Section 6: External Influences on Business

1. What is the business cycle?

• A. The flow of income into a business
• B. The ups and downs of the economy
• C. The process of starting a new business
• D. The cycle of hiring and firing employees

2. Which of the following is a feature of the growth phase of the economic cycle?

• A. Falling GDP and rising unemployment

• B. Increasing interest rates and high inflation

• C. High consumer confidence and increased business investment

• D. Decreasing levels of government spending and budget deficits

3. Which of the following is a common characteristic of the slump phase of the business cycle?

• A. High unemployment rates

• B. High levels of economic growth

• C. Increase in consumer spending

• D. Expansion of business activity

4. Which of the following is a direct tax?

• A. Value Added Tax (VAT)
• B. Corporation Tax
• C. National Insurance contributions
• D. Import duties

5. Which of the following is not an environmental concern for businesses?

• A. Climate change
• B. Pollution
• C. Deforestation
• D. Competition

6. Which of the following is an ethical concern for businesses?

• A. Reducing costs
• B. Maximizing profits
• C. Treating employees fairly
• D. Increasing market share

7. What is one advantage of globalisation?

• A. Increased competition
• B. Higher prices for consumers
• C. Greater cultural diversity
• D. Fewer employment opportunities

8. What is a multinational corporation?

• A. A business that operates in multiple industries

• B. A business that operates in multiple countries

• C. A business that is owned by multiple shareholders

• D. A business that is publicly traded

9. What is an exchange rate?

• A. The price of goods and services in a foreign country
• B. The amount of money a business earns in a year
• C. The value of one currency in relation to another
• D. The cost of borrowing money

10. What is inflation?

• A. A rise in the general price level of goods and services
• B. A decline in the general price level of goods and services
• C. A rise in the level of unemployment
• D. A decline in the level of economic growth