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BA1 Exam Dumps : Fundamentals of Business Economics

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Fundamentals of Business Economics Questions and Answers

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Question 1

Which TWO of the following policy actions might be available to a government that wishes to reduce a deficit in the balance of payments?

Options:

A.

Devaluate the exchange rate in order to increase exports.

B.

Increase the money supply in order to stimulate domestic consumption.

C.

Appreciate the exchange rate in order to reduce imports.

D.

Reduce the interest rate in order to stimulate investment.

E.

Introduce tariffs on imported goods in order to favour domestic producers.

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Question 2

In a market economy the market mechanism can achieve all the following except one. Which is the exception?

Options:

A.

Signaling changes in consumer tastes

B.

Causing supply to respond to changes in demand

C.

Eliminating excess supply and demand

D.

Ensuring a socially fair distribution of goods and services

Question 3

The stock market fulfils all of the following functions except which one?

Options:

A.

A market for government bonds.

B.

A market for foreign exchange.

C.

A market for company shares.

D.

A market for short term loans.

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