Unit 1.5.4 Economy and Business

If the economy is growing, the economic climate is _______.

• Positive

• Negative

When unemployment is high, businesses are affected because?

• Less potential employees in the market which they can recruit

• They will have to pay employees more

• More potential employees in the market which they can recruit

• People have more money to spend

If inflation increases and wages do not rise at the same rate, what happens to consumer spending power?

• Increases

• Decreases

• Remains the same

What typically happens when consumers have high levels of income?

• The number of products purchased goes down

• Consumers have more money to spend

• The number of products purchased goes up

• Consumers have less money to spend

The interest rate set by the Bank of England is known as?

• The minimum rate

• The charge rate

• The bank rate

• The base rate

When interest rates are low, people are more likely to ______ their money.

• Save

• Spend

VAT stands for?

• Very Allowable Tax

• Value Adjusted Tax

• Value Added Tax

• Virtual Added Tax

Which type of government tax do individuals pay to cover their state pension?

• National insurance

• Income tax

• Excise duties

• Council tax

The measure of the value of one currency in another currency is known as?

• Excise duties

• Business rates

• VAT

• Exchange rate

If a business has £300 and the exchange rate is £1 = $1.25, what is the £300 worth in dollars?

• $325

• $352

• $357

• $375