Government And Economic Influences On Business Activity

15 Questions | Total Attempts: 155

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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.

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