Economic influence on business activity

What is a tax?

• A financial charge made by a business

• A financial charge made by a government

• A financial contribution made by the government

How might the government be impacted by a fall in unemployment?

• They may raise less money through taxes

• The government may increase interest rates

• They may raise more money through taxes

What would an increase in interest rates encourage?

• More consumer spending

• More borrowing

• More saving

What is expected to happen when unemployment falls?

• More people will be without a job

• Consumer spending will rise

• More inferior goods will be sold

Which of the following is an example of a tax on sales?

• VAT

• Income tax

• Corporation tax

What is an interest rate?

• The cost of borrowing or a benefit for saving

• A charge by the government on individuals, consumers and businesses

• An amount of money made by an employee

What best explains corporation tax?

• A charge to cover health care, pensions and benefits

• A tax charged on goods and services

• A tax charged on companies profits

Which of the following is an indirect tax?

• Income tax

• VAT

• Corporation tax

Which of these businesses is most likely to sell more when consumer income falls?

• Travel agent

• Jeweller

• Pound shop

Which of these phrases best defines an unemployed person?

• Someone without a job who is in full-time education

• Someone without a job who is actively seeking work

• Someone without a job who is unable to work