1
Q
What is a business stakeholder?
A
An individual or group that affects or is affected by the actions of a business.
2
Q
Name three examples of business stakeholders.
A
Owners
3
Q
What is the objective of shareholders?
A
To maximise returns on investment.
4
Q
What is the primary objective of employees?
A
To earn a living with fair pay and job security.
5
Q
What is the primary objective of managers?
A
To meet company goals by maximising profits and minimising costs.
6
Q
What do suppliers want from a business?
A
To be paid on time and maintain long-term relationships.
7
Q
What do customers want?
A
High-quality products or services at a fair price.
8
Q
What do pressure groups aim to do?
A
Influence business policies to support a specific cause.
9
Q
What is the local community’s main objective from businesses?
A
A positive impact through jobs and environmental responsibility.
10
Q
What does the government want from businesses?
A
Compliance with laws and contribution to the economy through taxes.
11
Q
How can business activity negatively affect stakeholders?
A
Financial difficulties may lead to job losses or reduced investments.
12
Q
How can customers influence business activity?
A
Through purchasing decisions and feedback.
13
Q
Why might shareholders and employees have conflicting interests?
A
Shareholders want profit maximisation while employees want higher wages.
14
Q
Give an example of employees vs employers conflict.
A
British Airways cutting 12
15
Q
How can technology help businesses?
A
By improving communication and reducing operating costs.
16
Q
What is e-commerce?
A
Online buying and selling of goods and services.
17
Q
How does social media influence sales?
A
By building relationships and generating leads.
18
Q
What is legislation?
A
Laws and regulations that businesses must follow.
19
Q
What is consumer protection legislation?
A
Laws ensuring customers are treated fairly.
20
Q
What is employee protection legislation?
A
Laws preventing exploitation of workers.
21
Q
What does health and safety legislation ensure?
A
Protection of physical and mental wellbeing of employees.
22
Q
What is the economic climate?
A
The performance of the economy measured by GDP growth.
23
Q
What happens when GDP growth increases?
A
Incomes rise
24
Q
What type of goods see higher demand when incomes fall?
A
Inferior goods.
25
What is inflation?
The general rise in prices over time.
26
How does inflation affect business costs?
Workers demand higher wages and suppliers increase material costs.
27
What is an exchange rate?
The value of one currency compared to another.
28
What happens to exports when the pound appreciates?
Sales fall as products become more expensive overseas.
29
What are interest rates?
The percentage charged for borrowing or rewarded for saving money.
30
What happens to borrowing costs when interest rates rise?
They increase.
31
What are direct taxes?
Taxes levied on income such as Income Tax.
32
What are indirect taxes?
Taxes levied on spending such as VAT.
33
How do higher taxes affect revenue?
Customer demand may fall due to reduced disposable income.
34
What happens when unemployment falls?
Businesses must pay more to secure skilled or unskilled workers.
35
How can businesses respond to new technology?
By investing in new tools or training employees.
36
How can businesses respond to new legislation?
By complying or lobbying policymakers.
37
How can businesses respond to economic downturns?
By cutting costs or diversifying products.
38
What is meant by the economic climate?
The overall performance of the UK economy measured by GDP growth.
39
What happens when GDP growth increases?
Incomes may rise; spending on goods and services increases; inflation may rise; unemployment may fall.
40
What happens when GDP growth decreases?
Incomes may fall; spending on goods and services decreases; inflation may fall; unemployment may rise.
41
Describe the economic cycle
1. Rising GDP growth; 2. Higher household incomes; 3. More spending; 4. Rising inflation; 5. Falling unemployment.
42
What is the impact of a growing economy on businesses?
Leads to more consumer spending on goods and services which benefits businesses; when the economy contracts the opposite happens.
43
Explain why businesses need to respond to changes in the economy
To anticipate opportunities and threats from inflation
44
What is the impact on firms selling inferior goods when household incomes rise?
Demand falls; sales revenue decreases.
45
What is the impact on firms selling normal or luxury goods when household incomes rise?
Demand increases; sales revenue rises.
46
What is the impact on firms selling inferior goods when household incomes fall?
Demand increases; sales revenue rises.
47
What is the impact on firms selling normal or luxury goods when household incomes fall?
Demand decreases; sales revenue falls.
48
Define inflation
The general rise in prices in an economy over time
49
What has happened to UK inflation between 2013 and 2023?
It peaked above 10% in 2022 then dropped to 6.8% by mid-2023.
50
What problems does rapid inflation cause for businesses?
Higher costs
51
What problems does rapid inflation cause for households?
Higher cost of living
52
Explain two business challenges caused by inflation (2 marks)
Higher business costs from wages and raw materials; Higher repayments on loans due to increased interest rates.
53
How do consumer spending habits change during high inflation?
Consumers cut back on luxury purchases and focus spending on necessities.
54
Define exchange rate
The value of one currency expressed in terms of another.
