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WorksheetsAQA Y2 3.7 Revision
Total questions: 101
Worksheet time: 3hrs 30mins
If a change in income appears permanent such as being promoted to a secure and high paying job, __________________.
then people are likely to consume less.
then people are likely to save more.
then people are likely to consume more.
then people are likely to save less.
Which of following best describes the term interest rate?
The price of one currency against another
The cost of borrowing money or reward for saving money
The value of goods and services bought by consumers
The reward for borrowing money or cost of saving money
Which is true in relation to the rate of inflation? Business costs are:
More likely to increase if the rate of inflation rises
More likely to stay the same if the rate of inflation rises
More likely to increase if the rate of inflation falls
More likely to decrease if the rate of inflation rises
Which of the following businesses is most likely to experience a rise in demand as consumer income falls?
Travel agent
A producer of chocolate
A department store selling discounted goods
A specialist bakery selling luxury products
What is the most likely impact of rising unemployment levels on a business selling luxury goods?
Falling sales and rising profit
Rising sales and falling profit
Falling sales and falling profit
Rising sales and rising profit
What is true of a UK importer of goods from Italy, if the value of the pound becomes weaker against the euro?
Sales increase and profit increases
Sales decrease and profit increases
Sales increase and profit decreases
Sales decrease and profit decreases
A business has borrowed money from a bank with an overdraft. If interest rates rise, the impact on the business will be:
Costs increase and profit decreases
Costs decrease and profit increase
Costs increase and profit increase
Costs decrease and profits decrease
If the government increases the rate of corporation tax, companies are likely to:
Pay more tax and invest more into the business
Pay more tax and invest less into the business
Pay less tax and invest more into the business
Pay less tax and invest less into the business
If the government increases the rate of corporation tax, companies are likely to:
Pay more tax and invest more into the business
Pay more tax and invest less into the business
Pay less tax and invest more into the business
Pay less tax and invest less into the business
Which describes the term exchange rate?
The reward for saving money and cost of borrowing money
The sales made from importing goods and services
The profit made from exporting goods and services
The price of one currency against another
What is most likely to be true if the rate of inflation rises sharply? Businesses are:
More likely to to manage rising costs
More likely to reduce selling prices
Less likely to manage rising costs
Less likely to raise selling prices
When an economy becomes weaker, interest rates are often reduced meaning consumers are likely to:
Save more and spend less
Save less and spend more
Save more and spend more
Save less and spend less
Which is true for a UK exporter of goods to Portugal, when the pound becomes stronger against the euro?
Exports will become less expensive
Profits are likely to increase
Exports will become more expensive
Exports sales are likely to increase
Which two are potential advantages to a business which sells luxury products of high levels of employment?
Business costs increase as wages and salaries rise
Increase in sales levels
Fewer potential employees will be available
Consumer incomes will increase
Staff turnover will increase
Which are most likely to be true if interest rates fall for a new business?
Loans become less expensive
Costs may increase
More likely to save money
Less likely to invest
Costs may decrease
The total value of all final goods and services produced in a country in a given year.
Gross Domestic Product
Consumer Price Index
Inflation
Unemployment
Economic growth measures the
a) Growth of productivity
b) Increase in nominal income
c) Increase in national output
d) None of the above
A sustained general increase in prices across an economy.
Disinflation
Consumer Price Index
Deflation
Inflation
A period of macroeconomic expansion or growth, followed by a period of contraction, or decline.
Business Cycle
Circular Flow
Equilibrium
GDP
In a recession, GDP
a) Shrinks
b) Grows slowly
c) Grows by 0%
d) Grows rapidly
The business cycle is made up of how many phases?
5
4
3
2
Which of the following demonstrates the impact of a weak pound on a UK business that imports raw materials and exports finished goods?
Imported raw materials dearer and exported finished goods cheaper
Imported raw materials cheaper and exported finished goods cheaper
Imported raw materials dearer and exported finished goods dearer
Imported raw materials cheaper and exported finished goods dearer
Which of the following is a feature of a weak economic climate?
