Fundamentals of Business Economics (BA1) Practice Test

Questions # 51:

All of the following are features of the process of globalization except which one?

Options:

Increased flows of factors of production between economies.

Higher international disparities in rates of return on capital.

Increasing interdependence between economies.

Higher levels of trade in components and semi-finished goods.

Questions # 52:

The existence of a natural rate of unemployment means that

Options:

the short run Phillips curve is steeper that the long run Phillips curve.

nominal wages rise faster the prices in the long run.

governments cannot reduce unemployment below this level.

there is no trade-off between inflation and unemployment in the long run.

Questions # 53:

If a government adopted an expansionary fiscal policy of cutting direct taxes, the businesses that would benefit most would be those whose products:

Options:

Are largely bought on credit

Are largely exported

Have a high price elasticity of demand

Are sold mainly to individual consumers

Questions # 54:

Which of the following will be characteristics of the stakeholders most able to influence the management of an organization?

Options:

High power, low interest

High power, high interest

Low power, high interest

Low power, low interest

Questions # 55:

Which of the following would not be a reason for a government to impose a quota on imports?

Options:

To plan the orderly decline of industries that have lost comparative advantage

To prevent dumping

To protect infant and strategic industries

To prevent completely the country's citizens consuming an imported demerit good

Questions # 56:

The imposition of a tariff on imported goods by a country's government will result in all of the following except one. Which ONE is the exception?

Options:

A shift in domestic income from consumers to producers of the goods

A rise in the domestic price of the imported good

Greater cost push inflationary pressure in the economy

A shift to the left in the demand curve for the imported good

Questions # 57:

When central banks adopt a policy of 'quantitative easing' this means that they:

Options:

Lift quantitative restrictions on bank lending

Lower the capital adequacy requirements for banks

Buy government bonds from the banks

Ease the liquidity ratios banks need to hold

Questions # 58:

Lending to member states that are experiencing serious balance of payments problems is the role of:

Options:

The World Bank

The International Monetary Fund

The G8 Group

The World Trade Organization

Questions # 59:

The real rate of interest is

Options:

The rate of interest charged by banks on loans.

The nominal rate of interest adjusted for inflation.

The compound rate of interest.

The rate of interest charged on loans plus administrative charges.

Questions # 60:

Identify the source of funds most appropriate for a growing company to use which wishes to borrow funds long-term to pay for initial marketing research and promotion?

Options:

A debenture

A commercial bill

Ordinary shares

Overdraft

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