Lesson 7.1.1.2

7.1.1.2 Economics Quiz: NCFE Business & Enterprise, Unit 7

20 questions · by Revision Ninja

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This free Economics quiz has 20 multiple choice questions for the NCFE Level 1/2 Technical Award in Business and Enterprise (NCFE Business & Enterprise), Unit 7: External Environment. It covers lesson 7.1.1.2, Economics, one of the ready-made revision sets written with Revision Ninja and organised by unit on Qwiz Rush.

Use it as a starter, a plenary or an end-of-unit check: host it live on the board and students join with a game code on their own devices — no student accounts and nothing to install — or set it for independent revision with Free Play, where each student works through the questions alone.

Every question runs on a 20-second countdown and the fastest correct answers score the most. All the questions and their choices are listed below so you can see what the quiz covers; the answers are revealed in the game. Want to change something? Make your own copy and edit it in your library.

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The 20 questions

  1. GDP has been falling for several quarters. What is the most likely result for UK businesses?

    • Skills shortages worsen
    • Consumer demand weakens
    • Wage demands rise strongly
    • Unemployment starts to fall

  2. Interest rates fall to a very low level. How are UK households most likely to react?

    • Mortgage payments increase
    • Demand for new cars falls
    • Spending on credit rises
    • Saving becomes more attractive

  3. In which phase of the business cycle would you expect unemployment to be at its lowest?

    • Growth
    • Decline
    • Boom
    • Recession

  4. A software firm cannot find enough qualified developers in the UK. What is the most likely effect on the firm?

    • Staff turnover will fall
    • It can be choosier at interview
    • It has to pay higher wages
    • Its training budget can be cut

  5. The National Living Wage goes up. Which effect is most likely to increase demand for a supermarket's products?

    • Low-paid households can spend more
    • The firm's wage bill and NI costs rise
    • Staff feel more motivated at work
    • Staff turnover is likely to fall

  6. Which phase of the business cycle is usually defined as two or more quarters of falling national output?

    • Boom
    • Growth
    • Decline
    • Recession

  7. The Bank of England raises interest rates sharply. What is the most likely effect on business investment?

    • Firms bring projects forward
    • Firms postpone new projects
    • Firms hire more staff quickly
    • Firms borrow more to expand

  8. A construction company cannot recruit enough qualified electricians. What problem is this most likely to cause?

    • Projects finish behind schedule
    • Higher spending on raw materials
    • Lower wage costs per worker
    • Falling demand for its houses

  9. The National Living Wage rises by 6%. What is the most likely short-term effect on a cafe whose staff are all on the minimum rate?

    • Its staffing costs rise
    • Its customers spend less
    • It can hire more staff now
    • Its profit margin widens

  10. The UK enters a recession. How are shoppers most likely to change what they buy?

    • They eat out far more often
    • They spend more on luxury goods
    • They borrow more to keep spending
    • They trade down to cheaper brands

  11. GDP is often used to judge how well the economy is doing. What does GDP actually measure?

    • The total amount of tax the government collects each year
    • The share of working-age adults who currently have a paid job
    • The average rise in the prices of goods and services each year
    • The total value of goods and services a country produces

  12. The UK's GDP falls for two quarters in a row. What is the most likely knock-on effect for businesses?

    • Prices rise sharply as demand outstrips supply
    • Firms invest more in machinery to expand production capacity
    • Unemployment falls as firms compete for workers
    • Consumer spending drops and some firms cut jobs

  13. The economy has grown steadily for two years. What is the most likely effect on a car dealership?

    • Wages fall because more workers are looking for jobs
    • Demand falls, so it must discount heavily to shift stock
    • Borrowing gets cheaper because the economy is growing
    • Demand rises, so it can sell more cars and take on staff

  14. The Bank of England raises interest rates sharply. How are households most likely to respond?

    • Save more, as savings accounts now pay better returns
    • Borrow more, as loans and mortgages become cheaper
    • Move savings into shares to chase higher returns
    • Spend more on luxuries such as holidays and new cars

  15. In the COVID-19 recession, the government and the Bank of England wanted people to start spending again. Which action would help do that?

    • Cut government spending to reduce borrowing
    • Raise interest rates to reward people who save
    • Cut interest rates to make borrowing cheaper
    • Raise VAT so the government collects more tax

  16. During which phase of the business cycle is unemployment typically at its highest?

    • Boom
    • Growth
    • Recession
    • Recovery

  17. The UK has a shortage of workers with engineering skills. How does this affect engineers who are already employed?

    • They can ask for higher pay, as employers compete for them
    • Their pay is held down, as employers have plenty of choice
    • Their jobs are less secure, as replacements are easy to find
    • They are offered fewer hours, as firms trim their wage bill

  18. The government raises the National Living Wage. What is the most likely effect on consumer demand?

    • Low-paid workers can spend more, so demand rises
    • Firms cut jobs, so total consumer spending falls
    • Firms face higher wage bills, so profits are squeezed
    • Workers save the extra pay, so demand stays flat

  19. The Bank of England cuts interest rates. What is the most likely effect on business investment?

    • Firms invest less, as loan repayments eat into profits
    • Firms hold cash, as savings now earn more interest
    • Firms move investment abroad to find cheaper credit
    • Firms invest more, as loans are cheaper to repay

  20. A hotel chain cannot find enough trained chefs to staff its kitchens. What is the most likely impact on the business?

    • It cuts training costs, as skilled staff are easy to find
    • Staff turnover falls because other jobs are scarce
    • It can choose from many applicants, so wages fall
    • It struggles to recruit, so growth plans may be delayed