CIMA BA1 - Fundamentals of Business Economics BA1 - Fundamentals of Business Economics Dumps in PDF

Free CIMA BA1 - Fundamentals of Business Economics Real Questions (page: 11)

In a fully employed economy, which one of the following would lead to demand pull inflation?

  1. A reduction in the rate of income tax
  2. A rise in value added tax
  3. An increase in the world price of oil
  4. A rise in interest rates

Answer(s): A



If a government adopted an expansionary fiscal policy of cutting direct taxes, the businesses that would benefit most would be those whose products:

  1. Are largely bought on credit
  2. Are largely exported
  3. Have a high price elasticity of demand
  4. Are sold mainly to individual consumers

Answer(s): D



Which of the following is not a consequence of a country suffering a high rate of inflation?

  1. A depreciation in its exchange rate compared to currencies from countries with lower inflation rates
  2. A high nominal rate of interest
  3. Impoverishment of households on fixed incomes
  4. Excess aggregate demand for goods and services

Answer(s): D



In a recession, the central bank might adopt a policy of low interest rates. The businesses most likely to benefit from this are those which:

  1. Sell their products mostly on credit
  2. Have low gearing ratios
  3. Are dependent on imported components and raw materials
  4. Produce services rather than manufactured goods

Answer(s): A



If in a boom a government adopted a contractionary (restrictive) monetary policy, a typical business would expect to experience:

  1. Higher interest payments on its bank borrowing.
    ii. Falling credit based sales.
    iii. Higher income and corporate taxes.
    iv. Lower sales to government agencies.
  2. Difficulties in securing working capital vi. Higher prices for imported components.
  3. (i), (ii) and (vi) only
  4. (i), (ii) and (v) only
  5. (ii), (iii) and (iv) only
  6. (i), (iii) and (iv) only

Answer(s): B



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