Higher Business Management -
Understanding Business Exam
Questions And Answers Practice
Questions with Solutions Newest 2026
2027 | Already Graded A+
Primary sector - Answer- This sector of industry is concerned with the extraction of raw
materials or natural resources from the land
Secondary sector - Answer- This sector of industry is concerned with manufacturing
Tertiary sector - Answer- This sector of industry is concerned with providing a service
Quaternary sector - Answer- This sector consists of those industries providing
information services, such as computing, ICT (information and communication
technologies), consultancy (offering advice to businesses) and R&D (research,
particularly in scientific fields)
Private sector organisation - Answer- Organisations in this sector are owned and
controlled by private individuals
Private sector organisation - Answer- Organisations in this sector aim to survive and
make a profit
Public sector organisation - Answer- Organisations in this sector are owned and
controlled by the government
Public sector organisation - Answer- Organisations in this sector aim to provide a
service to the public and are funded by taxes
Third sector organisation - Answer- Organisations that are run not for profit and
independently of the government
Third sector organisation - Answer- Organisations in this sector aim to raise money and
increase awareness for good causes
Social Enterprise - Answer- An organisation that is run like a business but that is "not for
profit". All profits are reinvested into the organisation
Charity - Answer- A non-profit organisation that exists to help a cause in society
, Limited Liability - Answer- When shareholders are only liable for the amount invested in
a company
Public Limited Company - Answer- A company where shares are offered to the public
Multinational - Answer- A company which has its headquarters in one country but has
assembly or production facilities in other countries
Franchise - Answer- A business model that allows businesses to pay a sum of money to
own a branch of a well-known, existing business
Franchiser - Answer- The main original business which has been turned into a franchise
Franchisee - Answer- The owner of each individual franchise branch
Economies of scale - Answer- The cost advantages of operating on a larger scale, for
example, buying more cheaply in bulk and reducing unit costs
Equity - Answer- Money invested in a business
Corporation Tax - Answer- Tax paid on the profit made by a company to the
Government
Share issue - Answer- When a limited company offers equity to investors
Dividend - Answer- A share of profits paid to shareholders
Objectives - Answer- A statement of what a business is trying to achieve over the next
12 months
Corporate social responsibility - Answer- When a company aims to act ethically and
responsibly so they look good to the public
Satisfice - Answer- To do the minimum amount needed to achieve a particular goal
Market share - Answer- A company's proportion of sales within a specific market
Stakeholder - Answer- A person or group with a key interest in an organisation
Internal/Organic growth - Answer- When a business decides to grow on their own
without
Horizontal integration - Answer- When two businesses from the same sector of industry
become one business
Understanding Business Exam
Questions And Answers Practice
Questions with Solutions Newest 2026
2027 | Already Graded A+
Primary sector - Answer- This sector of industry is concerned with the extraction of raw
materials or natural resources from the land
Secondary sector - Answer- This sector of industry is concerned with manufacturing
Tertiary sector - Answer- This sector of industry is concerned with providing a service
Quaternary sector - Answer- This sector consists of those industries providing
information services, such as computing, ICT (information and communication
technologies), consultancy (offering advice to businesses) and R&D (research,
particularly in scientific fields)
Private sector organisation - Answer- Organisations in this sector are owned and
controlled by private individuals
Private sector organisation - Answer- Organisations in this sector aim to survive and
make a profit
Public sector organisation - Answer- Organisations in this sector are owned and
controlled by the government
Public sector organisation - Answer- Organisations in this sector aim to provide a
service to the public and are funded by taxes
Third sector organisation - Answer- Organisations that are run not for profit and
independently of the government
Third sector organisation - Answer- Organisations in this sector aim to raise money and
increase awareness for good causes
Social Enterprise - Answer- An organisation that is run like a business but that is "not for
profit". All profits are reinvested into the organisation
Charity - Answer- A non-profit organisation that exists to help a cause in society
, Limited Liability - Answer- When shareholders are only liable for the amount invested in
a company
Public Limited Company - Answer- A company where shares are offered to the public
Multinational - Answer- A company which has its headquarters in one country but has
assembly or production facilities in other countries
Franchise - Answer- A business model that allows businesses to pay a sum of money to
own a branch of a well-known, existing business
Franchiser - Answer- The main original business which has been turned into a franchise
Franchisee - Answer- The owner of each individual franchise branch
Economies of scale - Answer- The cost advantages of operating on a larger scale, for
example, buying more cheaply in bulk and reducing unit costs
Equity - Answer- Money invested in a business
Corporation Tax - Answer- Tax paid on the profit made by a company to the
Government
Share issue - Answer- When a limited company offers equity to investors
Dividend - Answer- A share of profits paid to shareholders
Objectives - Answer- A statement of what a business is trying to achieve over the next
12 months
Corporate social responsibility - Answer- When a company aims to act ethically and
responsibly so they look good to the public
Satisfice - Answer- To do the minimum amount needed to achieve a particular goal
Market share - Answer- A company's proportion of sales within a specific market
Stakeholder - Answer- A person or group with a key interest in an organisation
Internal/Organic growth - Answer- When a business decides to grow on their own
without
Horizontal integration - Answer- When two businesses from the same sector of industry
become one business
