Economic Influences Quiz

What does inflation refer to?

• A general rise in prices

• A decrease in prices

• A stable price level

• A measure of unemployment

Which index measures changes in the prices of goods and services?

• Producer Price Index

• Consumer Price Index

• Retail Price Index

• Economic Growth Index

What happens to consumer spending habits during high inflation?

• They change to cheaper alternatives

• They stop spending altogether

• They remain unchanged

• They increase spending

What is the effect of a fall in the exchange rate on exports?

• Exports will fall

• Exports will rise

• Exports will remain the same

• Exports will become more expensive

What is the impact of rising interest rates on borrowing?

• Borrowers pay back less

• Borrowers pay the same

• Borrowers receive more interest

• Borrowers pay back more

What type of tax is VAT classified as?

• Income tax

• Corporate tax

• Indirect tax

• Direct tax

What is a characteristic of a recession?

• High consumer confidence

• Increasing unemployment

• High inflation

• Rising GDP

What happens to businesses during a boom?

• They focus on survival

• They delay spending decisions

• They look to expand and maximize profit

• They reduce production levels

How does increased taxation affect consumer behavior?

• Increases demand for products

• Has no effect

• Decreases disposable income

• Increases disposable income

What is the effect of currency appreciation on exporting businesses?

• Imports will likely decrease

• Costs are likely to rise

• Sales are likely to fall

• Sales are likely to rise