Cima C04 Exam Question No 13

Question No 13:

If a country were to join a free trade area, its business sector would gain because:

A. It could get tariff-free raw materials from countries inside the free trade area.
B. There would be exchange rate stability between the member countries.
C. Prices of competitors from countries not in the free trade area would rise.
D. There would be fewer barriers to establishing subsidiaries in other countries in the free trade area.

Answer: A

Cima C04 Exam Question No 12

Question No 12:

An expansionary fiscal policy would be most likely to reduce unemployment if the country had:

A. A high marginal propensity to import
B. A low marginal propensity to save.
C. A high marginal tax rate.
D. A low marginal propensity to consume.

Answer: A

Cima C04 Exam Question No 11

Question No 11:

All of the following are disadvantages of inflation EXCEPT which ONE?

A. It redistributes wealth from debtors to creditors.
B. It reduces international competitiveness.
C. Market price signals are distorted.
D. Fixed income earners experience a fall in real income.

Answer: A

Cima C04 Exam Question No 10

Question No 10:

The balance of payments accounts are defined as:

A. The difference between the government’s receipts and its expenditure over the period of a year.
B. The difference between the exports of goods and services and imports of goods and services over the period of a year.
C. The surplus or deficit on a country’s international trade over a given period.
D. A statement of the economic transactions between residents of a country and the rest of the world over a given period.

Answer: D