CIMAPRA17-BA1-1-ENG

A surplus on the current account of the balance of payments can be financed byA . An inflow of capital on the capital account.B . Lending abroad on the capital account.C . A fall in the foreign exchange reservesD . A surplus on the government budget.View AnswerAnswer: B

At which stage of the trade cycle should management anticipate a rise in interest rates?A . RecessionB . DepressionC . RecoveryD . BoomView AnswerAnswer: D

Which one of the following would raise both national income and disposable income ?A . An increase in transfer paymentsB . A reduction in rates of personal income taxC . An increase in business profitsD . A rise in the rates of personal income taxView AnswerAnswer: C

Which of the following statements best describes a private firm?A . An organization that does not seek profitB . An organization that is owned by shareholdersC . An organization that is outside the state's influenceD . An organization that is not directly owned by the stateView AnswerAnswer: D

The equilibrium level of national income in an economy is the level of income at whichA . Full employment occursB . There is zero inflationC . Total planned spending equals the supply of output availableD . The government's budget and the balance of payments are both exactly balancedView AnswerAnswer: C

Which one of the following policies to correct a balance of payments current account deficit is an example of an expenditure reducing policy?A . Depreciation of the currency.B . The imposition of an import tax.C . Increased income tax.D . The use of import quotas.View AnswerAnswer: C

If a country joined an economic union (for example, the European Union) its business sector could benefit from all of the following except which one?A . Higher profit margins due to a reduction in transport costs.B . Economies of scale as it gained access to a larger market.C . Lower...

A 'supply-side' economist would recommend that in the long term, a country's unemployment problem should be tackled byA . A reduction in the money supplyB . Income tax cuts to promote labor market incentivesC . Tax cuts to expand aggregate demandD . Increasing the job-seekers allowance and the period for...

Which of the following would result from a depreciation in the exchange rate for a country's currency? i. A fall in the foreign exchange price of that country's exports. ii. A rise in the foreign exchange price of that country's imports. iii. A rise in production costs for businesses using...

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