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CIMA BA1 - Fundamentals of Business Economics

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Total 468 questions

A surplus on the current account of the balance of payments can be financed by

A.

An inflow of capital on the capital account.

B.

Lending abroad on the capital account.

C.

A fall in the foreign exchange reserves

D.

A surplus on the government budget.

Which of the following statements about the difference between profit and shareholder wealth is false?

A.

Shareholder wealth considers financial returns over a longer period than profit

B.

Shareholder wealth takes risk into account

C.

Shareholder wealth is a discounted present value of anticipated future earnings but profit is just a short term measure of past earnings

D.

Shareholder wealth influences share prices but profit does not

Some not-for-profit organizations (NPOs) are required to show they are effective. Which one of the following most closely defines effective?

A.

Conducts its activities and operations at low cost

B.

Achieves the goals and objectives set for it

C.

Finds the correct balance between cost and benefit

D.

Doesn't make losses

Which global institution is concerned with enforcing the GATT?

A.

The IMF

B.

The World Bank

C.

The World Trade Organization

D.

The G20

When faced with a recession, the appropriate combination of policies for a government in order to generate a recovery is

A.

Tax cuts, reduced public expenditure and lower interest rates.

B.

Monetary expansion, increases in public expenditure and an appreciation of the exchange rate.

C.

Reduction of the fiscal deficit and increased money supply.

D.

Tax cuts, monetary expansion and a depreciation of the exchange rate.

Which of the following is not taken into account by the discount factor applied to future earnings when calculating shareholder value?

A.

Shareholders rate of time preference for money

B.

The amount of earnings that will be lost as taxation

C.

The amount of risk the investment is subject to

D.

The rate of inflation

Which of the following best defines a fiscal policy?

A.

A policy that increases government spending to increase national income

B.

A policy which seeks to influence the economy through manipulation of government spending and taxation

C.

A policy aimed at influencing the level of aggregate demand in the economy

D.

A policy which controls inflation by controlling the amount of money in the economy

Which global financial institution is responsible for providing stabilization funding to assist developed and developing countries with short term borrowing needs and needs for foreign currency?

A.

The IMF

B.

The World Bank

C.

The World Trade Organization

D.

The G20

Which of the following is the most likely cause of a demand deficient unemployment (or cyclical unemployment)?

A.

A fall in domestic interest rates

B.

Significantly lower labor costs available in a developing country

C.

Improvement in the terms of trade

D.

Excess aggregate demand in the economy of a trading partner

A rise in interest rates in an economy would lead to all of the following except which one ?

A.

A rise in the exchange rate for the currency

B.

A rise in personal saving

C.

An increase in business investment

D.

A rise in public expenditure