What is one impact of an INCREASE in interest rates?

Firms reduce levels of investment

Which of the following is the LEAST likely impact of increased direct and indirect taxation

Increase in business investment

The pound is getting stronger. This is BEST for businesses that...

Import raw materials but sell in the UK

A sustained increase in the average price level in the economy

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Economic Influences

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Edexcel A Level Business Economics Influences

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Questions 12

Answers

1
Two consecutive quarters of negative economic growth is called a...
Downturn
Boom
Bust
Recession
2
What is one impact of an INCREASE in interest rates?
A decrease in firms financing costs
Consumer spending increases
Firms reduce levels of investment
An increase in business start-ups
3
The fluctuations in the levels and rates of growth of GDP are known as:
The Business Cycle
A Recovery
Economic Growth
Economic Forecasting
4
What is the US Dollar equivalent of £200 at an exchange rate of £1:US$1.40
$280
$80
$200
$143
5
Why is high UK inflation a problem for UK businesses?
It could lead to a loss of competitiveness in exports
Costs of supplies and wages increase
All of these answers
It causes uncertainty and instability
6
The current UK inflation rate (January 2021) is:
0.9%
1.3%
2.3%
1.9%
7
What is an interest rate?
A sustained increase in the average price level in the economy
The price of one currency expresssed in terms of another
The price of borrowed money
The value of goods and services produced within an economy
8
Which of the following is the LEAST likely impact of increased direct and indirect taxation
Increase in business investment
Higher prices and decrease in demand
Higher corporation tax costs for firms
Reduction in consumer spending
9
What is the Bank of England target rate for inflation?
2%
3%
4%
1%
10
The pound is getting stronger. This is BEST for businesses that...
All UK businesses
Import raw materials but sell in the UK
Source raw materials in the UK and export overseas
Import raw materials and export overseas
11
What is inflation
The value of goods and services produced within an economy
A sustained increase in the average price level in the economy
The price of borrowed money
The price of one currency expresssed in terms of another
12
A company takes out a loan of £1,000 with an interest rate of 3%. What is the cost for one year?
£3,000
£30
£10
£300

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