CIMA CIMA Certifications CIMAPRO17-BA1-X1-ENG Questions & Answers

• Question 41:

  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 Z? (Choose three.)

  A. The cost of living will fall.

  B. Employment in the coal industry will increase.

  C. The balance of payment will improve.

  D. Government's revenue will improve.

  E. Coal producers will adopt new technologies to improve efficiency.

  F. More resources will be allocated to alternative energy sources.

  Correct Answer: CDF

• Question 42:

  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.

  Correct Answer: C

• Question 43:

  The following scatter diagram displays the total life expectancy in years on the X axis and GDP per capita (constant 2000 $) on the Y axis, in Country S for the past 40 years. Which of the following statements is true in respect of the graph?

  

  A. A perfect positive linear relationship is shown in the diagram.

  B. In most years, the samples shows a clear negative trend in the diagram.

  C. There is no correlation between the level of GDP per capita and life expectancy.

  D. In some years, the level of GDP per capita and life expectancy moved in opposite directions.

  Correct Answer: D

• Question 44:

  Which of the following statements defines a diseconomy of scale?

  A. A reduction in the unit average cost caused by increasing the scale of production in the long run.

  B. An increase in the unit average cost caused by increasing the scale of production in the long run.

  C. An increase in the unit average cost caused by decreasing the scale of production in the long run.

  D. A reduction in the unit average cost caused by decreasing the scale of production in the long run.

  Correct Answer: C

  Reference: https://www.acowtancy.com/textbook/cima-ba1/economic-and-social-considerations-and-the-regulation-of-markets/diseconomies-of-scale/notes

• Question 45:

  Organizations are able to achieve more than individuals can achieve because they allow people to do which THREE of the following? (Choose three.)

  A. To devolve decision-making

  B. To pool resources

  C. To share skills and knowledge

  D. To specialize

  E. To earn profits

  F. To create hierarchies

  Correct Answer: BCD

  Reference: https://kaplanpublishing.co.uk/docs/librariesprovider3/look-inside/cima/certificate/fundamentals-of-business-economics-ba1/look-inside-study-text-2020-ba1-fundamentals-of-business-economics.pdf?sfvrsn=8bbc7a01_2 (21)

• Question 46:

  Company A owns a factory in a foreign country. Which of the following types of exchange rate risk is company A most likely to experience in relation to the value of the factory?

  A. Economic risk

  B. Energy risk

  C. Transaction risk

  D. Translation risk

  Correct Answer: D

  Reference: https://webcache.googleusercontent.com/search?q=cache:rUr_SO58tB8J:https://www.acowtancy.com/textbook/cima-ba1/d3-impact-of-changes-in-interest-and-exchange-rates-on-controlling-and-measuring-businessperformance/ impact-of-exchange-rate-changes/notes+andcd=1andhl=enandct=clnkandgl=pkandclient=opera

• Question 47:

  A manufacturing company is considering a new investment project.

  Which TWO of the following would reduce the net present value of the investment to the business? (Choose two.)

  A. A rise in the scrap value of the project at the end of its life.

  B. A reduction in the expected level of future sales.

  C. A rise in interest rates.

  D. A fall in the initial capital cost of the project.

  E. An expected fall in the future price of components used by the business.

  Correct Answer: CE

• Question 48:

  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.

  Correct Answer: C

• Question 49:

  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?

  A. A drop in sales due to emergency roadwork blocking access to the store.

  B. A drop in sales due to the ongoing economic recession.

  C. An increase in sales due to the increasing popularity of their brand.

  D. An increase in sales before a major religious festival.

  Correct Answer: D

• Question 50:

  In recent years, consumer groups have become more vocal in calling for the boycott of producers whose suppliers do not comply with international regulations on workplace safety and child labour. A fashion company that outsources its production to low labour cost countries should include this phenomenon in which part of their PESTEL framework?

  A. T

  B. E

  C. S

  D. P

  Correct Answer: C

  Reference: https://thecimastudent.com/2018/02/15/using-pestel-analysis/