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WorksheetsBusiness 1.5 Revision
Total questions: 102
Worksheet time: 1hrs 1mins
Match the following economic factors with their corresponding labels in the diagram:
Interest rates
Cost of borrowing
Consumer income
Purchasing power
Unemployment
Job availability
Inflation
Price level changes
Taxation
Government revenue
The economic climate affects businesses in terms of unemployment by:
Increasing job opportunities and reducing unemployment rates.
Decreasing consumer spending and increasing unemployment rates.
Stabilizing the job market and maintaining unemployment rates.
Encouraging entrepreneurship and decreasing unemployment rates.
The impact of changes in consumer income on businesses can be described as:
Increased consumer spending leads to higher business revenues.
Decreased consumer income results in lower demand for luxury goods.
Stable consumer income maintains consistent business growth.
All of the above.
Income is money that is received either from work or from ____.
other sources such as investments, gifts, or government benefits.
expenses like bills and taxes.
borrowing from friends or family.
spending on luxury items.
A decrease in interest rates affects borrowers by:
Increasing their borrowing costs
Decreasing their borrowing costs
Having no effect on borrowing costs
Making borrowing more difficult
Fill in the blank: Inflation refers to a general and sustained increase in ______ over time.
prices
wages
employment
taxes
What is the impact of changes in interest rates on businesses?
Interest rates affect business costs and consumer spending.
Interest rates have no impact on businesses.
Interest rates only affect large corporations.
Interest rates only affect small businesses.
The impact of inflation on consumers is:
Increased purchasing power
Decreased purchasing power
No effect on purchasing power
Improved savings
How does inflation affect businesses?
Inflation increases costs for businesses, reducing profit margins.
Inflation decreases costs for businesses, increasing profit margins.
Inflation has no effect on businesses.
Inflation only affects consumers, not businesses.
List the types of taxes mentioned in the text.
Income Tax, Sales Tax, Property Tax
Income Tax, Value Added Tax, Capital Gains Tax
Sales Tax, Property Tax, Excise Duty
Income Tax, Sales Tax, Excise Duty
What is income tax charged on?
Income
Sales
Property
Gifts
Who pays it income VAT?
Value-added tax (VAT) is a charge on sales of goods and services based on the value of the item sold. True or False?
True
False
Council tax is used to pay for local services such as refuse collection and street lighting.
True
False
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 of the following 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 selling specialist holidays
A producer of high quality chocolate
A department store selling discounted goods
A specialist bakery selling luxury products
Which of the following 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
Which of the following 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 in the form of 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
Which of following best describes the term exchange rate?
Which of following best describes the term exchange rate?
The sales made from importing goods and services
The profit made from exporting goods and services
The price of one currency against another
Which of the following is most likely to be true if the rate of inflation rises sharply? Businesses are:
More likely to be able to manage rising costs
More likely to reduce selling prices
Less likely to be able to manage rising costs
Less likely to raise selling prices
When an economy becomes weaker, interest rates are often reduced meaning consumers are more likely to:
Save more and spend less
Save less and spend more
Save more and spend more
Save less and spend less
Which of the following 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 of the following are potential advantages to a business which sells luxury products of high levels of employment?
Select two answers:
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 two of the following are most likely to be true if interest rates fall for a new business?
Select two answers:
Loans become less expensive
Costs may increase
More likely to save money
Less likely to invest
Costs may decrease
A labor force of 20 million people has 18.5 million people employed. Find the unemployment rate.
10%
8.5%
7.5%
6%
What is the unemployment????
decisions to work based on each individuals' valuation of their own work
proportion of younger workers in the labor force
the situation of actively looking for employment but not being currently employed.
person who is simultaneously an income earner,
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
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
Which of these businesses is most likely to sell more when consumer income falls?
Travel agent
Jeweller
Pound shop
Which of these phrases best defines an unemployed person?
Someone without a job who is in full-time education
Someone without a job who is actively seeking work
Someone without a job who is unable to work
What would happen if the US dollar appreciated against the pound?
