Influences on a Business

Question 1

List four benefits of low interest rates for a business

Answer 1

Easier access to credit

Higher consumer spending

Increased investment

Reduced borrowing rates

Question 2

List four drawbacks of low interest rates for a business

Answer 2

Asset price bubbles

Increased competition

Inflationary pressures

Lower returns on saving

Question 3

What does low unemployment mean for a business? List four benefits

Answer 3

Greater bargaining power with suppliers

Increased employee productivity

Reduced recruitment costs

Stronger consumer demand

Question 4

What does low unemployment mean for a business? List four drawbacks

Answer 4

Higher wage pressures

Inflationary pressures

Reduced negotiating power with employees

Skills shortage