Business Studies Multiple Choice Question – 3 August 2017

Most of the customers of a furniture shop buy items through borrowing the money. The furniture shop has a bank overdraft and a bank loan. Interest rates come down. What is the MOST LIKELY to be the effect on this firm?
Select ONE answer:

  1. Its sales will rise and it will pay more interest on its borrowings
  2. Its sales will rise and it will pay less interest on its borrowings
  3. Its sales will fall and it will pay more interest on its borrowings
  4. Its sales will fall and it will pay less interest on its borrowings
  5. It sales will fall and it will pay the same interest on its borrowings

Which institution sets interest rates in the UK
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This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 2 – It will pay less interest on the bank overdraft which are often variable rate, and although it is not specified in the preamble it is a possibility that the loan is also on a variable rate and the interest costs will decrease each month. Sales will rise as buying furniture is often seen as a luxury item to purchase by consumers which is often done via borrowing money.

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Business Studies Multiple Choice Question – 2 August 2017

A small car dealer, which buys and sells second hand cars, has £5,000 in the bank in savings and has no bank loans. Interest rates rise substantially. What is the MOST LIKELY to be the effect on this firm?
Select ONE answer:

  1. It might be better off because its car sales are likely to rise and it will receive more interest on its savings
  2. It might be worse off, although it will receive more interest on its savings, its car sales will fall
  3. It might be worse off because its car sales will fall and it will receive less interest on its savings
  4. It might be better off because its car sales will rise although it will receive less interest on its savings
  5. It might be worse off because its car sales will not change and it will receive less interest on its savings

What is the definition of an interest rate?
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This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 2 – It will receive more interest on its £5,000 in savings, especially as it has no bank loans outstanding. However, it is likely that car sales will fall, as buying a car is seen by many consumers as a luxury item, so any increase in interest rates is likely to make purchasing a car more expensive for those who have to borrow money to buy one.

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Business Studies Multiple Choice Question – 1 August 2017

A small bookshop runs an overdraft of £1,000 for the past 12 months. The rate of interest on the overdraft was 8%. The bank has now written to the business saying that its overdraft rate will change to 10%? What will be the increase in its overdraft interest costs if it borrows £1,000 for another 12 months?

Select ONE answer:

  1. £100
  2. £80
  3. £20
  4. £10
  5. £50

What will be the increase in its overdraft interest costs if it borrows £1,000 for another 12 months at 16% interest?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 3 – Year 1 interest = £1,000 * 8% = £80 Year 2 interest = £1,000 * 10% = £100. The difference is £100 -£80 = £20 increase in overdraft interest costs.

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Business Studies Multiple Choice Question – 1 July 2017

A bakery has just launched a new range of delicious cakes. Which of the following is NOT a CASH INFLOW for the business? Select ONE answer:

  1. Capital from the owner to help launch the new range of delicious cakes
  2. A bank loan obtained to help launch the new range of delicious cakes
  3. Buying ingredients for the new range of delicious cakes
  4. Sales from the new range of delicious cakes

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 3 – “Buying ingredients for the new range of cakes” which are a cash outflow, the rest are cash inflows.

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Business Studies Multiple Choice Question – 30 June 2017

Multiple Choice Question Business Studies

Which ONE of the following items below is a type of primary market research?

Select ONE answer:

  1. Government statistics
  2. Survey of customers
  3. Internet research
  4. Newspaper articles

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 2 – Survey of customers, the rest are examples of secondary research

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