UK goods would become cheaper to buy in the US
US goods would become cheaper to buy in the UK
UK businesses would expect to sell less in the US
What would an increase in interest rates encourage?
More consumer spending
More borrowing
More saving
What is expected to happen when unemployment falls?
More people will be without a job
Consumer spending will rise
More inferior goods will be sold
What happens when there is inflation?
Prices stay the same
Purchasing power decreases
Prices fall temporarily
What is an ‘exchange rate’?
A general and sustained increase in prices
The cost of borrowing money
The price of one currency in terms of another currency
The exchange rate changes from £1 = €1.20 to £1 = € 1.30. What has happened?
The pound has appreciated against the euro
The pound has weakened against the euro
The pound has depreciated against the euro
What does the acronym SPICED stand for when used to explain what happens if the pound appreciates?
Selling Pounds Increases the Chances that Exports are Dearer
Strong Pound makes Imports Cheaper but Exports Dearer
Some Products are Imported Cheaply or Exported Daily
Which of the following is an example of a tax on sales?
VAT
Income tax
Corporation tax
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
Which of the following areas of law prevents businesses from treating customers unfairly?
Employment law
Health and Safety law
National Minimum Wage
Consumer law
Which of following statements relating to employment law is true? Employees:
Do not have to be provided with equal pay for work of equal value
Are not entitled to health and safety training
Do not have to be provided with a safe working environment
Must be paid a minimum amount as set out by the government
Which of the following statements relates to consumer law?
Businesses are required to provide and maintain safety equipment
Goods sold must be free from defects and be safe to use
Businesses must provide employees with any necessary safety training
The employer & employee have a duty to maintain a safe workplace
Which of the following is a possible impact on UK businesses of paying employees the national minimum wage?
Costs decrease and profit decreases
Costs increase and profit decreases
Costs decrease and profit increases
Costs increase and profit increases
Which of the following is covered under consumer law?
Employee rights
Product quality
Employee pay levels
Safety in the workplace
Which of the following is a possible cost to a business of providing and maintaining safety equipment and safe systems of work?
Workforce is likely to be more productive
Health and safety training is likely to be expensive
Positive reputation which can help recruitment
Minimise work related health issues
Businesses can treat consumers fairly by selling products that are:
Of satisfactory quality
Not fit for purpose
Unsafe
Not as described
Which of the following is true according to consumer law? A business:
Can apply false descriptions to any goods
Must state the “use by” or “best before” date on prepacked food
Does not need to offer a refund if a good is found to be faulty
Can sell out of date food products in its stores to the general public
Which of the following is most likely to be true if a business obeys consumer law?
Sales are likely to decrease
Bad publicity may be avoided
Fines will be issued and will need to be paid
Reputation in the marketplace decreases
Which of the following is true in relation to consumer law?
A customer has the right to reject a good or service that has been described accurately
The manufacturer, not the seller, is solely responsible for solving any problems with a product
A customer cannot chose to have a faulty product repaired at the seller’s expense, they can only have a refund
A customer has the right to return a product that is deemed not fit for purpose
Which of the following is an example of a business correctly following employment legislation?
Paying women more than men for work of equal value
Selecting an employee for promotion based upon gender
Paying men and women equal pay for work of equal value
Selecting an employee for training based upon ethnicity
A business fails to pay the national minimum wage to its employees. Which two of the following statements are true in relation to the business’s actions?
Select two answers:
Employers may be publically named and shamed
Employers will be paid any money owed to them by employees
Employees may be sued
Employees will be told to pay outstanding amounts to employers
Employers may be prosecuted
Which two of the following are benefits to a business of abiding by employment law?
Select two answers:
Helps retain employees
Number of work related accidents should increase
Employee motivation increases
Increases volume of administration and paperwork in the business
Time consuming for the employer
What is the best definition of a stakeholder?
Someone who owns shares in a business.
A person who works for a business.
Any individual or group with an interest in a business.
Someone who manages a business's finances.
The (a) can be concerned about the environmental impact of business activities, such as noise or pollution.
What is the best way for a business to resolve stakeholder conflict?
Consider compromises that address multiple stakeholder objectives.
Ignore stakeholder concerns and focus on profits.