55
Why are exchange rates important for businesses?
They affect the costs of imports and the competitiveness of exports.
56
What is the impact on exporters when the pound appreciates?
Sales likely fall as UK goods become more expensive abroad; firms may reduce prices
57
What is the impact on importers when the pound appreciates?
Costs fall as imported raw materials become cheaper.
58
What is the impact on exporters when the pound depreciates?
Sales likely rise as UK goods become cheaper abroad.
59
What is the impact on importers when the pound depreciates?
Costs rise as imported materials become more expensive; businesses may seek domestic suppliers.
60
Define interest rate
The percentage reward for saving money and the percentage charged for borrowing money.
61
What is the impact of rising interest rates on businesses?
Loan repayments become more expensive
62
What is the impact of high interest rates on consumers?
Less likely to buy goods on credit; reduces demand for business products.
63
Define taxation
Taxes are charges imposed by governments on income
64
Give two examples of direct taxes
Income Tax; Corporation Tax.
65
Give two examples of indirect taxes
Value Added Tax (VAT); Customs Duties.
66
What is the impact of increased income tax on businesses?
Reduces customer disposable income; demand for goods falls.
67
What is the impact of increased VAT on businesses?
Raises prices for consumers; may reduce demand and force customers to switch to alternatives.
68
What is the impact of increased taxation on business costs?
Higher costs from VAT and National Insurance contributions; increased import duties raise import costs.
69
How might higher taxation affect business decisions?
Firms may reduce investment
70
What is the impact of falling unemployment on businesses?
They may face higher wage demands as competition for skilled and unskilled labour increases.
71
What is the impact of rising unemployment on businesses?
Labour becomes cheaper and easier to recruit; reduces wage costs.
72
Why are labour costs important to businesses?
They are a significant expense and directly affect profitability.
73
How can businesses respond to external influences such as technology?
By investing in new technology
74
How can businesses respond to external influences such as legislation?
By complying with regulations
75
How can businesses respond to external influences such as the economy?
By diversifying products
76
What types of technology are commonly used by businesses?
E-commerce
77
What advantage do payment systems such as Apple Pay provide?
They make life convenient for customers and provide a competitive edge
78
How does e-commerce affect sales?
Expands the customer base globally; increases sales opportunities.
79
How does e-commerce affect business costs?
Reduces need for physical stores and overheads.
80
How does e-commerce affect the marketing mix?
Provides online storefronts
81
How does social media affect sales?
Helps businesses build customer relationships and generate leads.
82
How does social media reduce costs?
Cheaper than traditional advertising channels like newspapers and TV.
83
How does social media affect the marketing mix?
Provides new channels for brand building
84
How does digital communication affect sales?
Allows businesses to reach customers and close deals through tools like email marketing.
85
How does digital communication reduce costs?
Provides alternatives to physical offices; staff can work remotely using WhatsApp or similar tools.
86
How does digital communication affect the marketing mix?
Adds new communication channels such as email marketing and online campaigns.
87
Define legislation
Laws and regulations that govern how businesses must operate.
88
Why can new legislation increase costs for businesses?
Firms may need to adapt operations
89
Name three areas of legislation that affect businesses
Consumer protection; Employee protection; Health and safety.
90
What is the purpose of consumer protection legislation?
To ensure customers are treated fairly
91
What is the impact of consumer protection legislation on businesses?
Increases costs and reduces profitability but creates a level playing field for competition.
92
What is the purpose of employee protection legislation?
To prevent exploitation and discrimination
93
Give two examples of employee rights
The right to equal opportunities; The right to join a trade union.
94
What are the impacts of employee protection legislation on businesses?
Higher costs
95
What does health and safety legislation require?
That businesses protect the physical and mental wellbeing of employees
96
Give three examples of health and safety requirements
Breaks and rest periods; Safe temperature and noise levels; Hygienic and sanitary conditions.
97
What are the costs of complying with health and safety legislation?
Staff training
98
What are the consequences of serious health and safety breaches?
Fines
99
What is meant by the economic climate?
The overall performance of the UK economy measured by GDP growth.
100
What happens when GDP growth increases?
Incomes may rise; spending on goods and services increases; inflation may rise; unemployment may fall.
101
What happens when GDP growth decreases?
Incomes may fall; spending on goods and services decreases; inflation may fall; unemployment may rise.
102
Describe the economic cycle
1. Rising GDP growth; 2. Higher household incomes; 3. More spending; 4. Rising inflation; 5. Falling unemployment.
103
What is the impact of a growing economy on businesses?
Leads to more consumer spending on goods and services which benefits businesses; when the economy contracts the opposite happens.
104
Explain why businesses need to respond to changes in the economy
To anticipate opportunities and threats from inflation
105
What is the impact on firms selling inferior goods when household incomes rise?
Demand falls; sales revenue decreases.
106
What is the impact on firms selling normal or luxury goods when household incomes rise?
