Business Environment Changes

What is one way businesses can adapt to technological change?

• By reducing the number of employees

• By updating their advertising methods

• By increasing product prices

• By ignoring e-commerce trends

Answer explanation

One way businesses can adapt to technological change is by updating their advertising methods. This allows them to reach new audiences and leverage digital platforms, ensuring they stay relevant in a rapidly evolving market.

Which of the following is an economic factor that can impact a business?

• New advertising methods

• Interest rates

• Packaging design

• Employee training

Answer explanation

Interest rates are a key economic factor that can influence borrowing costs and consumer spending, directly impacting a business's financial performance. The other options relate more to marketing and operations.

How might new legislation affect a business?

• By decreasing the need for technology

• By increasing the costs due to changes in minimum wage

• By reducing the importance of customer service

• By eliminating the need for marketing

Answer explanation

New legislation, such as changes in minimum wage, can increase operational costs for businesses. This directly impacts their financials, making the choice "By increasing the costs due to changes in minimum wage" the correct answer.

What is a potential impact of environmental expectations on businesses?

• Increased use of non-renewable resources

• Reduced focus on product quality

• Changes in how products are packaged and transported

• Decreased importance of customer feedback

Answer explanation

Environmental expectations often lead businesses to adopt sustainable practices, resulting in changes to how products are packaged and transported to minimize waste and carbon footprint.

What does GDP stand for in economic terms?

• Gross Domestic Product

• General Domestic Policy

• Global Development Plan

• Government Debt Payment

Answer explanation

GDP stands for Gross Domestic Product, which measures the total economic output of a country. The other options do not accurately represent this key economic indicator.

Which of the following is an example of m-commerce?

• Shopping in a physical store

• Buying products through a mobile app

• Reading a newspaper advertisement

• Watching a TV commercial

Answer explanation

M-commerce, or mobile commerce, refers to buying and selling products through mobile devices. Therefore, 'Buying products through a mobile app' is the correct example, as it involves transactions via a mobile platform.

How can inflation affect a business?

• By decreasing the cost of raw materials

• By increasing the purchasing power of consumers

• By raising the prices of goods and services

• By stabilising the economy

Answer explanation

Inflation typically leads to higher prices for goods and services, which can increase costs for businesses and affect their profitability. Thus, the correct answer is that inflation raises the prices of goods and services.

What is the effect of higher disposable income on consumer behaviour?

• Consumers save more and spend less

• Consumers are less likely to buy luxury items

• Consumers have more money to spend on goods and services

• Consumers become more price-sensitive

Answer explanation

Higher disposable income allows consumers to have more money available, leading them to spend more on goods and services. This directly supports the correct choice that consumers have more money to spend.

Which of the following is a technological change that businesses need to consider?

• Changes in tax laws

• Advances in production technology

• Fluctuations in currency exchange rates

• Shifts in consumer demographics

Answer explanation

Advances in production technology are crucial for businesses as they can improve efficiency, reduce costs, and enhance product quality, making it a key technological change to consider.

Why is it important for businesses to be aware of ethical issues?

• To reduce production costs

• To improve employee satisfaction

• To meet customer expectations and maintain a positive brand image

• To increase the complexity of their supply chain

Answer explanation

Being aware of ethical issues helps businesses meet customer expectations and maintain a positive brand image, which is crucial for long-term success and customer loyalty.