CIPS A6 Exam Practice Test Instant Access

Question 1

Which of the following best describes the term 'monetary policy'?

AThe government controlling economic activity by regulating the level of taxation

BThe government controlling economic activity by influencing public service provision

CThe government controlling economic activity by influencing the rate of interest

DThe government controlling economic activity by regulating monopolies.

Answer : B

Question 2

Which of the following types of unemployment describes people leaving one job and moving to another? (2 marks)

ACyclical

BFrictional

CMoving

DStructural

Answer : A

Question 3

Which of the following best defines the term 'Exchange rate'?(2 marks)

AThe amount of business transacted between one country and another during a year

BThe speed with which a company receives payment for goods or services sold

CThe extent of barter transactions in a particular country

DThe value of one country Oscurrency measured against that of another.

Answer : D

Question 4

Which of the following statements is correct about the relationship between supply and demand? (2 marks)

AWhen the price of a product is high, the quantity demanded will be high and the quantity supplied will be low

BWhen the price of a product is low, the quantity demanded will be low and the quantity supplied will be high

CWhen the price of a product is high, the quantity demanded will be low and suppliers will be more willing to supply products

DWhen the price of a product is low, the quantity demanded will be high and suppliers will be less willing to supply products.

Answer : C

Question 5

Which of the following best defines the term 'equilibrium price'? (2 marks)

AThe price at which the level of demand in a market exceeds the level of supply

BThe price at which all commodities are of equal value in a market

CThe price at which the level of supply in a market exceeds the level of demand

DThe price at which the level of supply in a market matches the level of demand.

Answer : D

Question 6

Which of the following best defines the term 'monetary policy'? (2 marks)

AThe control of taxation

BThe control over the amount of money in circulation and the cost of borrowing

CThe control of numbers of people unemployed compared to those employed

DThe control of wealth distribution

Answer : B

Question 7

In economic theory, which of the following statements best describes what is available and what is wanted? (2 marks)

ATime and motion

BSupply and demand

CResearch and development

DInput and output

Answer : B

CIPS A6 Analyzing the Supply Market Exam Practice Test