Podcast
Questions and Answers
Businesses create jobs, which leads to lower unemployment in the economy.
Businesses create jobs, which leads to lower unemployment in the economy.
True
Increased employment leads to lower tax revenues for the government.
Increased employment leads to lower tax revenues for the government.
False
As businesses expand, competition can help keep inflation down.
As businesses expand, competition can help keep inflation down.
True
Economic growth does not affect the funds available for government aid.
Economic growth does not affect the funds available for government aid.
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The presence of large multi-national corporations in Ireland ensures total security for the economy.
The presence of large multi-national corporations in Ireland ensures total security for the economy.
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Investment in businesses contributes to creating more jobs and increasing sales.
Investment in businesses contributes to creating more jobs and increasing sales.
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Local Enterprise Offices primarily focus on enhancing the roles of large multinational firms.
Local Enterprise Offices primarily focus on enhancing the roles of large multinational firms.
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Import substitution refers to the process of reducing domestic production by increasing imports.
Import substitution refers to the process of reducing domestic production by increasing imports.
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The growth of successful entrepreneurs can positively influence local entrepreneurship.
The growth of successful entrepreneurs can positively influence local entrepreneurship.
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Competition in the market always results in lower unemployment rates.
Competition in the market always results in lower unemployment rates.
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Inflation can occur when firms increase prices instead of cutting costs.
Inflation can occur when firms increase prices instead of cutting costs.
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Environmental neglect by firms can contribute to pollution and harm economic sectors like tourism.
Environmental neglect by firms can contribute to pollution and harm economic sectors like tourism.
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Increased business activity only generates positive social outcomes.
Increased business activity only generates positive social outcomes.
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Wage demands from employees can contribute to a cycle of inflation.
Wage demands from employees can contribute to a cycle of inflation.
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The entry of foreign businesses into local markets always harms local consumers.
The entry of foreign businesses into local markets always harms local consumers.
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Study Notes
Benefits of Business to the Economy
- Businesses create jobs, reducing unemployment rates and minimizing government social welfare payments.
- Increased employment and profits lead to higher tax revenues (PAYE, VAT, corporation tax), which fund education, social welfare, health, and infrastructure.
- Competition from expanding businesses prompts efficiency, lowering costs and aiding in inflation control. For example, grocery stores compete to keep prices low.
- Job creation and a wider range of goods and services enhance public living standards significantly.
- Local Enterprise Offices focus on revitalizing areas and supporting small businesses, fostering community spirit and growth in regions impacted by closures and migration.
- Reinvesting profits allows firms to expand, resulting in more job creation and increased sales and profits.
- Business expansion drives economic growth, providing the government with more funds for grants and continuing economic stimulation.
- Increased entrepreneurship reduces dependence on foreign direct investment (FDI) by ensuring the loyalty of locally owned businesses as opposed to multinational corporations.
- Business growth leads to improved balance of payments, as exports rise and imports may decline due to competitive domestic products in the market.
- An enterprise culture can emerge, inspiring local entrepreneurship and creating demand for associated local suppliers.
Disadvantages of Business to the Economy
- Competitive pressures can cause smaller firms to close, leading to unemployment and increased social welfare costs, along with decreased tax revenues.
- Firms may raise prices to maximize profits instead of pursuing cost efficiency, potentially causing inflation. This may lead to wage demands from employees and a detrimental spiral of price increases.
- Profit-driven practices might neglect environmental responsibilities, leading to pollution, which harms critical sectors like food and tourism by deterring consumers.
- Increased business activity often results in social costs such as elevated road traffic, delays, noise pollution, and health risks for workers.
- Foreign competition may enter the Irish market, providing cheaper options for consumers, which can threaten local businesses.
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Description
This quiz explores the various ways that businesses contribute to economic growth and community development. From job creation to increased tax revenues, learn how businesses play a crucial role in enhancing public living standards. Discover the positive impacts of competition and local enterprises on the economy.
