Tag: GCSE

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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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?
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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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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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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

This work is licensed under a Creative Commons Attribution 4.0 International License.