External Influences | Edexcel A-Level Business (9BS0)
External Influences
- 112 questions
- 3 subtopics
- Theme 2: managing business activities
- Paper 2 and Paper 3
External influences closes Theme 2.
It covers the conditions a business does not control: inflation, exchange rates, interest rates and the state of the economy, the law it has to work within, and the competitors it shares a market with.
Sample questions from External Influences
Answer each one closed book first, then open the answer.
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Economic influences
What is the effect of increases in income tax on consumer demand?
Show the answer
They reduce consumer disposable income, potentially lowering demand for goods and services. -
Economic influences
Which types of businesses are typically more affected by the business cycle — those selling luxuries or necessities?
Show the answer
Businesses selling luxury or non-essential goods are typically more affected than those selling necessities. -
Legislation
How does employee protection legislation affect recruitment and dismissal procedures?
Show the answer
Businesses must follow fair, documented processes when hiring and firing, including proper contracts, notice periods, and evidence-based decision-making. -
Legislation
What does health and safety legislation require regarding the working environment?
Show the answer
Employers must provide a safe working environment that minimises risks to employee health and safety. -
The competitive environment
How does a high level of competition affect pricing strategies?
Show the answer
It creates pricing pressure, often forcing businesses to lower prices to remain competitive. -
The competitive environment
How can increased consumer demand contribute to market size growth?
Show the answer
Higher demand from existing consumers leads to more purchases, increasing the total value or volume of sales in the market.
The 3 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Economic influences | Inflation, exchange rates, interest rates, taxation and government spending, the phases of the business cycle from boom to recovery, economic uncertainty, and calculating and interpreting index numbers. | 61 |
| Legislation | Consumer protection, employee protection, environmental protection, competition policy and health and safety, and what each costs a business. | 36 |
| The competitive environment | Measuring market size by value and volume, how the level of competition affects pricing, profit margins and the need for differentiation, the strategies that give an advantage, and how growth or decline in market size changes competition. | 15 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
Edexcel A-Level Business Active Recall Guide
Every topic, not just this one. 2,305 questions with their answers.