High levels of consumer spending
Low levels of consumer spending
High levels of employment
Low levels of unemployment
Which of following is most likely to occur as interest rates fall?
Sales of luxury products increase
Sales of essential products increase
Sales of luxury products decrease
Sales of essential products decrease
when there is period of prolonged economic growth, this is called a:
boom
recession
slump
recovery
Tax on company's profit is known as
gift tax
income tax
capital gains tax
corporation tax
What do the letters GDP stand for?
(a)
What are the two Es in the acronym PESTLE?
Enterprise and Environment
Environment and Education
Economic and Enterprise
Economic and Environmental
In the economic cycle the order of the phases is
Boom, recovery, recession, slowdown
Boom, slowdown, recession, recovery
Boom, recession, recovery, slowdown
Boom, recovery, slowdown, recession
All businesses suffer falling profits in a recession
True
False
Two features of an economic boom are
Deflation and rising unemployment
Labour shortages and inflation
Rising business investment and low consumer confidence
Rising profit levels and falling wage rates
Profit is
Another name for revenue
Revenue plus costs
The income earned from sales
Revenue minus costs
Monetary Policy relates to decisions about...
Interest rates & taxes
Taxes & government spending
Interest rates & the money supply
Government spending & the money supply
When interest rates are cut, which of the following should happen (in theory)? Tick all the correct answers...
Households spend less as there is a greater incentive to save.
Firms spend more as it is cheaper to take out a bank loan.
Households spend more as their monthly mortgage payments are lower (variable rate mortgages).
Households spend more as there is less incentive to save.
Fiscal or Monetary Policy: Increase taxes on individuals and businesses
fiscal
monetary
Expansionary or Contractionary: decrease taxes on individuals and businesses
expansionary
contractionary
Expansionary or Contractionary: government spends more
expansionary
contractionary
Which of the following is not a tool of fiscal policy?
Taxing
Spending
Interest Rates
Market capitalisation = number of shares issued :
X current share price
+ current share price
- current share price
divided by current share price
Changes in UK economic growth affect a firm more if :
Demand is income inelastic
Demand is income elastic
Coca-Cola aims to ‘refresh the world – in body, mind and spirit’. This declaration is Coca-Cola’s:
tactic
objective
strategy
mission
Which one of the following is not a suitable corporate objective? By the end of 2018 a business intends to:
achieve a turnover of at least £2bn (an increase of 25%)
become the best car maker in the UK
increase the customer base by 20%
restore return on capital employed (profitability) back to 18%
To calculate the financial ratio known as ‘payables days’ the best formula is:
(a)
The balance sheet of an automotive parts supplier shows that it has a current ratio of 0.8:1. Current assets total £12m. This means that current liabilities are shown on the balance sheet as:
(a)
Who researched and produced a business model that translates corporate mission and strategy into a set of measures that assesses performance from four perspectives?
Carroll and Moulton
Hackman and Oldham
Kaplan and Norton
Bartlett and Ghoshal
Which of these financial ratios can be calculated from only figures that are presented in a business balance sheet?
inventory turnover
receivable days
gearing
return on capital employed
Which of the following is a problem that a business may experience when using financial data to make decisions? Figures are:
Reliable
Unbiased
Accurate
Out of date
The letters SWOT stand for:
Sudden Weaknesses Outstanding Threats
Strengths Weaknesses Opportunities Threats
Social Ways of Overcoming Threats
Strengths Weaknesses Outsiders Threats
Making a profit
S
W
O
T
Poor quality goods
S
W
O
T
Negative publicity
S
W
O
T
Overseas demand for product
S
W
O
T
Which of the following is an example of an external threat in a SWOT analysis?
Having a well motivated workforce
Outdated technologies that are expensive to replace
Innovative breakthroughs held by competitors
Lack of management control
What does the 'E' in PESTLE analysis stand for?
Political
Economic
Social
Technological
What does the 'P' in PESTLE analysis stand for?
