Fundamentals of Business Economics (BA1) Practice Test

Questions # 61:

Which of the following is NOT a suitable way for a manufacturing company to finance buying assets?

Options:

Certificates of deposit

Commercial bills

Commercial bonds

Leases

Questions # 62:

In the short run, which of the following would result from a depreciation of the country's exchange rate?

(i). Increased competitiveness of the country's exports

(ii). Increased quality competitiveness of the county's imports

(iii). A worsening of the country's terms of trade

(iv). Increased energy and raw material costs for the country's manufacturing firms

Options:

(i) and (ii) only

(ii) and (iv) only

(iii) and (iv) only

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

Questions # 63:

In a system of freely floating exchange rates the central bank and government will

Options:

Not need to engage in exchange equalization

Allow market forces to determine the exchange rate within a strictly limited band

Have less ability to control the money supply than in a fixed exchange rate system

Have to intervene in foreign exchange markets in order to maintain the system

Questions # 64:

Which of the following describes a 'spot rate' in foreign currency dealing?

Options:

It is a short term rate that may change in the immediate future

It is the price for a currency that is to be delivered immediately

It is the exchange rate minus any commissions or transactions charges

It is the exchange rate minus the inflation rate

Questions # 65:

The International Monetary Fund uses the funds at its disposal to

Options:

Assist national governments with a budget deficit

Assist national governments to repay their National Debts

Finance specific development projects in Third World countries

Help member countries with temporary balance of payments deficits

Questions # 66:

Why was the Global Banking Crisis of 2007 followed by a credit crunch of low lending?

Options:

Governments sought to reduce aggregate demand to avoid a boom

Households and firms were unwilling to borrow

Banks had lost reserves and could not support high lending

Households had stop saving due to loss of confidence in commercial banks

Questions # 67:

A business could meet a short term financial need by all of the following except one. Which ONE is the exception?

Options:

Using its cash reserves

A bank overdraft

Issuing shares

Factoring

Questions # 68:

What international convention regulates banking?

Options:

Basel 3

GATT

G20

Competition Act

Questions # 69:

Which ONE of the following financial instruments is NOT issued for long term borrowing by the issuer?

Options:

Treasury bills

Equities

Treasury bonds

Mortgages

Questions # 70:

Which theory of the firm is described by the following statement?

'The decisions of management are the result of a political maneuvering of the various stakeholders connected to the organization.'

Options:

Profit maximizing

Satisfying

Behavioral

Managerial

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Viewing questions 61-70 out of questions

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