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During recessions many governments borrow to give them funds to increase government expenditure on job creation schemes. They then repay the borrowed funds during the boom phase. This is an example of which of the following?

A.

Aggregation

B.

Medium term borrowing

C.

Funding

D.

Open market operations

A good has a price elasticity of supply of 0.8. Which of the following best describes the effects of a rise in demand for this good?

1. More will be spent on the good

2. More of the good will be made and sold

3. Producer incomes will rise

4. Price rises more than proportionately to the rise in quantity produced

A.

1 & 2 only

B.

1 & 3 only

C.

1 & 4 only

D.

1, 2, 3 & 4

Which ONE of the following is NOT an example of a long term financial need?

A.

The financing of business investment

B.

The financing of house purchase through a mortgage

C.

Private saving to finance a pension

D.

The need for working capital in small businesses

If central bankers wished to agree and implement new measures to assure the security of global banks, which ONE of the following bodies would they use?

A.

The IMF

B.

The World Bank

C.

The WTO

D.

The G20

Select the best definition of the corporate governance of a company from the list below.

A.

The structure and functions of the Board of a firm

B.

The systems by which companies are directed and controlled

C.

The composition and duties of the management of a company

D.

The financial and non-financial performance of a company

Identify which of the following features does not distinguish redeemable debt apart from equity:

A.

It has a face value which shows its value at redemption

B.

It will pay a regular set sum of interest

C.

It will have a maturity date when it will mature

D.

It will never be traded on an investment market

All other things remaining equal, which of the following would encourage a speculative short-term capital flow into a country's currency?

A.

A fall in the country's interest rates

B.

An expected depreciation of the country's exchange rate

C.

The abolition by the country of previously-imposed exchange controls which deterred inward investment

D.

Foreign-based multinational companies locating new factories in the country

Which theory of the firm is described by the following statement?

'The decisions of management are the result of a political maneuvering of the various stakeholders connected to the organization.'

A.

Profit maximizing

B.

Satisfying

C.

Behavioral

D.

Managerial

A business could meet a short term financial need by all of the following except one. Which ONE is the exception?

A.

Using its cash reserves

B.

A bank overdraft

C.

Issuing shares

D.

Factoring

If a country were to join a currency union (for example, the European single currency, the Euro), its businesses would experience all of the following except which one?

A.

Reduced transaction costs on overseas transactions.

B.

Exchange rate certainty.

C.

A common monetary policy.

D.

Reduced price transparency.