CIPS L3M1 Exam Questions Instant Access - No Installation Required

Question 1

Which of the following might result from increased costs of production (especially wages) without increased demand, so that producers have to increase their prices to maintain profitability?

ADemand-pull inflation

BCost-push inflation

CMonetary inflation

DStagflation

Answer : B

Inflation, in this case, is created by the increased cost of production coming through into the econ-omy.

The other answers are essentially names of alternative types of inflation.

Question 2

Shareholders of a limited company are not liable for unpaid debts'. True or false?

AFalse

BTrue

Answer : B

This is true: the liability of shareholders is limited to their agreed financial commitment, not beyond that.

Question 3

Which of the following would be / should be subject to health and safety legislation?

AAll of them

BSmoking cigarettes inside offices, factories and other buildings

CThe manual lifting of heavy objects

DFloors, passages and stairs should be properly constructed, maintained and kept clear

EThe need for appropriate firefighting equipment in a factory

Answer : A

All of these.

Question 4

Which one of the following is a document describing the requirement of a buying organisation, and may be used in seeking quotations or in a tender process? It may take the form of a written descrip-tion, drawing, model, chemical formula, etc.

ASpecification

BRequest for proposal

CRequisition

DService level agreement

Answer : A

Specification is the answer. The second sentence in the rubric makes it clear that this is the correct answer.

Question 5

Fiscal policy deals with:

AGovernment decisions and actions regarding the number of staff members employed in the government Treasury

BGovernment decisions and actions regarding the level of interest rates and supply of money in the economy

CGovernment decisions and actions regarding the balance between taxation revenue and public expenditure

DGovernment decisions and actions regarding exchange rates and unemployment in the economy

Answer : C

The correct answer simply describes what fiscal policy is.

This topic is often mentioned or discussed in serious radio / TV news broadcasts.

Question 6

The Paris Agreement is about:

AClimate change

BEuropean free trade

CTaxation on fashion houses

DRail freight rates

Answer : B

In 2015 an agreement was reached in Paris, France among most world nations to try to limit climate change and its effects.

The other answers shown are simply fictions.

Question 7

'The value of a commodity or service measured in terms of the standard monetary unit' describes:

AValue for money

BPrice

CValue added

DCost

Answer : B

The definition shown refers to the word 'price'. The price is what someone will pay for something - the extent to which a customer values something - and the reference to the standard monetary unit refers to, for example, a dollar, a Euro, a dinar or whatever.

The other answers are, to some extent, intended to confuse, as they use some of the words shown in the definition. Care must be taken not to jump to a conclusion here.

The response 'cost' should give pause for thought, as, in a sense, the cost of doing or making some-thing may have value. But value is determined by the customer - this definition is a reference to the value the customer would pay - the price.

CIPS Procurement and Supply Environments L3M1 Exam Questions