Political
Economic
Social
Technological
Which elements are EXTEARNAL (outside of the business)?
weaknesses and strengths
opportunities and strengths
opportunities and threats
strengths and weaknesses
Which elements are INTERNAL (inside the business)?
opportunities and threats
strengths and weaknesses
strengths and opportunities
weaknesses and threats
High rate of inventory turnover would tell us that...
Products are selling quickly and are not stored for long
Products are selling slowly and are therefore in storage for a while
Money owed by a business to its creditors is called "Trade (a) "
200 / 90
35 / 65
65 / 90
65 / 35
Trade payables is classified as :
a current asset
a non-current liability
a current liability
a current liability
Inventory =
inventions
stock
customer list
waste
Vehicles, equipment, machinery are all classed as :
Non-current assets
Current assets
Non-current liabilities
Current assets
It measures the ability of the business to pay its current trade payables.
Solvency
Liquidity
Activity
The gross profit ratio formula is
operating profit / expenses x 100
gross profit / revenue
gross profit / revenue x 100
gross profit / cost of sales x 100
Price = £12 per unit, Sales = 500 units and the total variable costs are £1500
unit contribution = £12
unit contribution = £9
unit contribution = £6
unit contribution = £10.50
profit variance = £5m
profit variance = £16m
profit variance = £27m
profit variance = £2m
Which of the below is correct ?
revenue variance is adverse
labour costs variance is adverse
material costs variance is favourable
profit variance is favourable
current ratio = 0.5
current ratio = 2
current ratio = 1.87
current ratio = 0.53
Profit for the year (net profit) margin =
400 / 4000 x 100 = 10 %
400 / 5000 x 100 = 8 %
400 / 1000 x 100 = 40 %
400 / 8000 x 100 = 5 %
Improve profitability by :
increasing costs
reducing revenue
reducing costs
cutting selling price
Profitability ratios include :
gearing
current
return on capital employed
stock (inventory) turnover
The gearing ratio assesses
how much of the capital is from loans
how quickly credit customers pay up
how quickly suppliers are paid
profitabilitiy
A high gearing ratio is a problem if :
interest rates fall
interest rates rise
working capital is high
current ratio is high
Calculate the Gearing Ratio based on the data given to two decimal places.
16.4%
164%
62.22%
62.2%
Current Ratio
Current Assets - Current Liabilities
Current Assets + Current Liabilities
Current Assets / Current Liabilities
Current Assets / Total Assets
This formula calculates...
Gearing Ratio
Return on Capital Employed (ROCE)
Current ratio
Acid test ratio
Which of the following would reduce gearing?
Offering customers longer trade credit terms
Reducing inventories to lower the bank overdraft
Launching a new product portfolio
Issuing new share capital to pay off long-term debt
Each of these actions should reduce gearing, except one. Which is the odd one out?
Raise finance through a share issue
Convert the bank overdraft into a bank loan
Convert part of a bank loan into shares
Retain profits rather than pay out as dividends
How should ratios be compared so that the comparisons are most useful. Select all that apply
With historical results from the same company.
With firms with different working capital needs and profit margins
With the most profitable firms in the world
With firms with similar working capital needs and profit margins
Which law would be broken if an employee refused to wear safety equipment provided by the business?
Equality Act (2010)
Health and Safety at Work Act (1974)
Consumer Rights Act (2015)
Trades Description Act (1968)
Which of the following laws prevents employees being discriminated against on the basis of characteristics such as gender and race?
Equality Act (2010)
Health and Safety at Work Act (1974)
Consumer Rights Act (2015)
Trades Description Act (1968)
Which of the following is a drawback to a business of behaving in an environmentally responsible way?
Sales increase due to positive public image
Brand reputation is improved
Publicity may not persuade customers to buy
Easier to motivate and recruit employees
Which of the following statements is true in relation to UK legislation?
Product descriptions must be true, accurate and not misleading
Employers do not have to pay the national minimum or living wage
Customers cannot reject a falsely described product once purchased
Gender is not a protected characteristic of the Equality Act (2010)
Legislation...
Protects consumers from being mislead
Protects workers from discrimination
Protects workers and consumers from being injured
Guarantees that all workers will be paid the same
