IGCSE Business Studies 2025 – 400 Free Practice Questions to Pass the Exam

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What is one major factor that influences consumer behavior?

Administrative policies

Economic conditions

Economic conditions play a significant role in influencing consumer behavior because they directly affect individuals' purchasing power and spending habits. When the economy is strong, consumers generally feel more confident about their financial situation, leading to increased spending on goods and services. Conversely, during economic downturns or recessions, consumers are more likely to prioritize essential purchases and cut back on discretionary spending, as uncertainty about income and job security rises.

Factors such as inflation rates, employment levels, and overall economic growth shape how much money consumers are willing and able to spend. As a result, businesses must consider current economic conditions when developing marketing strategies and pricing their products, as shifts in consumer behavior during different economic phases can significantly impact sales and profitability.

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Government regulations

Technological advancements

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