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  1. Home
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  3. BA1

CIMA BA1 Exam (page: 13)
CIMA Fundamentals of Business Economics
Updated on: 09-Feb-2026

Viewing Page 13 of 95
BA1 PDF 468 Questions

Which one of the following policies to correct a balance of payments current account deficit is an example of an expenditure reducing policy?

  1. Depreciation of the currency.
  2. The imposition of an import tax.
  3. Increased income tax.
  4. The use of import quotas.

Answer(s): C



Which of the following is an invisible import for a country?

  1. Expenditure in its shops by foreign diplomats based in the country
  2. The country's contribution to foreign aid
  3. A foreign company signing a contract guaranteeing to invest in a new factory in the country
  4. Repayment of an IMF loan by the country's government

Answer(s): B



It is necessary to include a balancing item in the balance of payments accounts in order to

  1. Balance the current and capital accounts
  2. Ensure that balance of payments equilibrium is achieved
  3. Record accurately changes in the balance of official reserves
  4. Compensate for mistakes made when recording current and capital flows

Answer(s): D



In a customs union member countries

  1. Meet to agree tariff increases affecting internal trade between themselves
  2. Trade freely with each other and impose their own national restrictions on trade with the rest of the world
  3. Trade freely with each other and accept a common external tariff for trade with the rest of the world
  4. Replace national currencies with a common currency such as the Euro

Answer(s): C



Country Y and country Z both impose tariffs on goods imported from each other.
Which of the following would likely to be a long-term effect of the imposition of such tariffs?

  1. None. Tariffs affect exports and imports rather than real income
  2. Real income would be lower in Z but higher in Y
  3. Real income would be lower in Y but higher in Z
  4. Real income would grow at a slower rate in both countries compared to a situation in which there are no tariffs

Answer(s): D



Viewing Page 13 of 95



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