A business has a short-term problem with its payments exceeding its receipts. Which TWO of the following would be appropriate for meeting this financial shortfall? (Choose two.)
A. A bank overdraft
B. A bill of exchange
C. A mortgage
D. Issuing shares
E. A leasing arrangement
For a typical business, which of the following is NOT a potential benefit of globalisation?
A. Lower cost sites for the location of production.
B. Simultaneously improved terms of trade for all countries.
C. Wider sources of supply for inputs.
D. Larger markets for outputs.
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 of the following are the likely consequences, in the domestic economy of a country, of an increase in interest rates?
1.
A rise in demand for capital goods.
2.
A fall in demand for consumer goods.
3.
A fall in demand for housing.
4.
A rise in the exchange rate.
A. 2, 3 and 4
B. 1, 3 and 4
C. 1, 2 and 4
D. 1, 2 and 3
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.
A company currently sells 10,000 bottles of "bright pink" nail varnish every year at $5 per bottle. If the price is reduced to $4.50 per bottle it is expected that the company will sell an extra 2,000 bottles.
What is the price elasticity of demand of the nail varnish?
A. -2.0
B. +2.0
C. -0.5
D. +0.5
Which of the following organizational arrangements is an example of a multinational corporation (MNC)?
A. An insurance company based in Country E opens a sales office in Country F in order to service the local market.
B. A music production company based in Country C signs a contract with an artist's management company based in Country D.
C. A retailer based in Country G uses an online retail platform in order to sell goods to customers in Country H.
D. A chain of restaurants based in Country signs a franchise agreement with a company that intends to open restaurants in Country A.
Company A is looking to protect itself from transaction exchange rate risk.
Company A does not require 100% of the value of transaction to be protected, and it would like the method it uses to have the following characteristics:
An agreed exchange rate for a specified period where both parties have a legal obligation.
A separation of the contract guaranteeing the price of the currency from the underlying transaction.
Which of the following would best provide the type of protection from exchange rate risk company A wants?
A. Future
B. Option
C. Forward contract
D. Floating exchange rate
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
Dividend income from shares held overseas is recorded in which of the following balance of payments components?
A. Capital account
B. Financial account
C. Profit account
D. Current account
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