CIMAPRO17-BA1-X1-ENG Online Practice Questions and Answers

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:

A. an economic union.

B. a customs union.

C. a free trade area.

D. a common market.

Commercial banks can create credit because:

A. central banks are 'lenders of last resort' and provide commercial banks with cash when needed.

B. banks are required to hold enough capital to meet bad debts.

C. banks hold accounts at the central bank which are available as cash.

D. customers only want some of their deposits in the form of cash in any given period.

An institution offers an 8 percent compound interest rate annually for six years, for an investment of $250,000.

What is the total amount of interest that would be received over the six years?

A. $370,000.00

B. $396,718.58

C. $146,718.58

D. $120,000.00

Setting a minimum wage above the equilibrium wage:

A. has no effect on unemployment, and setting a minimum wage below the equilibrium wage results in increased unemployment.

B. results in increased unemployment, and setting a minimum wage below the equilibrium wage has no effect on unemployment.

C. results in decreased unemployment, and setting a minimum wage below the equilibrium wage results in increased unemployment.

D. results in increased unemployment, and setting a minimum wage below the equilibrium wage results in decreased unemployment.

Market price refers to:

A. the price that is determined by demand and supply.

B. the price that includes tax.

C. the value that is adjusted for inflation.

D. the price that maximizes profits.

Public goods are usually provided by the government because:

A. individual users do not have sufficient knowledge to appreciate their importance.

B. individual users do not have sufficient incentives to privately fund their provision.

C. individual users do not have sufficient bargaining power to secure a low price.

D. individual users do not have sufficient funds to purchase them.

Which THREE of the following are characteristics of good information? (Choose three.)

A. Accuracy

B. Confidentiality

C. Verifiability

D. Accessibility

E. Trustworthiness

F. Relevance

The following table shows the profits of a business and an index of the general price level for 4 years.

How does the level of real (inflation adjusted) profits in 20X4 compare to those of 20X1?

A. + $18m

B. + $12.5m

C. + $3m

D. + $0.6m

Country A's tax system is one where every citizen pays tax on earned income over $12,000 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?

A. Progressive

B. Regressive

C. Retentive

D. Proportional

Which TWO of the following policy actions might be available to a government that wishes to reduce a deficit in the balance of payments? (Choose two.)

A. Devaluate the exchange rate in order to increase exports.

B. Increase the money supply in order to stimulate domestic consumption.

C. Appreciate the exchange rate in order to reduce imports.

D. Reduce the interest rate in order to stimulate investment.

E. Introduce tariffs on imported goods in order to favour domestic producers.

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A business analyst has computed a trend regression for the sales of company X. The following table reports the ratios between the actual quarterly sales of company X and the calculated trend, for a period of four years.

What is the seasonal component in the fourth quarter? Give your answer to three decimal places.

A. 0.563

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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.

Calculate the coefficient of determination to two decimal places:

A. 0.31

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The following cash flows are for a capital project where the required rate of return is 8 percent.

Calculate the NPV for the project. Give your answer to the nearest whole number.

A. 106,000

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A company in Country M owns a subsidiary in Country valued at O$200 million. The rate of exchange between the Country M dollar (M$) and the Country dollar (O$) is O$1 - M$6.

If the Country M $ depreciated by 10% what would be the increase or decrease in the M$ valuation of the subsidiary?

Give your answer in whole millions and indicate whether it is an increase or decrease.

A. 1.3 million increase (+)

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A clothes retailer wants to compute the Pearson's correlation coefficient between the number of shirts sold per day (x) and the number of jackets sold per day (y), across its eight stores (n=8).

If Σx = 256, Σy = 137, Σx² = 14278, Σy² = 4991 and Σxy = 8277, what is the Pearson's correlation coefficient? Give your answer to two decimal places.

A. 0.65