CIMA BA1 Exam Questions Free Practice Test

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Questions # 51:

A 'supply-side' economist would recommend that in the long term, a country's unemployment problem should be tackled by

Options:

A reduction in the money supply

Income tax cuts to promote labor market incentives

Tax cuts to expand aggregate demand

Increasing the job-seekers allowance and the period for which it can be claimed

Expert Solution

Questions # 52:

Which of the following best defines “aggregate supply”?

Options:

The stock of output available for sale in an economy

The full employment level of output of the economy

The flow of goods and services produced by an economy during the year

The level of prices at which output can be sold in an economy

Expert Solution

Questions # 53:

The consequences of globalization for national economies include all of the following except which one?

Options:

Greater independence in economic policy making.

Increased international trade and capital flows.

Greater synchronization of trade cycles.

Increased vulnerability to external economic shocks.

Expert Solution

Questions # 54:

The existence of a natural rate of unemployment means that

Options:

the short run Phillips curve is steeper that the long run Phillips curve.

nominal wages rise faster the prices in the long run.

governments cannot reduce unemployment below this level.

there is no trade-off between inflation and unemployment in the long run.

Expert Solution

Questions # 55:

All of the following would result from a shift from direct to indirect taxes except which one?

Options:

An increase in the prices of products due to inflation.

A reduction in the disincentive to work and effort.

A more progressive taxation system.

A shift in the burden of taxation towards lower income groups.

Expert Solution

Questions # 56:

Which of the following best describes a project that has a negative Net Present Value?

Options:

A loss making project

A project that doesn't make enough profit to pay the interest on the money borrowed to invest in it

A project that doesn't make sufficient returns to fully compensate investors for the funds they invest in it

A project that will only start making profits after the present year has finished

Expert Solution

Questions # 57:

Which of the following industries would be expected to have the largest number of businesses operating within them?

Options:

Automobiles

Banking and insurance

Commercial airlines

Agriculture

Expert Solution

Questions # 58:

If a firm wishes to maximize market share without incurring a loss, it should set its price where

Options:

Marginal revenue is zero

Marginal revenue equals marginal cost

Price equals marginal revenue

Total cost equals total revenue

Expert Solution

Questions # 59:

Whenever demand for a good is price elastic, an increase in price will

Options:

Increase monopoly power

Increase consumer expenditure on the good

Increase consumer expenditure on a good in joint demand

Decrease total consumer expenditure on the good

Expert Solution

Questions # 60:

All of the following would tend to make the demand for a good highly price elastic except one. Which ONE is the exception?

Options:

There are many close substitutes for the good

The time period under consideration is long

The good is a luxury

The proportion of consumer income spent on the good is small

Expert Solution

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