Fundamentals of Business Economics
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A car dealer uses the following trend equation to estimate the number of cars sold each quarter
Y = 120 + 3t
Where y = number of cars sold each quarter and t = time period expressed in units
What is the forecasted number of cars sold in period 12. if there is an additive seasonal factor of 55?
Company GHI wishes to develop a linear model for forecasting tractor sales based on the number of sales people it employs. In the model, tractor sales will be the dependent variable and the number of sales people the independent variable
The company has collected sales data from each of its branches over the past year which has been reported below:
The following scatter diagram displays the total life expectancy in years on the X axis and GDP per capita (constant 2000 S) on the Y axis, in Country S for the past 40 years. Which of the following statements is true in respect of the graph?
An institution offers an 8 percent compound interest rate annually for six years, for an investment of S250,000 What is the total amount of interest that would be received over the six years'?
Which of the following types of graph uses cumulative frequency distributions to illustrate information?
If the production of a good involves an external social cost, resource allocation could be improved by:
Which of the following organisational arrangements is an example of a multinational corporation (MNC)?
An investor has bought a financial asset that pays a variable interest rate at the end of a three-year period At the same time, the invest forward rate agreement (FRA) on an agreed forward rate of 3% at the asset's maturity. What is the advantage of the FRA?
Country A's tax system is one where every citizen pays tax on earned income over S12,000 per year. The amount of tax paid as a percentage of income rises as individuals income levels rise.
Which of the following describes the nature of the tax paid by individuals in Country A?
Which of the following will result in an increase in demand for domestic currency?
Which TWO of the following are positive impacts for a national economy which hosts a multinational company's (MNC) production facilities within their country"?
A market is in equilibrium. If the government imposes a minimum price above the equilibrium price, there will be:
Firms in competitive markets can earn only normal profit in the long run because:
If a manufacturing firm contributes to global warming as a byproduct of its production process, this is an example of
Why do monopoly market structures charge higher prices than would be charged by more competitive market structures?
The 'satisfying' model of business behavior states that business will aim to:
All of the following would tend to lead to an industry being dominated by a small number of firms except one. Which ONE is the exception?
The market demand for a good has a price elasticity of demand of 0.4. Which of the following statements is correct?
All of the following statements about a firms total revenue curve are true except which ONE?
Which of the following can be efficiently allocated between competing uses by the price mechanism?
A rise in the demand for petrol by motorists is likely to follow a rise in the price of:
Which of the following are examples of long run internal economies of scale?
i. Mass production using robot machine tool technology
ii. Obtaining lower prices when buying raw materials in bulk
iii. Long run technical change in the industry
iv. The emergence of specialized training institutions for the industry
v. Lower borrowing costs for large firms
vi. The spreading of fixed costs over a larger output
Country X is a country highly reliant on its oil exports. However, in recent months, oil prices have fallen by 20%. It is located near Country Y, an oil exporter which is a member of a trading bloc. Country X has some coal reserves, but faces stiff competition from Country Z, a member of the trading bloc, which also exports coal.
Which of the following would be the most effective way for the government to alleviate these circumstances?
Select ALL that apply.
The Lingford Miracle Association is a registered charity. It is closely associated with Lingford General Hospital. The charity has a number of goals.
Which of the following could potentially be goals set out by the Lingford Miracle Association given the information about the organisation that has been outlined?
The management of Pennyfarthing's Toy Bazaar requires financial advice, but is unsure of which type of bank to approach to acquire this. The company receives a profit of £1,000,000 a year, and currently operates in
Europe and North America.
Which of the following reasons explains why Pennyfarthings Toy Bazaar should use a wholesale bank?
Vencia has recently been faced with international condemnation due to its tendency to engage in 'dirty floating'. This is combined with high interest rates as well as underdeveloped industries.
What would likely be the result of these conditions on Vencia's trade?
Atu, a new social media platform, has launched an advertising campaign directed at areas of Country X where there is a higher proportion of young people than elsewhere.
