A LEVEL EDEXCEL ECONOMICS B - THEME 3
EXAM QUESTIONS AND ANSWERS 100%
CORRECT!!
, Globalization - ANSWER the process by which businesses or other organizations
develop international influence or start operating on an international scale.
benefits of economic growth on consumers - ANSWER - More consumer confidence
which leads to more consumption and higher living standards
- The average consumer income increases because wages are rising
Cons of economic growth on consumers - ANSWER - Likely to cause demand-pull
inflation
- Increases inequality because economic growth doesn't benefit everyone equally
Benefits of economic growth on firms - ANSWER - More profits, confidence and
investment
- More profits may improve their technology so may benefit from economies of scale
- More competition in the local and global markets which makes them more productive
and efficient so increased sales
Cons of economic growth on firms - ANSWER - Firms supplying inferior goods may see
a fall in sales
- Firms may face more menu costs due to higher inflation
Benefits of economic growth on the government - ANSWER - Government budget may
improve due to increased tax revenue and less spending on welfare
Cons of economic growth on the government - ANSWER - Governments may have to
increase their spending on healthcare if the consumption of demerit goods increases
Benefits of economic growth on living standards - ANSWER - Economic growth could
lead to the development of more sustainable technology
- Public services may improve because governments receive higher tax levels so they
can spend more
Cons of economic growth on living standards - ANSWER - There could be a higher level
of negative externalities (e.g. environmental damage) because of the increased
production / consumption of goods
EXAM QUESTIONS AND ANSWERS 100%
CORRECT!!
, Globalization - ANSWER the process by which businesses or other organizations
develop international influence or start operating on an international scale.
benefits of economic growth on consumers - ANSWER - More consumer confidence
which leads to more consumption and higher living standards
- The average consumer income increases because wages are rising
Cons of economic growth on consumers - ANSWER - Likely to cause demand-pull
inflation
- Increases inequality because economic growth doesn't benefit everyone equally
Benefits of economic growth on firms - ANSWER - More profits, confidence and
investment
- More profits may improve their technology so may benefit from economies of scale
- More competition in the local and global markets which makes them more productive
and efficient so increased sales
Cons of economic growth on firms - ANSWER - Firms supplying inferior goods may see
a fall in sales
- Firms may face more menu costs due to higher inflation
Benefits of economic growth on the government - ANSWER - Government budget may
improve due to increased tax revenue and less spending on welfare
Cons of economic growth on the government - ANSWER - Governments may have to
increase their spending on healthcare if the consumption of demerit goods increases
Benefits of economic growth on living standards - ANSWER - Economic growth could
lead to the development of more sustainable technology
- Public services may improve because governments receive higher tax levels so they
can spend more
Cons of economic growth on living standards - ANSWER - There could be a higher level
of negative externalities (e.g. environmental damage) because of the increased
production / consumption of goods
