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BA1 Exam Dumps - Fundamentals of Business Economics

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Question # 57

If an economy went into a recession, which industry would experience the largest proportionate fall in sales, output and employment?

A.

Retail supermarkets

B.

Food processing industry

C.

Petrol retailing

D.

Luxury good manufacturers

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Question # 58

The level of national income in the circular flow will remain constant if

A.

injections are greater than withdrawals

B.

injections are equal to withdrawals

C.

injections are equal to savings

D.

injections plus withdrawals are equal to savings plus investment

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Question # 59

The business sector will be affected by a contraction in the money supply because

A.

Interest rates will tend to fall, thus reducing business costs.

B.

Inflation will fall and thus demand in the economy will expand.

C.

Consumer credit will contract thus reducing consumer demand.

D.

The exchange rate will fall thus making business more internationally competitive.

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Question # 60

In which of the stages of the trade cycle should the management accountant consider forecasting lower sales than in the previous year?

A.

Recession

B.

Depression

C.

Recovery

D.

Boom

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Question # 61

If central bankers wished to agree and implement new measures to assure the security of global banks, which ONE of the following bodies would they use?

A.

The IMF

B.

The World Bank

C.

The WTO

D.

The G20

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Question # 62

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?

A.

Aggregation

B.

Medium term borrowing

C.

Funding

D.

Open market operations

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Question # 63

If a central bank adopted an expansionary monetary policy the effects would include A.

A.

rise in interest rates

B.

rise in exchange rate

C.

fall in the rate of inflation

D.

rise in bond prices

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Question # 64

£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

A.

£90

B.

£190

C.

£900

D.

£1000

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