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  1. Home
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  3. BA1

CIMA BA1 Exam (page: 5)
CIMA Fundamentals of Business Economics
Updated on: 24-Mar-2026

Viewing Page 5 of 95
BA1 PDF 468 Questions

All the following statements relate to an increase in government spending which is not accompanied by an increase in taxation.
Which statement is NOT correct?

  1. The government's budget deficit will increase
  2. The aggregate demand curve will shift to the right
  3. The initial change in government spending may lead to a larger impact upon the economy
  4. An expansionary monetary policy is being pursued

Answer(s): D



Inflation is undesirable for all of the following reasons except which one?

  1. Inflation decreases the international competitiveness of the business sector.
  2. Inflation distorts the price system and the process of resource allocation.
  3. Inflation shifts wealth from debtors to creditors in an arbitrary fashion.
  4. Inflation makes business forecasting and planning more difficult.

Answer(s): C



All of the following could cause the onset of a recession except which one?

  1. A significant appreciation of the exchange rate
  2. A decline in business investment
  3. A significant fall in personal savings rates
  4. An increase in the government budget deficit

Answer(s): C



As a result of a period of rapid economic growth, an economy is likely to experience all of the following except which one?

  1. An improving overseas trade balance.
  2. Falling levels of unemployment.
  3. Increased inflationary pressure.
  4. Rising government tax receipts.

Answer(s): A



All of the following are early indicators of a recovery from a recession except which one?

  1. A rise in business confidence.
  2. An acceleration in the growth of the money supply.
  3. A fall in the level of net personal debt.
  4. An increase in the number of unfilled vacancies.

Answer(s): C



Viewing Page 5 of 95



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