Which source is most likely to have been used by Atu to acquire this data?
Which THREE of the following businesses are more likely to fare belter during a recession?
A clothes retailer has estimated a linear trend equation including trend, seasonal and cyclical components to forecast its sales for the next four quarters Which of the following factors would generate actual sales figures that are likely to differ markedly from the forecast?
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.
The government of Vencia has set out in its Budget a restrictive set of fiscal policies. These include raising VAT and the basic rate of income tax to 25%. The Bank of Vencia must now implement this Budget as monetary
policy.
Which of the following best outlines how the Bank of Vencia might do this?
'The £ has risen against other currencies since August, defying forecasters who thought that the UK's widening trade deficit must cause the £'s exchange rate to fall.'
From the above information, it can be concluded that, since August
All of the following would be likely to result from the process of globalization except one. Which ONE is the exception?
Miss Ruby designs and makes large ornaments for grand buildings. She is informed that her range of candle sticks have a price elasticity of-1.2
Which of the following plans would be most appropriate?
All of the following were features of the financial crisis of 2008 except one. Which ONE is the exception?
Real GDP per capita in an economy is directly affected by
(i). The quantity of resources located in the economy
(ii). How efficiently the economy uses resources when producing goods and services
(iii). The size of the working population
(iv). The flow of investment income from abroad
Which ONE of the following was NOT a contributor to the Global Banking Crisis after 2007?
Which of the functions of a financial intermediary is described by the following statement 'Bundles small deposits of liquidity into larger loans'?
Which of the following describes the eventual increase in bank deposits that will result from the banking system receiving an additional £2bn of cash deposits whilst holding a cash ratio (or reserve ratio) of 7%?
Which of the following might be regarded as benefits of the single currency, the Euro?
(i). Greater freedom for member countries to set their own interest rates
(ii). It is easier to compare prices of consumer goods in all countries using the Euro
(iii). A reduction in transactions costs for trade between countries using the Euro
(iv). Increased economic growth resulting from a more efficient common market
During recessions many governments borrow to give them funds to increase government expenditure on job creation schemes. They then repay the borrowed funds during the boom phase. This is an example of which of the following?
Which of the following provide possible explanations for the existence of a structure of interest rates?
(i). Borrowers having different risk profiles
(ii). Lenders wishing to lend for different time profiles
(iii). The market for loanable funds being perfectly competitive
(iv). The existence of margins between borrowing and lending rates
Which of the functions of a financial intermediary is described by the following statement 'Invests across a wide range of assets to reduce the loss of capital value if a particular borrower defaults'?
Following the emergence of the global banking crisis in 2007 many central banks undertook quantitative easing through purchasing bonds back from banks with new money. Which function of a central bank does this describe?
Which of the following are not classed as a non-bank financial intermediary?
Which of the functions of a financial intermediary is described by the following statement 'converts a flow of short-term deposits into a supply of long term loans'?
All other things remaining equal, which of the following would encourage a speculative short-term capital flow into a country's currency?
The imposition of a tariff on imported goods by a country's government will result in all of the following except one. Which ONE is the exception?
If a country joined an economic union (for example, the European Union) its business sector could benefit from all of the following except which one?
Which of the following assertions would not be consistent with supply side economics?
Which global institution is concerned with co-coordinating economic policies and agreeing banking and financial regulations?
All the following statements relate to an increase in government spending which is not accompanied by an increase in taxation. Which statement is NOT correct?
Which of the following statements about macroeconomic policy objectives is correct?
In the aggregate supply and demand model, a significant rise in the cost of energy for industry would lead to the
The business sector will be affected by a contraction in the money supply because
The level of national income in the circular flow will remain constant if
In a recession, the appropriate policy for a government seeking a recovery in the economy would be to:
A country has a trade deficit. The demand for its imports and exports are both price elastic. All of the following would lead to an a reduction in the country's trade deficit except which one?
TESTED 07 May 2024
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