Influences on a business (1&2)

Question 1

Benefits and drawbacks of acting ethically

Answer 1

Better reputation, higher staff retention and motivation. Costs may increase and sales may decrease in short term.

Question 2

Sustainability meaning

Answer 2

Must be able to maintain levels of production in the future. Short term loss of profit but long term increase.

Question 3

Low interest rates benefits and drawbacks

Answer 3

People borrowing are happier as it’s cheaper. Saving is lower and inflation can increase.

Question 4

High interest rates benefits and drawbacks

Answer 4

Saving is higher, inflation can decrease. Borrowing is higher, overdrafts build up.

Question 5

Low employment levels benefits and drawbacks

Answer 5

Wages fall, inferior businesses will get more sales. Production may fall, disposable income falls, luxury business lack in sales.

Question 6

Globalisation meaning, benefits, drawbacks.

Answer 6

Countries being connected through trade. New markets, higher productivity, cheaper labour. Economy very interlinked so one recession could lead to a global recession.

Question 7

Exchange rates meaning and analogy

Answer 7

Volume of one currency against another. SPICEE. Strong pound = imports cheaper, exports expensive. Weak pound = imports expensive, exports cheaper.

Question 8

Name the 3 legislation laws

Answer 8

Employment law, health and safety law and consumer act laws.

Question 9

Employment law properties, benefits, drawbacks

Answer 9

NMW, equality act. Efficient, motivating. Higher costs.

Question 10

Health and safety law properties and benefits.

Answer 10

protection from workplace dangers. Duties of employer such as preventing accidents, access to facilities, PPE, good working conditions. Motivation and higher staff retention.

Question 11

Describe consumer laws

Answer 11

Goods must be: as described, fit for purpose, satisfactory quality. Consumers are allowed if the product does not meet those standards: a refund, repair or replacement.

Question 12

Describe trade description act

Answer 12

government go looking for faulty businesses and those caught can be fined or even imprisoned.

Question 13

Name the two types in a competitive market

Answer 13

Monopoly = large number of small businesses. Market share is low. Like a sole trader.
Oligopoly = a few number of large businesses. Market share is high. Like a LTD.