Question 1

Which of the following describes a 'spot rate' in foreign currency dealing?

Options :

A : It is a short term rate that may change in the immediate future

B : It is the price for a currency that is to be delivered immediately

C : It is the exchange rate minus any commissions or transactions charges

D : It is the exchange rate minus the inflation rate

Answer: B

Question 2

All the following statements about small firms are correct except one. Which statement is incorrect?

Options :

A : Small firms do not generally raise finance on the capital market

B : Banks may refuse to lend to small firms because of the risk involved

C : Small firms are common in industries which display increasing returns to scale

D : Small firms are common in industries where there are niche markets

Answer: D

Question 3

Which of the following statements about the sources of stakeholder conflict is true?

Options :

A : Different stakeholders have different objectives

B : The various stakeholders have differing degrees of influence

C : Stakeholder conflict only occurs in not-for -profit organizations

D : Stakeholders with high interest sometimes have limited influence

Answer: A

Question 4

A market for a normal good is in equilibrium. What will happen in this market if there was an increase in consumer incomes?

Options :

A : The demand curve would shift to the right, the equilibrium price would rise and there would be an increase in supply

B : The demand curve would shift to the left, the equilibrium price would fall and there would be a contraction in supply

C : The demand curve would shift to the right, the equilibrium price would rise and there would be an extension in supply

D : The demand curve would shift to the left, the price would fall and there would be a decrease in supply

Answer: C

Question 5

ToyTown, a soft toy manufacturer, produces what it claims to be the cheapest teddy bears on the market. The graph shows the current price of a ToyTown teddy bear and its relationship to the demand for ToyTown teddy

bears.

If the price of ToyTown teddy bears were to increase, what would happen to the demand?

Options :

A : Demand would fall as consumers would look for alternative teddy bears to buy

B : Demand would increase because the teddy bears would be seen as more prestigious by consumers due to their higher prices

C : Demand would fall as the relationship between price and demand as shown in the graph is inelastic

D : Demand would increase as the relationship between price and demand as shown in the graph is elastic

Answer: A