Influences on business
Edexcel GCSE Business Studies revision on Influences on business. Aligned to the Pearson Edexcel GCSE Business 1BS0 specification. This bank has 10 practice questions on this topic.
Sample questions (3 of 10)
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Question 1
If the Bank of England raises interest rates, what is the MOST likely effect on consumer spending?
- A) It will increase sharply
- B) It will fall, because borrowing is more expensive
- C) It will be unaffected
- D) It will fall, because of inflation alone
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Answer: It will fall, because borrowing is more expensive
Higher interest rates make loans and credit cards more expensive AND make saving more attractive. Both effects reduce consumer spending. This particularly hurts businesses selling 'big-ticket' items bought on credit (cars, sofas, kitchens).
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Question 2
Which of these is a STAKEHOLDER but NOT a shareholder of a business?
- A) The board of directors
- B) A worker at the factory
- C) An investor holding 500 shares
- D) The CEO who owns 5% of equity
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Answer: A worker at the factory
Stakeholder is the broader term: customers, employees, suppliers, the local community, the government, AND shareholders. Workers without share-options are stakeholders (they're affected by company decisions) but not shareholders (they don't own equity).
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Question 3
Inflation of 8% means that, on average...
- A) Wages have fallen by 8%
- B) Prices have risen by 8% over the year
- C) Unemployment has risen by 8%
- D) GDP has risen by 8%
Show answer
Answer: Prices have risen by 8% over the year
Measured as the % change in the Consumer Price Index (CPI) over 12 months. High inflation erodes purchasing power: if your wage rises 4% but prices rise 8%, you're effectively poorer by 4%. Businesses face higher input costs and uncertain customer demand.
Want to test yourself on the remaining cards for this topic?
7 more questions on Influences on business — plus mistakes tracking and spaced repetition across the whole Business Studies spec.