CIMA CIMAPRA17-BA1-1 Exam Practice Test Instant Access

Question 1

A client agrees to invest S100,000 three years from now in a business project, and decides to deposit funds today in a bank account that pays 6 percent compound interest annually.

How much does the client need to deposit in order to be able invest $100,000 in three years time?

A$82,000

B$83,961.93

C$119101.6

D$83,748.43

Answer : D

Question 2

industrial action is more likely to occur within a large organisation than a small organisation, due to senior management becoming re managers becoming complacent, as well as shop floor hostility. The effect of this will be an increasing average cost as production

The statement above is most closely describing an example of which of the following?

AExternal diseconomy of scale.

BInternal diseconomy of scale

CInternal economy of scale

DExternal economy of scale

Answer : B

Question 3

Which of the following would lead to an increase in a firm's share price?

AManagement announces that profits are still rising in line with the forecasts in its published 5 year plan

BManagement announces that profits will be higher than had previously been forecast

CA rise in the rate of interest available from investing in government securities

DManagement announces that new laws on working conditions have forced them to close a profitable factory earlier than had been expected

Answer : B

Question 4

Dividend income from shares held overseas is recorded in which of the following balance of payments components?

ACapital account

BFinancial account

CProfit account

DCurrent account

Answer : B

Question 5

Which of the following sets of conditions will lead to greater stability (or convergence) of prices in the Cobweb model (or Cobweb theorem)?

APrice elastic demand, price inelastic supply

BPrice inelastic demand, price elastic supply

CPrice elastic demand, price elastic supply

DPrice inelastic demand, price inelastic supply

Answer : A

Question 6

If the demand curve for good A is negatively sloped, a fall in the price of a substitute good B results in

AAn increase in the quantity demanded of good A

BA rightward shift in the demand curve for good A

CA leftward shift in the demand curve for good B

DA leftward shift in the demand curve for good A

Answer : D

Question 7

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

ALift quantitative restrictions on bank lending

BLower the capital adequacy requirements for banks

CBuy government bonds from the banks

DEase the liquidity ratios banks need to hold

Answer : C

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