Lesson 3.7.5

3.7.5 Analysing external environment: economic change Quiz: AQA Business, Unit 7

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.7.5, Analysing external environment: economic change: 20 multiple choice questions for the AQA Business (7132), Unit 7: Analysing the strategic position of a business, written with Revision Ninja.

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The 20 questions

  1. What does Gross Domestic Product measure within a national economy?

    • Average household income
    • Total economic output
    • Total net exports
    • Total tax revenue

  2. Which phrase best defines inflation within an economy?

    • Sustained price increases
    • Falling interest rates
    • Rising currency values
    • Decreased money supply

  3. What is the impact of a stronger pound on UK exports to foreign markets?

    • Exports become cheaper
    • Export tariffs fall
    • Exports become dearer
    • Import prices rise

  4. Which two main instruments are used by government to implement fiscal policy?

    • Interest rates
    • Money supply
    • Exchange rates
    • Taxation and spending

  5. Who is responsible for setting monetary policy in the UK economy?

    • The central bank
    • Trade unions
    • Local authorities
    • The Chancellor

  6. How is real GDP growth calculated from nominal GDP growth?

    • Multiply by exchange
    • Add inflation
    • Divide by tax
    • Deduct inflation

  7. A product's price rises from 100 pounds to 104 pounds in one year. What is the rate of price inflation for this product?

    • 40%
    • 104%
    • 0.4%
    • 4%

  8. A UK firm pays 2,500 US dollars for imported parts when 1 pound equals 1.25 dollars. What is the cost in pounds?

    • 1,250 pounds
    • 2,000 pounds
    • 2,500 pounds
    • 3,125 pounds

  9. A business has a loan of 250,000 pounds at 4% annual interest. What is the annual interest cost before any repayment of the loan?

    • 62,500 pounds
    • 10,000 pounds
    • 4,000 pounds
    • 25,000 pounds

  10. How does a sharp rise in interest rates usually affect consumer spending?

    • Consumer saving falls
    • Consumer spending falls
    • Product prices double
    • Consumer spending rises

  11. How does a weaker pound affect a UK manufacturer relying on imported raw materials?

    • Lower input costs
    • Cheaper foreign supplies
    • Higher input costs
    • Lower export tariffs

  12. What is a main limitation of using historical economic data for business decision-making?

    • It is inaccurate
    • It is backward-looking
    • It ignores inflation
    • It excludes GDP

  13. What is the most likely strategy for a business during an economic recession?

    • Raise staff wages
    • Cut operating costs
    • Increase prices sharply
    • Expand capital spending

  14. A cut in UK corporation tax directly causes a firm's retained profit to do what?

    • Fall to zero
    • Decrease
    • Increase
    • Remain unchanged

  15. An increase in UK government spending on infrastructure is an example of which policy type?

    • Contractionary fiscal policy
    • Expansionary fiscal policy
    • Monetary policy
    • Protectionist policy

  16. A global economic slowdown is most likely to have which impact on UK exporting businesses?

    • Reduced export sales
    • Increased production capacity
    • Increased export sales
    • Higher profit margins

  17. What happens to the real value of a firm's cash reserves during a period of high inflation?

    • It increases
    • It doubles
    • It stays constant
    • It decreases

  18. Which economic measure adjusts financial figures to remove the effects of inflation?

    • Real values
    • Nominal values
    • Gross values
    • Current values

  19. Output rises from 200,000 units to 230,000 units in a year. What is the percentage growth in output?

    • 30%
    • 13%
    • 230%
    • 15%

  20. Which phase of the economic cycle is characterised by falling GDP and rising unemployment?

    • Recession
    • Expansion
    • Boom
    • Recovery

All AQA Business quizzes