External Influences on businesses I: Starter activities

When businesses in an economy of a country employ more and more workers, what will likely happen to employment and unemployment level in the economy?

• Unemployment level will start rising while Employment level will start falling

• Unemployment level will remain unchanged (constant) while Employment level will be rising

• Employment level will start rising while Unemployment level will start falling

• Employment level will remain unchanged while Unemployment level will start rising

As businesses increase their workforce (the number of workers hired to work), what is generally likely to happen to the total (entire) output level of goods and services in the economy?

• Total output level will start falling

• Total output level will start rising

• Total output level will remain unchanged (constant)

• Total output level will neither rise nor fall

When total output level in the economy start rising, (as a result of falling unemployment or rising employment level), what will possibly happen to the value (worth) of the entire output level of goods and services produced in the economy?

• Value of the economy's output level will start rising

• Value of the economy's output level will start falling

• Value of the economy's output level will remain constant

• Value of the economy's output level will neither rise nor fall

Income level in the economy will increase as total output level increases? TRUE or FALSE

(a)  

As output level of goods and services of businesses increase (due to rising employment or falling unemployment), what will likely happen to the amount of sales of these businesses?

• Amount of sales will fall

• Amount of sales will rise

• Amount of sales will remain constant

• Amount of sales will nether rise nor fall

Income level (to businesses and workers) will increase due to rising value of total output level in the economy?

TRUE or FALSE?

(a)  

When businesses experience rising income levels (due to increase in the amount of sales), what will likely happen in these businesses?

• These businesses will increase their spending on input (factors of production) in order to produce more output and expand the business

• These businesses will refuse to employ more resources (factors of production) because their costs of production will increase and they will not expand

• These businesses will reduce their spending on inputs (factors of production), be able to produce more and expand

• These businesses will keep their spending the same not minding the rising income levels, keep producing the same output level and save the excess income

When all these businesses in the economy increase their spending (demand) for scarce resources (factors of production which is limited in supply), what will happen to the COST OF THESE SCARCE RESOURCES and BUSINESS COSTS generally?

• decrease, decrease

• Increase, decrease

• decrease, Increase

• Increase, Increase

Rising demand for scarce resources by businesses and the increase in the price of these resources and cost of business will lead businesses to do what?

• Reduce the price of their products

• Keep the price of their products unchanged

• Shutdown the business

• Increase the price of their products

When businesses shifts the high costs of production in the form of higher prices for their products, this higher prices fixed may result into what? (in the wider economy)

• Fall in the average price level of goods and services overtime (Deflation)

• Rise in the average price level of goods and services overtime (Inflation)

• Average price level will remain constant

• Average price level will fluctuate (change almost frequently)