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Fundamentals of Business Economics

Last Update 23 hours ago
Total Questions : 468

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Question # 31

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?

Options:

A.  

To provide care for those who are terminally ill

B.  

To maintain a reasonable profit which can then be given as dividends to shareholders

C.  

To use the funding provided by government to further the primary cause of the organisation

D.  

To offer bonuses to the managing director of the organisation when a certain number of sales is reached in a year

E.  

To encourage members of the public to invest in the organisation through buying shares

Discussion 0
Question # 32

Governments provide public goods, such as street lighting, because

Options:

A.  

private business providers would exploit consumers and make excess profits

B.  

it would be an unprofitable activity for private business because of the free-rider problem

C.  

governments are more efficient producers of such goods

D.  

there are significant external costs in the production process

Discussion 0
Question # 33

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?

Options:

A.  

It has a profit of £100,000

B.  

It has international operations

C.  

It uses the Alternative Investment Market

D.  

It has issued new shares to members of the public

E.  

It is a medium-sized business

Discussion 0
Question # 34

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?

Options:

A.  

A lack of investment from businesses in the long-term

B.  

Some investment in the short-term due to high interest rates

C.  

Other countries responding to Vencia's 'dirty floating' in a protectionist manner

D.  

The Bank of Vencia buying treasury bonds to loosen its monetary policy

E.  

The government of Vencia increasing its VAT and basic rate of income tax further

Discussion 0
Question # 35

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?

Options:

A.  

Demographic statistics published in a census

B.  

The l{ addresses of computers in these areas

C.  

The level of youth unemployment as recorded by the government

D.  

The prominence of other brands focused on young people in the area

Discussion 0
Question # 36

Which THREE of the following businesses are more likely to fare belter during a recession?

Options:

A.  

A construction company specialising in road infrastructure

B.  

A producer of rice, a staple good

C.  

A producer of automobiles, a durable good.

D.  

A producer of security equipment, a counter-cyclical good

E.  

A retailer specialising in fashion, a cyclical good.

F.  

A construction company specialising in private residential accommodation

Discussion 0
Question # 37

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?

Options:

A.  

A drop in sales due to emergency roadwork blocking access to the store

B.  

A drop in sales due to the ongoing economic recession.

C.  

An increase in sales due to the increasing popularity of their brand.

D.  

An increase in sales before a major religious festival

Discussion 0
Question # 38

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.

Options:

A.  

Release a new protein shake, QuenchFit

B.  

Publishing an advert in a major magazine promoting QuenchFit and the benefits of healthy living

C.  

Relocate the company to a country with less strict public health guidelines

D.  

Continue as normal

E.  

Appoint a new CEO

Discussion 0
Question # 39

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?

Options:

A.  

Halt all ongoing quantitative easing programmes, buy bonds at a higher interest rate and sell treasury bills

B.  

Implement quantitative easing programmes, sell bonds and buy treasury bills

C.  

Lower the capital adequacy ratio, increasing banks' lending power

D.  

Implement quantitative easing programmes, buy bonds and treasury bills

Discussion 0
Question # 40

'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

Options:

A.  

UK exports have become less price competitive

B.  

The UK inflation rate has increased

C.  

UK interest rates must have increased

D.  

The strengthening pound has improved the UK balance of payments on current account

Discussion 0
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