CIMA CIMAPRA17-BA1-1 Exam Practice Test Instant Access

Question 1

Jacob's Tobacconists have recently been hit by the increase in tax on tobacco products in the UK. The graph shows the drop in demand after the tax was applied to these products.

What might the amount denoted by the difference between PO and P1 on the graph be used for?

ATo fund public health services in the UK

BTo add to the profits of Jacob's Tobacconist

CTo invest in other tobacconists and cigarette producers situated in the UK

Answer : A

Question 2

In recent years, consumer groups have become more vocal in calling for the boycott of producers whose suppliers do not comply with international regulations on workplace safety and child labour A fashion company that outsources its production to low labour cost countries should include this phenomenon in which part of their PESTEL framework?

Answer : A

Question 3

The incentive for two countries to trade with each other would be reduced or removed by

(i). people in both countries having similar tastes and preferences

(ii). per capita income being much higher in one country than in the other

(iii). transport costs between the two countries exceeding the output gain from trade

(iv). the industries in both countries suffering from significant decreasing returns to scale

A(i) and (ii) only

B(ii) and (iv) only

C(iii) and (iv) only

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

Answer : C

Question 4

Which ONE of the following conditions would lead to instability over time in the incomes of producers of primary products?

ABoth demand and supply tend to be price inelastic

BLarge shifts in demand combined with supply that is price inelastic

CLarge supply shifts under the impact of unstable weather conditions

DBoth demand and supply tend to be price elastic

Answer : B

Question 5

Which ONE of the following statements about the 'divorce of control from ownership' is true?

AIf an organization is controlled by managers, profit will no longer be an objective for business organizations

BIssues of corporate governance would not arise if shareholders had effective control of business organizations

CRemuneration schemes for directors which are linked to share prices encourage the divorce of control from ownership

DManagerial objectives are likely to be related to the size and growth of the organization rather than shareholder value

Answer : D

Question 6

100 of new cash is issued, which is then deposited in a bank which is part of a banking system operating a cash ratio of 10%. The maximum possible increase in the money supply which can follow from this transaction, additional to the initial deposit, is

A90

B190

C900

D1000

Answer : C

Question 7

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

AThe World Bank

BThe International Monetary Fund

CThe G8 Group

DThe World Trade Organization

Answer : B

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