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Fundamentals of Business Economics

Last Update 23 hours ago
Total Questions : 468

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Question # 11

The term 'financial intermediation' refers to the role of:

Options:

A.  

commercial banks m providing credit facilities for customers

B.  

banks in providing business customers with access to financial markets

C.  

the financial system in linking net savers with net borrowers.

D.  

central banks as providers of liquidity to the banking system

Discussion 0
Question # 12

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?

Options:

A.  

Progressive

B.  

Regressive

C.  

Retentive

D.  

Proportional

Discussion 0
Question # 13

Which of the following will result in an increase in demand for domestic currency?

Options:

A.  

An increase in exports.

B.  

A rise in imports.

C.  

More domestic companies invest abroad.

D.  

Outward financial flows.

Discussion 0
Question # 14

Which TWO of the following are positive impacts for a national economy which hosts a multinational company's (MNC) production facilities within their country"?

Options:

A.  

Mobile MNCs mean that operations can easily be transferred from one economy to another.

B.  

MNCs provide employment opportunities in other countries for skilled workers from the host country.

C.  

Local producers can copy superior processes from the MNC which raises productivity within the recipient economy.

D.  

Direct financial investment should improve economic welfare as capital is transferred to economies where the marginal rate of return on capital is highest

E.  

MNCs can use transfer pricing to ensure taxes are minimised within a recipient economy.

Discussion 0
Question # 15

A market is in equilibrium. If the government imposes a minimum price above the equilibrium price, there will be:

Options:

A.  

an extension in demand, a contraction in supply and a market shortage

B.  

a decrease in demand, an extension in supply and a market surplus

C.  

a contraction in demand, an increase in supply and a market surplus

D.  

a contraction in demand, an extension in supply and market surplus

Discussion 0
Question # 16

Firms in competitive markets can earn only normal profit in the long run because:

Options:

A.  

they produce homogeneous products

B.  

there are no barriers to entry into these markets

C.  

production costs are the same for all producers

D.  

of the absence of economies of scale

Discussion 0
Question # 17

If a manufacturing firm contributes to global warming as a byproduct of its production process, this is an example of

Options:

A.  

A merit good

B.  

An external social cost

C.  

A diseconomy of scale

D.  

A public good

Discussion 0
Question # 18

Why do monopoly market structures charge higher prices than would be charged by more competitive market structures?

Options:

A.  

They are more likely to suffer from diseconomies of scale

B.  

They must recover their higher research and development expenditures

C.  

They can increase profits by reducing output to force prices higher

D.  

They have barriers to entry that stop customers going to new markets

Discussion 0
Question # 19

The 'satisfying' model of business behavior states that business will aim to:

Options:

A.  

seek profits as the primary business objective

B.  

concentrate on the long run growth of sales

C.  

attempt to meet the differing demands of various stakeholders

D.  

satisfy shareholders demands to maximize shareholder wealth

Discussion 0
Question # 20

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?

Options:

A.  

Significant economies of scale in production

B.  

The existence of entry barriers to the industry

C.  

High initial capital costs in production

D.  

Extensive consumer knowledge of products and prices

Discussion 0
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