Business: the influence of Government

A business that is operated by the government is called a ......

• PLC

• Limited company

• Public corporation

• Sole trader

Which of the following services is often provided by the government?

• Mobile data

• Education

• Fast food

• Holidays

Which countries usually spend the most on public services?

• Developing countries

• Emerging countries

• Developed countries

Which TWO the following are direct taxes?

• Income tax

• VAT

• Tax on fuel

• Corporation tax [tax on company profits]

Why do businesses usually prefer low rates of corporation tax?

• They make more profit before tax

• They make more profit after tax

If the government increases VAT on goods, will most businesses increase their prices?

• Yes

• No

Give a reason why businesses may prefer taxes on incomes to be low

• They do not have to pay them

• Low income tax means less money spent on services

• Customers will then have more money to spend

What is the name of the government's policy on taxation and spending?

• Welfare policy

• Monetary policy

• Fiscal policy

Multinational companies are more likely to locate production in countries with..

• Low taxes

• High taxes

Governments set interest rates. Give TWO reasons why this is important for businesses

• The interest rate affects the currency's exchange rate

• Businesses dislike taxes

• Businesses often dislike high government spending

• Businesses often borrow money to pay for investment