Quick questions
1 What is meant by the term 'economic
climate?
2. Which of the following is most likely to be a
sign of an improving economic climate?
(a) A rise in the number of people who do
not have jobs but are looking for one
(b) A rise in the number of businesses
that are forced to cease trading as they
cannot repay loans
(c) A rise in the number of people in employment
(d) A rise in the number of people moving
overseas for work
[1 mark]
3 What is meant by the term "interest
rates?
4 Which of the following best describes an
overdraft?
(2 marks]
(b) The extent to which a business uses
borrowing to finance its activities
(o) A flexible loan which businesses can
use, whenever necessary, up to an agreed limit
[2 marks]
(d) A situation in which a business raises
the price of its products
(c) The long-term borrowing of an agreed
amount by a business
(1 mark)
5 Explain one possible effect of falling
interest rates on a business.
6 Which of the following is most likely to be
the result of rising interest rates?
(a) Rising sales of expensive foreign holidays
(b) Rising production of all goods and services
(c) Rising levels of employment
(d) Rising levels of saving by consumers (1 mark)
7 Explain one possible effect of falling levels
of employment on UK businesses.
8 What is meant by the term 'consumer
spending'?
(2 marks]
9 Which of the following products might be
described as essential?
(a) Milk
(b) LED television
(c) Overseas holiday
(d) Restaurant meal
(2 marks)
(2 marks)
(1 mark)
10 Explain why a bakery's sales of bread may
not be affected significantly by a fall in
consumers' incomes.
(2 marks]