Demand increases; sales revenue rises.
107
What is the impact on firms selling inferior goods when household incomes fall?
Demand increases; sales revenue rises.
108
What is the impact on firms selling normal or luxury goods when household incomes fall?
Demand decreases; sales revenue falls.
109
Define inflation
The general rise in prices in an economy over time
110
What has happened to UK inflation between 2013 and 2023?
It peaked above 10% in 2022 then dropped to 6.8% by mid-2023.
111
What problems does rapid inflation cause for businesses?
Higher costs
112
What problems does rapid inflation cause for households?
Higher cost of living
113
Explain two business challenges caused by inflation (2 marks)
Higher business costs from wages and raw materials; Higher repayments on loans due to increased interest rates.
114
How do consumer spending habits change during high inflation?
Consumers cut back on luxury purchases and focus spending on necessities.
115
Define exchange rate
The value of one currency expressed in terms of another.
116
Why are exchange rates important for businesses?
They affect the costs of imports and the competitiveness of exports.
117
What is the impact on exporters when the pound appreciates?
Sales likely fall as UK goods become more expensive abroad; firms may reduce prices
118
What is the impact on importers when the pound appreciates?
Costs fall as imported raw materials become cheaper.
119
What is the impact on exporters when the pound depreciates?
Sales likely rise as UK goods become cheaper abroad.
120
What is the impact on importers when the pound depreciates?
Costs rise as imported materials become more expensive; businesses may seek domestic suppliers.
121
Define interest rate
The percentage reward for saving money and the percentage charged for borrowing money.
122
What is the impact of rising interest rates on businesses?
Loan repayments become more expensive
123
What is the impact of high interest rates on consumers?
Less likely to buy goods on credit; reduces demand for business products.
124
Define taxation
Taxes are charges imposed by governments on income
125
Give two examples of direct taxes
Income Tax; Corporation Tax.
126
Give two examples of indirect taxes
Value Added Tax (VAT); Customs Duties.
127
What is the impact of increased income tax on businesses?
Reduces customer disposable income; demand for goods falls.
128
What is the impact of increased VAT on businesses?
Raises prices for consumers; may reduce demand and force customers to switch to alternatives.
129
What is the impact of increased taxation on business costs?
Higher costs from VAT and National Insurance contributions; increased import duties raise import costs.
130
How might higher taxation affect business decisions?
Firms may reduce investment
131
What is the impact of falling unemployment on businesses?
They may face higher wage demands as competition for skilled and unskilled labour increases.
132
What is the impact of rising unemployment on businesses?
Labour becomes cheaper and easier to recruit; reduces wage costs.
133
Why are labour costs important to businesses?
They are a significant expense and directly affect profitability.
134
How can businesses respond to external influences such as technology?
By investing in new technology
135
How can businesses respond to external influences such as legislation?
By complying with regulations
136
How can businesses respond to external influences such as the economy?
By diversifying products
137
What types of technology are commonly used by businesses?
E-commerce
138
What advantage do payment systems such as Apple Pay provide?
They make life convenient for customers and provide a competitive edge
139
How does e-commerce affect sales?
Expands the customer base globally; increases sales opportunities.
140
How does e-commerce affect business costs?
Reduces need for physical stores and overheads.
141
How does e-commerce affect the marketing mix?
Provides online storefronts
142
How does social media affect sales?
Helps businesses build customer relationships and generate leads.
143
How does social media reduce costs?
Cheaper than traditional advertising channels like newspapers and TV.
144
How does social media affect the marketing mix?
Provides new channels for brand building
145
How does digital communication affect sales?
Allows businesses to reach customers and close deals through tools like email marketing.
146
How does digital communication reduce costs?
Provides alternatives to physical offices; staff can work remotely using WhatsApp or similar tools.
147
How does digital communication affect the marketing mix?
Adds new communication channels such as email marketing and online campaigns.
148
Define legislation
Laws and regulations that govern how businesses must operate.
149
Why can new legislation increase costs for businesses?
Firms may need to adapt operations
150
Name three areas of legislation that affect businesses
Consumer protection; Employee protection; Health and safety.
151
What is the purpose of consumer protection legislation?
To ensure customers are treated fairly
152
What is the impact of consumer protection legislation on businesses?
Increases costs and reduces profitability but creates a level playing field for competition.
153
What is the purpose of employee protection legislation?
To prevent exploitation and discrimination
154
Give two examples of employee rights
The right to equal opportunities; The right to join a trade union.
155
What are the impacts of employee protection legislation on businesses?
Higher costs
156
What does health and safety legislation require?
That businesses protect the physical and mental wellbeing of employees
157
Give three examples of health and safety requirements
Breaks and rest periods; Safe temperature and noise levels; Hygienic and sanitary conditions.
158
What are the costs of complying with health and safety legislation?
Staff training
159
What are the consequences of serious health and safety breaches?
Fines
