Question No. 1

Which of the following headings would appear in the current account of a country's alance of payments? (2 marks)

ATransactions in goods and services

BTransactions in external assets and liabilities

CTransactions in large sums of money

DTransactions in stocks and shares

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Correct Answer: A

Question No. 2

Which of the following best describes the pricing policy known as 'penetration pricing'?

AA price in line with that being charged by competitors

BA high price aimed at a quick recovery of costs

CA low price set to gain a large share of the market

DA temporary price reduction to increase sales or 'ward off ' competition.

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Correct Answer: B

Question No. 3

Which of the following provides the best definition of a 'mixed economy'?

AAn economy in which resource allocation and production levels are made by a centralized body

BAn economy in which firms attempt to make the largest profit and individuals try to get the best deals

CAn economy that earns a mix of revenue from both domestic and international trade

DAn economy in which there is some state intervention in the way of economic policy to manage the economy.

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Correct Answer: A

Question No. 4

A 'balance of payments' is the record of which of the following during a year? (2 marks)

AA country's monetary import and export transactions

BExchange rate movements

CAll payments made by a government department

DAll revenue from taxes received by a government

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Correct Answer: A

Question No. 5

Which of the following best describes the economic term 'monetary policy'?

AThe government controlling economic activity by regulating the level of taxation

BThe government controlling economic activity by reducing the budget deficit

CThe government controlling economic activity by influencing the rate of interest

DThe government controlling economic activity by reducing the national debt.

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Correct Answer: A

Free CIPS A6 Exam Actual Questions