Economic Climate MCQs

Front

What is inflation?

Back

An increase in the general price level of goods and services

Front

How can high inflation affect businesses?

Back

It can lead to higher wage demands from employees

Front

What is the base interest rate set by the Bank of England called?

Back

Bank rate

Front

How do rising interest rates typically affect consumer spending?

Back

Consumers borrow less and spend less

Front

What is the main measure of economic growth?

Back

Gross Domestic Product (GDP)

Front

If the UK economy is experiencing a period of high economic growth, what is most likely to happen?

Back

Consumer demand for goods and services will increase

Front

How does a decrease in interest rates affect businesses?

Back

It encourages businesses to invest and expand

Front

What happens when the value of the pound (£) strengthens against other currencies?

Back

UK exports become more expensive for foreign buyers

Front

What is a likely effect of high unemployment on businesses?

Back

Lower wage expectations from job seekers

Front

What is the term for an extended period of negative economic growth?

Back

Recession