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Business & the Economy

Total questions: 11

Worksheet time: 6mins

Name
Class
Date
1.

A labour force of 20 million people has 18.5 million people employed. Find the unemployment rate.

a)

10%

b)

8.5%

c)

6%

d)

7.5%

2.

What is the unemployment?

a)

Decisions to work based on each individuals' valuation of their own work

b)

Proportion of younger workers in the labour force

c)

The situation of actively looking for employment but not being currently employed.

d)

A person who is simultaneously an income earner,

3.

If a change in income appears permanent such as being promoted to a secure and high paying job, __________________.

a)

Then people are likely to spend more.

b)

Then people are likely to spend less.

c)

Then people are likely to save more.

d)

Then people are likely to save less.

4.

Which of following best describes the term interest rate?

a)

The cost of borrowing money or reward for saving money

b)

The price of one currency against another

c)

The reward for borrowing money or cost of saving money

d)

The value of goods and services bought by consumers

5.

Which is true in relation to the rate of inflation? Business costs are:

a)

More likely to stay the same if the rate of inflation rises

b)

More likely to decrease if the rate of inflation rises

c)

More likely to increase if the rate of inflation rises

d)

More likely to increase if the rate of inflation falls

6.

Which of the following businesses is most likely to experience a rise in demand as consumer income falls?

a)

A producer of chocolate

b)

A specialist bakery selling luxury products

c)

Travel agent

d)

A department store selling discounted goods

7.

What is the most likely impact of rising unemployment levels on a business selling luxury goods?

a)

Falling sales and falling profit

b)

Falling sales and rising profit

c)

Rising sales and falling profit

d)

Rising sales and rising profit

8.

What is true of a UK importer of goods from Italy, if the value of the pound becomes weaker against the euro?

a)

Sales increase and profit increases

b)

Sales decrease and profit increases

c)

Sales increase and profit decreases

d)

Sales decrease and profit decreases

9.

A business has borrowed money from a bank with an overdraft. If interest rates rise, the impact on the business will be:

a)

Costs increase and profit decreases

b)

Costs decrease and profit increase

c)

Costs decrease and profits decrease

d)

Costs increase and profit increase

10.

If the government increases the rate of corporation tax, companies are likely to:

a)

Pay less tax and invest less into the business

b)

Pay more tax and invest less into the business

c)

Pay more tax and invest more into the business

d)

Pay less tax and invest more into the business

11.

Which describes the term exchange rate?

a)

The price of one currency against another

b)

The reward for saving money and cost of borrowing money

c)

The profit made from exporting goods and services

d)

The sales made from importing goods and services