrease prices or increase advertising.

Which external factor includes changes in the law?

• Economic

• Environmental

• Political

• Technological

Answer explanation

The government is in charge of running teh country and can ofter make decisions that have an effect on a business. Examples include making changing to legislation.

Which external factor is influenced by the people who use the business?

• Political

• Social

• Technological

• Decrease in tax rates

Answer explanation

Social factors such as buying habits, religion, wealth, famili size and structure have an influence on people are using the business.

Which external factor might lead to increased recycling and reduced packaging?

• Economic

• Competitive

• Environmental

• Fashion and trend

Answer explanation

Environmental pressures might lead business to increase recycling and reduce packaging.

Which external factor includes other businesses that offer the same product or service?

• Social

• Competitive

• Environmental

• Bad weather

Answer explanation

Competitive factors describe competition from other businesses selling similar products or services.