CIMA CIMAPRA17-BA1-1 Exam Questions Instant Access

Question 1

The government may wish to control horizontal mergers between firms because

AFirms will acquire control of their sources of supply

BMergers lead to large companies and economies of scale

CSuch mergers result in increased concentration in industries

DIt is against consumer interests for producers to acquire control of retail outlets

Answer : C

Question 2

Which TWO of the following policy actions might be available to a government that wishes to reduce a deficit in the balance of payments?

ADevaluate the exchange rate in order to increase exports.

BIncrease the money supply in order to stimulate domestic consumption.

CAppreciate the exchange rate in order to reduce imports.

DReduce the interest rate in order to stimulate investment.

EIntroduce tariffs on imported goods in order to favour domestic producers.

Answer : A, D

Question 3

Betsy's Fish Foods Pic. has issued shares in a prospectus.

Which of the following are benefits of selling shares in this manner?

Select ALL that apply.

AIt allows companies to open up its investor base

BIt allows more investors to receive profits in the form of dividends from the company

CIt allows the company to sell shares at a discounted price

DIt allows the company to sell shares to larger private firms who can invest more money into the company

EIt allows the company to sell second-hand shares

Answer : A, B

Question 4

Which of the following is an invisible import for a country?

AExpenditure in its shops by foreign diplomats based in the country

BThe country's contribution to foreign aid

CA foreign company signing a contract guaranteeing to invest in a new factory in the country

DRepayment of an IMF loan by the country's government

Answer : B

Question 5

All of the following items would appear as a credit on the current account of a country's balance of payments accounts except which one?

AInterest payments on financial assets held overseas.

BExports of manufactured goods.

COutflows of capital.

DExpenditure by visiting foreign tourists.

Answer : C

Question 6

Inflation is undesirable for all of the following reasons except which one?

AInflation decreases the international competitiveness of the business sector.

BInflation distorts the price system and the process of resource allocation.

CInflation shifts wealth from debtors to creditors in an arbitrary fashion.

DInflation makes business forecasting and planning more difficult.

Answer : C

Question 7

The share price of Quench Drinks has been steadily falling for several years despite steady sales and a slight market share increase over the last 5 years. They have been criticised for being full of sugar and not

capitalising on the health food trend.

Quench are starting to face pressure from their shareholders to push the share price back up.

Which of the following would be most likely to improve Quench's standing in the soft drinks market?

Select ALL that apply.

ARelease a new protein shake, QuenchFit

BPublishing an advert in a major magazine promoting QuenchFit and the benefits of healthy living

CRelocate the company to a country with less strict public health guidelines

DContinue as normal

EAppoint a new CEO

Answer : A, B

CIMA BA1 - Fundamentals of Business Economics CIMAPRA17-BA1-1 Exam Questions