Government And Economic Influences On Business Activity

15 Questions | By Sachou10 | Updated: Mar 21, 2022 | Attempts: 182

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Government And Economic Influences On Business Activity - Quiz

Exam revision Business studies

Questions and Answers

1.

All of the following are examples of government economic objectives except:
- A.
  
  Low price inflation
- B.
  
  Economic growth
- C.
  
  Low levels of unemploymen
- D.
  
  Low levels of exports.
2.

A low rate of inflation means that:
- A.
  
  A firm’s sales revenue is rising only slowly each year
- B.
  
  The economy is growing slowly each year
- C.
  
  Average prices are increasing at a low rate
- D.
  
  Average prices are falling year by year.
3.

Which of the following is NOT a benefit of economic growth to a country?
- A.
  
  The rate of unemployment usually falls.
- B.
  
  There will be more business failures.
- C.
  
  There will be more goods and services produced.
- D.
  
  Average living standards are likely to rise.
4.

If the rate of inflation is too high the government would probably:
- A.
  
  Raise government spending and reduce taxes
- B.
  
  Reduce government spending and raise taxes
- C.
  
  Lower rates of interest and raise government spending
- D.
  
  Reduce taxes and lower rates of interest.
5.

Which of the following is a tax on company profits? a) corporation tax  b) income tax  c) value added tax  d) import duties 
- A.
  
  Corporation tax
- B.
  
  Income tax
- C.
  
  Value added tax
- D.
  
  Import duties
6.

Economic growth is best measured by:
- A.
  
  Changes in the level of unemployment
- B.
  
  The balance of payments
- C.
  
  Changes in gross national product
- D.
  
  The rate of inflation.
7.

In the business or economic cycle the best definition of a recession is:
- A.
  
  A fall in sales and output for one business
- B.
  
  A fall in the rate of inflation
- C.
  
  A fall in gross national product
- D.
  
  A fall in the rate at which gross national product is rising.
8.

Which of the following businesses is most likely to be badly affected by a long recession?
- A.
  
  A luxury car maker
- B.
  
  The postal service
- C.
  
  A company operating bus services
- D.
  
  A bakery
9.

If interest rates increase all of the following will be likely to result except:
- A.
  
  A rise in the cost of business loans
- B.
  
  A fall in demand for expensive products
- C.
  
  A reduction in business investment and expansion plans
- D.
  
  rise in sales paid for by consumers on credit.
10.

Government controls over business activity usually include all of these except:
- A.
  
  Where the business locates
- B.
  
  The method of production used
- C.
  
  The amount of pollution allowed
- D.
  
  The advertising of the products to the consumers.
11.

Which of the following reasons explains why governments usually control monopolies?
- A.
  
  Prices are often higher under monopoly
- B.
  
  Costs of production are often lower under monopoly
- C.
  
  There is more consumer choice under monopoly.
- D.
  
  New firms are able to join the industry easily to create more competition.
12.

One reason why governments often support small businesses is because:
- A.
  
  They will become monopolists one day
- B.
  
  They provide competition for larger firms
- C.
  
  They pay more profits tax than larger firms
- D.
  
  Each small firm employs more staff than large firms.
13.

One of the possible drawbacks to a legal minimum wage is that:
- A.
  
  It will lead to lower wages for all employees
- B.
  
  Unemployed people will be discouraged from looking for work
- C.
  
  It could raise business costs and therefore prices
- D.
  
  It will encourage more employers to exploit their workers.
14.

14 A meat pie factory has to follow all of these Health and Safety regulations except:
- A.
  
  Machinery must be well protected and regularly checked.
- B.
  
  Workers must have clean working conditions and some work breaks.
- C.
  
  Meat must be of the highest quality.
- D.
  
  Meat must be kept in hygienic conditions.
15.

A government is most likely to assist firms in exporting by:
- A.
  
  Buying the products and trying to sell them abroad itself
- B.
  
  Helping to organise trade fairs abroad for firms to display their products
- C.
  
  Paying for the exports so that foreign customers are encouraged to buy more
- D.
  
  Putting import tariffs on goods from many big countries.