Fundamentals of Business Economics
Last Update Sep 21, 2025
Total Questions : 468
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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?
Bishops Financial Services has outsourced its HR Department to Resources4U.
Which of the following is most likely to be considered when deciding to outsource parts of the business to another company?
When the government intervenes in the market economy to correct a market failure
Which one of the following would raise both national income and disposable income ?
If in a boom a government adopted a contractionary (restrictive) monetary policy, a typical business would expect to experience:
i. Higher interest payments on its bank borrowing.
ii. Falling credit based sales.
iii. Higher income and corporate taxes.
iv. Lower sales to government agencies.
v. Difficulties in securing working capital
vi. Higher prices for imported components.
A firm is considering a large capital investment project. It is considering delaying it in case the government introduces special tax breaks for investment that will reduce the tax the firm pays. In which stage of the trade cycle is the government least likely to reduce taxation?
Country Y and country Z both impose tariffs on goods imported from each other. Which of the following would likely to be a long-term effect of the imposition of such tariffs?
Which ONE of the following best explains the statement 'In not for profit organizations money is a constraint and not a goal'?
In which of the stages of the trade cycle should the management accountant consider forecasting lower sales than in the previous year?
Which global financial institution is responsible for making long term loans to assist developing countries to invest and develop?
In a recession which ONE of the following would be likely to experience the largest fall in demand for its products?
All of the following would lead to fall in the circular flow of national income except which one ?
If out of every £20 million increase in national income, £2 million is saved, £4 million is spent on imports and £4 million is paid to the government in taxation, an increase in exports of £40 million will lead to an eventual increase in national income of
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?
Pills Pharmaceuticals has founded a new department which focuses on big data analysis. The organisation plans to perform this analysis using data collected by two subsidiaries, one based in London and the other in San Francisco.
Which of Gartner's 'Three Vs' is applicable to this scenario?
A business based in Country A. agrees to buy a software package from a company based in Country O tor 20.000 Country O dollars 12 months time. At the time of the contract the exchange rate was 1 O dollar (0$) to 1.5 Country A pounds (A£). When payment ism
Rate is O$1 to A£1 4.
What is the exchange rate gain (+) or loss (-) made by the Country A business?
Give your answer to a whole number.
Assuming Country A has a floating exchange rate which of the following would lead to a fall of the exchange rate for Country A and which rise m the exchange rate for Country A.
Complete the table below by matching the relevant label on the exchange rate of the scenarios listed.
An estimation regression is developed to test the linear relationship between the size of student population at a university and monthly sales of a nearby bookshop The correlation coefficient is equal to 0.9.
Which of the following will NOT cause an increase in the demand for public transport in City L?
Which of the following would tend to make the market supply of a good price inelastic?
Which of the following businesses is least likely to benefit from an appreciation of Country A's currency against Country B's currency?
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?
A study on a sample of 100 university students reports that the correlation coefficient between the students' attendance at accounting final accounting exam grade is 0.7.
Which of the following statements is true?
The government of Country Z imposes a tariff on all imports of coal from other countries Which THREE of the following are possible effects of this decision in Country?
Which of the following will result in an increase in demand for domestic currency?
Organisations are able to achieve more than individuals can achieve because they allow people to do which THREE of the following?
Which of the following is correct in regards to organisations?
Organisations achieve more than individuals can achieve on their own because they enable people to
(1) share skills and knowledge
(2) maximise individuals' interests.
(3) specialise
(4) pool resources
According to the principle of comparative advantage which of the following explains how country V may benefit from international trade?
Firms in competitive markets can earn only normal profit in the long run because:
RST plc wishes to maximize its profits. At present it is producing where MC is less than MR. Which ONE of the following would NOT be good advice for RST plc?
Which ONE of the following would tend to make the demand for a product price inelastic?
Which of the following is likely to cause the demand curve of margarine to shift to the left?
Which ONE of the following would make the market supply of a product price elastic?
A train company acknowledges that externalities may reduce the welfare of its customers when it provides
All of the following factors contribute to the instability of agricultural prices except which ONE?
All of the following are arguments for privatizing a public sector industry except which one?
Which of the following sets of conditions will lead to greater stability (or convergence) of prices in the Cobweb model (or Cobweb theorem)?
Which of the following are external stakeholders for an organization?
i. Shareholders
ii. Customers
iii. Government
iv. Trade Unions
v. Pressure groups
vi. Employees
Which one of the following policies to correct a balance of payments current account deficit is an example of an expenditure reducing policy?
In a system of freely floating exchange rates the central bank and government will
Which ONE of the following would be expected to reduce the net present value of a proposed investment project?
A rise in
Every year a household allows its bank account to become overdrawn for 3 months to pay for its annual holiday. Which one of the following statements correctly describes this?
Which of the following are not classed as a non-bank financial intermediary?
All of the following are examples of not-for-profit organizations except one. Which ONE is the exception?
Which ONE of the following is NOT an example of a long term financial need?
Which one of the following would lead to a fall (depreciation) in the exchange rate for a country's currency?
Which of the following is not a source of long-term capital for a company?
Identify the source of funds most appropriate for a growing company to use which wishes to borrow funds long-term to pay for initial marketing research and promotion?
£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
ToyTown, a soft toy manufacturer, produces what it claims to be the cheapest teddy bears on the market. The graph shows the current price of a ToyTown teddy bear and its relationship to the demand for ToyTown teddy
bears.
If the price of ToyTown teddy bears were to increase, what would happen to the demand?
Which of the following is a primary objective of a not-for-profit organisation?
A trade agreement that removes all import tariffs between member countries, sets up common external tariffs against non-members, but does not advance toward economic integration is called
Which THREE of the following businesses are more likely to fare belter during a recession?
Golden Crisp Cereals has calculated that its demand price elasticity is -1.4. It wants to expand in order to produce more cereal and hence increase its sales.
Which of the following are ways in which Golden Crisp Cereals could expand in the short run?
Select ALL that apply.
Brilliant Buys Local is a subsidiary of Brilliant Buys, and operates a number of smaller stores in local neighbourhoods.
The managing director of Brilliant Buys Local, Mr Davidson, has been given a scatter diagram with sales of each store based on the size of the local population.
Which of the following options outlines the best ways to interpret this diagram in this context?
Select ALL that apply.
The economy of Country V is initially in equilibrium at a level of national income and employment denoted by Y, at price level denoted by P If there is an increase in aggregate demand, indicate on the graph below the new equilibrium point in the economy.
The market demand for a good has a price elasticity of demand of 0.4. Which of the following statements is correct?
In the short run, which of the following would result from a depreciation of the country's exchange rate?
(i). Increased competitiveness of the country's exports
(ii). Increased quality competitiveness of the county's imports
(iii). A worsening of the country's terms of trade
(iv). Increased energy and raw material costs for the country's manufacturing firms
Select the best definition of the corporate governance of a company from the list below.
Which of the following describes a 'spot rate' in foreign currency dealing?
Which one of the following methods of government borrowing is most likely to be inflationary?
The sale of:
TESTED 21 Sep 2025
