Test Questions.

	Questions 1 – 3 share the following answer options:
A.	Raise income tax
B.	Raise selected excise duties
C.	Raise public expenditure
D.	Cut interest rates
	Which of the above policies would you advise the government to use in an attempt to:
1.	increase employment opportunities?
2.	reduce the consumption of cigarettes?
3.	increase consumer borrowing?
4.	Corporation tax rates on company profits have been reduced in recent years. Fiscal policy is being used in this case to:
A.	encourage firms to lower their product prices
B.	enable firms to pass on higher dividends to shareholders
C.	encourage firms to invest in new plant and machinery
D.	encourage firms to pay higher wages
	Questions 5 – 7 share the following answer options:
A.	To reduce unemployment
B.	To reduce pollution
C.	To increase competition
D.	To protect domestic food supply
	Which of the above objectives do the following organizations or policies seek to achieve?
5.	EU Common Agricultural Policy
6.	Monopolies and Mergers Commission
7.	The Environment Agency
8.	Which of the following is unlikely to be a reason for the privatisation of public sector activities?
A.	To increase business management and efficiency
B.	To give consumers more choice
C.	To break up economies of scale
D.	To raise government revenue
	Questions 9 – 11 share the following answer options
A.	Income tax
B.	Corporation tax
C.	VAT
D.	Tariffs
	Which of the above taxes could be increased to:
9.	reduce disposable income?
10.	reduce investment by business?
11.	reduce the demand for imported goods?
12.	Which of the following is not an argument in favour of imposing restrictions on imports?
A.	To reduce domestic unemployment
B.	To protect domestic firms from foreign competition
C.	To increase consumer choice
D.	To protect an infant industry
	Questions 13 – 15 share the following answer options:
A.	Competition policy
B.	Regional policy
C.	Fiscal policy
D.	Monetary policy
	Which of the above policies:
13.	uses interest rates to influence the general level of economic activity?
14.	regulates monopolies and merger activity?
15.	provides financial assistance to new and existing firms in areas of high unemployment?
16.	· Suggest and explain four reasons why governments intervene in product markets. · What is fiscal policy? How can this policy be used to help create employment and business opportunities? · What is monetary policy? How can it be used to boost investment in new plant and machinery by business? · Using examples, explain how indirect taxes can be used to influence the price and quantity traded of particular goods and services. · Suggest and explain two reasons for taking entire industries in the past into public ownership. · What is privatisation? List two industries in any country that have been privatised. · What are the arguments for and against the privatisation of rail services? · What is the difference between a merger and a takeover? · Explain two reasons for merger and takeovers in business. · What is the aim of the government competition policy? · Explain the role of the Anti-monopolistic Committee in the government competition policy. · Give three examples of other regulations on business activity

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