CIMA CIMAPRA17-BA1-1 Exam Practice Test Instant Access

Question 1

In the aggregate supply and demand model, a significant rise in the cost of energy for industry would lead to the

AAggregate supply curve moving to the right

BAggregate supply curve moving to the left

CAggregate demand curve moving to the right

DAggregate demand curve moving to the left

Answer : B

Question 2

Which ONE of the following is NOT a symptom of the principal-agent problem in company XYZ?

AThe pay of the directors of XYZ is not related to the company's financial performance

BXYZ loses money following a risky investment in a new line of business

CThe family of the Chief Executive of XYZ use the company jet for shopping trips

DXYZ's Board conceals information about losses from shareholders

Answer : B

Question 3

Which ONE of the following would be expected to reduce the net present value of a proposed investment project?

A rise in

Athe expected cash flows from the project

Bthe scrap value of the capital at the end of the project's life

Cinterest rates

Dthe net present value of alternative projects

Answer : C

Question 4

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 imported inputs.

iv. A worsening in that country's terms of trade.

v. A fall in the domestic prices of that country's imports.

vi. A rise in the domestic price of that country's exports.

A(i), (ii) and (iv) only

B(i), (iii) and (iv) only

C(ii), (v) and (vi) only

D(iv), (v) and (vi) only

Answer : B

Question 5

One of the features of an oligopoly market is that the pricing strategy of producers

Ais conditioned by the expected reaction of rival producers

Btends to ignore expectations about consumer reactions

Cis constrained by the absence of barriers to entry into the industry

Dis largely determined by government competition rules

Answer : A

Question 6

Atu, a new social media platform, has launched an advertising campaign directed at areas of Country X where there is a higher proportion of young people than elsewhere.

Which source is most likely to have been used by Atu to acquire this data?

ADemographic statistics published in a census

BThe l{ addresses of computers in these areas

CThe level of youth unemployment as recorded by the government

DThe prominence of other brands focused on young people in the area

Answer : A

Question 7

In a customs union member countries

AMeet to agree tariff increases affecting internal trade between themselves

BTrade freely with each other and impose their own national restrictions on trade with the rest of the world

CTrade freely with each other and accept a common external tariff for trade with the rest of the world

DReplace national currencies with a common currency such as the Euro

Answer : C

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