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.
Which of the following describes the slope of a normal supply curve?
A. Upwards from right to left.
B. Upwards from left to right.
C. Downwards from left to right.
D. Downwards from right to left.
A binding financial contract that can be used to hedge exchange rate risks by fixing the rate of exchange at a fixed date, and can be traded in financial markets, is known as:
A. an option
B. a managed floating system
C. a future
D. a forward exchange contract
Which of the following is correct regarding data? Data can be recorded as:
(1)
numbers.
(2)
symbols.
(3)
raw facts.
A.
(1) only
B.
(3) only
C.
(1) and (2)
D.
(1), (2) and (3)
Which of the following would tend to make the market supply of a good price inelastic?
A. There are few barriers to entry into the industry.
B. Many firms in the industry have unused production capacity.
C. Most firms in the industry have high stock levels of finished goods.
D. Newly employed workers in the industry require high levels of initial training.
What does the term 'equity financing' mean?
A. A company financing a short term cash flow shortage by borrowing from a financial intermediary.
B. A company investing its excess liquidity by purchasing shares.
C. A company selling off some of its tangible assets to pay for debts.
D. A company financing its liquidity deficit by issuing shares.
According to the principle of comparative advantage which of the following explains how country V may benefit from international trade?
A. Specialization and international trade will only be successful if tariffs are used to protect country V's economy.
B. Jobs historically done by country V's nationals have been off-shored to countries with cheaper labour costs.
C. Country V can specialize in exporting oil which it can produce relatively cheaply, and import goods.
D. Country V will only benefit from international trade if another country loses.
Futures are like forwards in that:
A. futures are a binding contract.
B. futures can be traded on future exchanges.
C. futures are standardized contracts for standardized amounts.
D. futures always cover the exact foreign currency exposure.
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
A client agrees to invest $100,000 three years from now in a business project, and decides to deposit funds today in a bank account that pays 6 percent compound interest annually.
How much does the client need to deposit in order to be able invest $100,000 in three years time?
A. $82,000
B. $83,961.93
C. $119101.6
D. $83,748.43
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