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BA1 Exam Dumps - CIMA Certificate Questions and Answers

Question # 34

Which of the following is an invisible import for a country?

Options:

A.

Expenditure in its shops by foreign diplomats based in the country

B.

The country's contribution to foreign aid

C.

A foreign company signing a contract guaranteeing to invest in a new factory in the country

D.

Repayment of an IMF loan by the country's government

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Question # 35

Which ONE of the following would be expected to reduce the net present value of a proposed investment project?

A rise in

Options:

A.

the expected cash flows from the project

B.

the scrap value of the capital at the end of the project's life

C.

interest rates

D.

the net present value of alternative projects

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Question # 36

Which of the following is not taken into account by the discount factor applied to future earnings when calculating shareholder value?

Options:

A.

Shareholders rate of time preference for money

B.

The amount of earnings that will be lost as taxation

C.

The amount of risk the investment is subject to

D.

The rate of inflation

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Question # 37

All of the following are true under a system of floating (flexible) exchange rates except which one?

Options:

A.

Balance of payments deficits and surpluses are automatically corrected.

B.

There is no danger of long term undervaluation or overvaluation of the currency.

C.

The prices of imports and exports change as the supply and demand for the currency change.

D.

Balance of payments adjustment occurs without any effect on the domestic economy.

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Question # 38

Which one of the following would lead to a fall (depreciation) in the exchange rate for a country's currency?

Options:

A.

A fall in interest rates in that country

B.

An inflation rate below that of the country's trading partners

C.

A fall in that country's imports

D.

A fall in the export of capital from that country

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Question # 39

MakeHay are struggling to co-ordinate their different departments so that deadlines are hit. Two managers suggest different ideas to solve this issue.

Manager Smith suggests MakeHay open a new office who is responsible for co-ordinating the different departments, and would also have their own production targets.

Manager Jones suggests that opening another office would increase production, and so ensure deadlines are hit.

Why is neither manager correct?

Options:

A.

Opening a new office could lead to delays in messages being communicated between different departments

B.

Opening a new office is not viable for the company at its current size

C.

Opening a new office would be too expensive for the company at present

D.

Opening a new office would guarantee targets are met between departments

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Question # 40

Whenever demand for a good is price elastic, an increase in price will

Options:

A.

Increase monopoly power

B.

Increase consumer expenditure on the good

C.

Increase consumer expenditure on a good in joint demand

D.

Decrease total consumer expenditure on the good

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Question # 41

Which ONE of the following increases the price of the shares in ABC plc?

Options:

A.

A fall in interest rates

B.

Falling demand for some of ABC's key products

C.

Constant ROCE at ABC plc

D.

News of better economic outlook in ABC's home country

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Question # 42

On an aggregate demand and aggregate supply diagram, cost-push inflation is shown by

Options:

A.

A leftward shift of the short-run aggregate supply curve

B.

A rightward shift of the aggregate demand curve

C.

A rightward shift of the long-run aggregate supply curve

D.

A leftward shift of the aggregate demand curve

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Question # 43

All of the following are typical features of the downswing phase of the trade cycle except one. Which ONE is the exception?

Options:

A.

A rise in the level of unemployment

B.

A fall in the rate of inflation

C.

The government budget balance moving towards a deficit

D.

The balance of payments current account moving towards a deficit

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Exam Code: BA1
Exam Name: Fundamentals of Business Economics
Last Update: Mar 31, 2025
Questions: 468
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