Business Impact of Economic Changes Quiz
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Questions and Answers

What is the impact of falling output on employment levels?

  • Employment levels remain unchanged
  • There is a temporary increase in employment
  • Fewer workers need jobs and unemployment rises (correct)
  • More workers need jobs and unemployment falls

    • If a country runs out of foreign currencies, what happens to the price of its currency?

  • The price of the country's currency rises against other currencies
  • The price of the country's currency remains unchanged
  • The country's currency is replaced by a new currency
  • The price of the country's currency falls against other currencies (correct)

    • How does an increase in income tax affect businesses?

  • Businesses are unaffected by changes in income tax
  • Businesses see an increase in sales due to higher disposable income
  • Businesses have more money after tax due to lower personal income
  • Businesses have less money after tax and may see a fall in sales (correct)

    • What is the impact of an increase in import tariffs and quotas on businesses?

    <p>Businesses benefit if competing with imported goods, but face higher costs for imported raw materials</p> Signup and view all the answers

    When the government wants to boost economic growth, what does it do?

    <p>Increase public spending to create more demand</p> Signup and view all the answers

    What is a supply-side policy aimed at achieving?

    <p>Encouraging competition and business investment</p> Signup and view all the answers

    How does rising inflation affect businesses?

    <p>Increases costs and leads to falling sales</p> Signup and view all the answers

    What is the impact of high unemployment on businesses selling cheaper products?

    <p>Sales increase as customers cut back on spending</p> Signup and view all the answers

    Why might it get difficult for businesses to recruit new employees when GDP is increasing?

    <p>When unemployment starts to fall</p> Signup and view all the answers

    How does low inflation impact workers' wages?

    <p>Workers' wages will not buy as many goods as before</p> Signup and view all the answers

    What is a consequence of low unemployment according to the text?

    <p>Unemployed people do not produce goods and services</p> Signup and view all the answers

    How does increasing GDP generally benefit businesses?

    <p>Increasing sales due to more people having jobs and income to spend</p> Signup and view all the answers

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