Prioritise the needs of shareholders above others.
Reduce communication with external stakeholders.
Which of the following is an internal stakeholder?
Customers
Employees
Local community
Government
What is the main objective of customers as stakeholders?
Increased dividends from the business.
Better working conditions for employees.
Higher levels of environmental regulation.
Low-cost, high-quality products or services.
Why is it important for a business to consider its stakeholders?
Stakeholders are legally required to control the business.
Stakeholders manage the day-to-day operations of a business.
Stakeholders can influence business success or failure.
Stakeholders always provide financial investments.
Stakeholder conflict occurs when the (a) of different stakeholders clash due to a business decision. For example, (b) may want higher wages, while (c) want to reduce costs to maximise profits.
Which of the following best describes the term stakeholder? An individual or organisation that:
Owns part of a business
Provides a business with materials
Is affected by, or has an interest in, the activities of a business
Provides finance for a business
The owner of a building firm that plans to build a housing development on a local field has received complaints from residents in the surrounding area about the loss of greenspace. Conflict has occurred between:
The local community and the owner
Customers and the owner
A pressure group and the employees
Employees and the owner
Which of the following describes one way employees could have an impact on business activity?
By demanding a longer payment period for supplies
By negotiating better working conditions
By no longer purchasing the goods or services of a business
By increasing the amount of tax payable on profits
Which of the following stakeholders would have the objective of prompt payment for goods and services provided?
Suppliers
Local community
Employees
Customers
A local business wants to expand its factory to increase production capacity. Which of the following stakeholders has the authority to grant the required planning permission?
Pressure group
Shareholders
Local community
Local government
Which of the following is most likely to be the objective of a customer?
Purchasing quality products that reflect the selling price
Maximising pay levels
Increase in share price
Rise in dividend payments
A business plans to cut jobs to reduce costs. Conflict is likely to occur between which two of the following stakeholder groups regarding this decision?
Owners and employees
Suppliers and customers
Owners and customers
Employees and local community
A pressure group is best described as a group of people that seek to influence:
Business behaviour
Government policy
Legislation
All of the above
A local community has raised concerns over an entrepreneur’s plans to open a new, independent 24-hour fast food business in the area. The local community could influence this business decision most effectively by:
Voting
Protesting
Striking
Boycotting the purchase of its food
Which of the following stakeholders is most likely to have the objective of maximising pay?
Suppliers
Customers
Owners
Employees
Which of the following do employees mainly provide to a business?
Labour
Materials
Finance
Custom
A high street coffee shop uses recyclable cups.
Select two answers:
The two most likely effects this decision will have is to:
Minimise the time it takes to pay its suppliers
Maximise profits for its owners
Minimise the environmental impact on the local community
Maximise pay for its employees
Minimise possible pressure group activity
A private limited company decides to donate 5% of its profits to an organisation that provides a youth club facility to young people. This decision is most likely to directly affect which two of the following stakeholder groups?
Select two answers:
Employees
Suppliers
Customers
The local community
Shareholders
What is the primary effect of a decrease in the value of a country's currency on its exports?
Exports remain unaffected
Exports become cheaper for foreign buyers
Exports are likely to decrease
Exports become more expensive for foreign buyers
Which of the following is a potential consequence of high inflation on consumer behavior?
Increased savings
Decreased spending
Increased borrowing
Decreased borrowing
How does a rise in unemployment typically affect government tax revenue?
Tax revenue increases
Tax revenue decreases
Tax revenue remains the same
Tax revenue is unaffected
What is the likely effect on a UK exporter if the euro strengthens against the pound?
Exports sales are likely to decrease
Profits are likely to decrease
Exports will become more expensive
Exports will become less expensive
Which of the following best describes the impact of a decrease in interest rates on consumer spending?
Consumer spending is likely to fluctuate
Consumer spending is likely to increase
Consumer spending is likely to decrease
Consumer spending remains unchanged
What is the effect of a high inflation rate on the purchasing power of money?
Purchasing power remains the same
Purchasing power decreases
Purchasing power fluctuates
Purchasing power increases
