1.5.5 External influences

Changes in which of the following external influences is most likely to have led to the development of online businesses such as travel agents?

• Technology
• Interest rates
• Legislation
• Exchange rates

Which of the following best describes the term economic climate?

• Factors inside the business that influence its activities
• The measurement of whether the production and consumption of goods is strong or poor in a specific country or region
• Government rules and regulations that affect business activity
• Buying and selling goods electronically

When the economic climate is strong, businesses that have high demand for their products are likely to:

• Hire fewer staff and invest more
• Hire fewer staff and invest less
• Hire more staff and invest more
• Hire more staff and invest less

If the pound becomes weaker, a UK importer may experience:

• An increase in sales and costs
• A decrease in sales and costs
• An increase in sales and a decrease in costs
• A decrease in sales and an increase in costs

Rising inflation is an example of a change in:

• Legislation
• Technology
• Government taxation
• The economic climate

Legislation designed to reduce landfill aims to encourage businesses to:

• Decrease their levels of recycling and send more to landfill
• Decrease their levels of recycling and send less to landfill
• Increase their levels of recycling and send more to landfill
• Increase their levels of recycling and send less to landfill

A business that operates in a competitive environment is most likely to reduce prices when the economic climate is:

• Weak and consumer spending is high
• Weak and consumer spending is low
• Strong and consumer spending is high
• Strong and consumer spending is low

Changes in which external influence has meant that UK businesses have to pay employees the national minimum wage?

• Technology
• Economic climate
• Legislation
• Changes in lifestyle

As unemployment levels fall, in order to recruit the best staff, businesses might respond by:

• Decreasing wage rates to reduce costs
• Decreasing wage rates to reduce profit levels
• Increasing wage rates to increase staff retention
• Increasing wage rates to lower staff retention

When the economic climate is weak, businesses which are experiencing a fall demand for their products might:

• Reduce prices and spend less on product development
• Reduce prices and spend more on product development
• Increase prices and spend less on product development
• Increase prices and spend more on product development