What this practice covers
These questions are drawn from past CIE 0264 Business papers and filtered to economic issues. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
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What examiners see students get wrong here
These are the errors that cost marks on economic issues, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Listing the four stages of the business cycle without saying what any of them does to the business in the question.
- Assuming every business suffers in a recession. Discount retailers, repair services and budget brands often gain.
- Treating inflation as a rise in the business's own prices instead of a general rise in prices.
- Saying a tax rise reduces profit without saying which tax. A rise in income tax does not change the business's tax bill, it changes its customers' spending.
- Writing that higher interest rates only affect businesses that borrow, and forgetting the fall in customer demand.
- Answering "how may the business respond" with the effect rather than the action.
- Offering a second effect instead of developing the first one, in a 6-mark part.
- Concluding "there are advantages and disadvantages" on an 8-mark part, which earns no evaluation mark.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Economic issues revision notes.