Cima C04 Exam Question No 4

Question no 4:

In the circular flow model of the economy, the level of national income will always reach equilibrium because:

A. Injections and withdrawals are always equal.
B. Withdrawals are a function of the level of income.
C. Governments will change taxes and expenditure to ensure equilibrium.
D. Expenditure equals income.

Answer: B

Cima C04 Exam Question No 3

Question No 3:

The effects of low real interest rates include all of the following EXCEPT which ONE?

A. Credit-based sales will tend to be high.
B. Nominal costs of borrowing will always be low.
C. Business activity will tend to increase.
D. Investment will be encouraged.

Answer: B

Cima C04 Exam Question No 2

Question No 2:

Supply side policy is designed to?

A. Raise the level of aggregate monetary demand in the economy.
B. Manage the money supply in the economy.
C. Improve the ability of the economy to produce goods and services.
D. Reduce unemployment by limiting the supply of labour.

Answer: C

Cima C04 Exam Question No 1

Questions No 1:

The recession phase of the trade cycle?

A. Is often caused by excessive consumer expenditure.
B. Is normally characterised by accelerating inflation.
C. Is most prolonged when the country has high levels of imports.
D. Is usually caused by falling aggregate monetary demand.

Answer: D