Question 1

Central banks inspect and sometimes set minimum limits on the reserves held by commercial banks. Which ONE of the following statements is NOT a reason that central banks seek to influence the reserves of commercial banks?

Options :

A : To influence commercial banks' ability to create credit

B : To avoid the commercial banks running out of liquidity

C : To regulate the profits of commercial banks

D : To prevent the collapse of the banking system

Answer: C

Question 2

In a recession which ONE of the following would be likely to experience the largest fall in demand for its products?

Options :

A : A manufacturer of industrial machine tools

B : A chain of supermarket grocery stores

C : A motor insurance company

D : A toothpaste manufacturer

Answer: A

Question 3

If a central bank wished to increase the supply of money and credit in the economy it would:

Options :

A : sell bonds and raise interest rates

B : buy bonds and reduce interest rates

C : sell bonds and reduce interest rates

D : buy bonds and raise interest rates

Answer: B

Question 4

A regressive tax is defined as one where:

Options :

A : The amount of tax paid by a taxpayer falls as income rises

B : The rate of tax is different for different income levels

C : The proportion of income paid in tax rises as income falls

D : The tax is levied on expenditure not income

Answer: C

Question 5

PetsPlus Pic. has outsourced its marketing operations to the recently established marketing firm MarketMe. MarketMe has devised and distributed an online survey on behalf of PetsPlus Pic, asking customers to

evaluate the products they purchase from the company.

An example of a question from the survey is as follows:

'What do you think of PetsPlus's decision to outsource its marketing operations to a marketing firm?

Which of the following best describes why this question will not yield good information for PetsPlus?

Options :

A : Relevance

B : Accuracy

C : Reliability

D : Cost efficiency

Answer: A

Free CIMAPRA17-BA1-1-ENG Mock Exam – Practice Online Confidently

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