CIMA CIMAPRA17-BA1-1 Exam Practice Test Instant Access

Question 1

Which of the following is an example of reflationary monetary policy?

ALowering interest rates in order to boost the economy during a recession.

BIntroducing a tax on financial transactions in order to reduce the volume of speculative transactions

CIncreasing investment in education in order to improve the long term competitiveness of the economy

DReducing government expenditure in order to rem in a budget deficit

Answer : A

Question 2

Which of the following businesses is least likely to benefit from an appreciation of Country A's currency against Country B's currency?

AA fashion producer in Country A exporting garments to Country

BA food company in Country B exporting condiments to Country A

CAn automobile producer in Country A importing car parts from suppliers in Country B

DA pharmaceutical company in Country A that pays a license to a patent holder in Country B

Answer : B

Question 3

On the graph below what is the most efficient level of output?

A3000 units

B1000 units

C2000 units

D4000 units

Answer : C

Question 4

Which of the following types of graph uses cumulative frequency distributions to illustrate information?

ABar chart

BHistogram

CScatter graph

DOgive

Answer : D

Question 5

Which THREE of the following are examples of supply-side policies?

AIncreasing investment in vocational training for unemployed youth

BProviding tax incentives to firms investing in new technology

CReducing the rate of value added tax applied to consumer goods

DIncreasing current expenditure on a national medical service

EIntroducing a funding scheme to support university research

FApplying a tariff on the import of foreign technology

Answer : A, B, E

Question 6

A business sells 10,000 units of its product pet month at a unit price of $10 It reduces the pnce to $88,000 per unit As a result its total reviewed $88,000 per month. What is the price elasticity of demand for this product?

A+1.87

B+0.6

C-2

D-0.5

Answer : D

Question 7

Which of the following can be used by a national government as justification for introducing a protectionist trade policy?

ATo promote the development of an infant industry

BTo allow specialisation

CTo promote economies of scale

DTo increase competition.

Answer : A

CIMAPRA17-BA1-1 BA1 - Fundamentals of Business Economics Exam Practice Test