Which ONE of the following could be the effect on small businesses if interest rates were to rise significantly?
Select ONE answer:
- Improved net cash flow
- The risk of insolvency is greater
- Fixed costs will fall
- Overdrafts will become cheaper
Show the workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Business Studies KS4 & KS3 classes
The answer is 2 – the other answers would not be the impact of a significant rate rise.
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