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Free CIMA BA1 Practice Exam with Questions & Answers | Set: 2

Questions 11

Which ONE of the following is NOT required in calculating the EPS of ABC plc?

Options:
A.

The market price of ABC's share

B.

The number of shares ABC has in issue

C.

The most recent earnings after interest and tax of ABC

D.

The dividend payment made to holders of preference shares

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Questions 12

Which one of the following policies to correct a balance of payments current account deficit is an example of an expenditure reducing policy?

Options:
A.

Depreciation of the currency.

B.

The imposition of an import tax.

C.

Increased income tax.

D.

The use of import quotas.

Questions 13

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

Options:
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

Questions 14

In a recession, the appropriate policy for a government seeking a recovery in the economy would be to:

Options:
A.

cut public expenditure, reduce taxes, and lower interest rates

B.

raise public expenditure, reduce taxes and lower interest rates

C.

raise public expenditure, raise taxes and lower interest rates

D.

cut public expenditure, raise taxes and raise interest rates

Questions 15

The existence of a natural rate of unemployment means that

Options:
A.

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

B.

nominal wages rise faster the prices in the long run.

C.

governments cannot reduce unemployment below this level.

D.

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

Questions 16

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

Options:
A.

A loss making project

B.

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

C.

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

D.

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

Questions 17

Which ONE of the following would best indicate that economic growth is taking place?

An increase in:

Options:
A.

The economy's output gap

B.

Investment to make good wear and tear of the national capital stock

C.

Investment in human capital

D.

Gross domestic product sustained over a number of years

Questions 18

All of the following are characteristics of a recession except which one?

Options:
A.

Rising levels of unemployment.

B.

Increased inflationary pressure.

C.

Improving trade balances.

D.

Increased government budget deficits.

Questions 19

All of the following items would appear as a credit on the current account of a country's balance of payments accounts except which one?

Options:
A.

Interest payments on financial assets held overseas.

B.

Exports of manufactured goods.

C.

Outflows of capital.

D.

Expenditure by visiting foreign tourists.

Questions 20

Which ONE of the following is regarded as a general characteristic of an organization?

Options:
A.

Controlled performance of its activities

B.

Social goals towards society

C.

Collective goals towards society

D.

Social arrangement of people