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Fundamentals of Business Economics Questions and Answers

Question 21

Which THREE of the following businesses are more likely to fare belter during a recession?

Options:

A construction company specialising in road infrastructure

A producer of rice, a staple good

A producer of automobiles, a durable good.

A producer of security equipment, a counter-cyclical good

A retailer specialising in fashion, a cyclical good.

A construction company specialising in private residential accommodation

Question 22

A clothes retailer has estimated a linear trend equation including trend, seasonal and cyclical components to forecast its sales for the next four quarters Which of the following factors would generate actual sales figures that are likely to differ markedly from the forecast?

Options:

A drop in sales due to emergency roadwork blocking access to the store

A drop in sales due to the ongoing economic recession.

An increase in sales due to the increasing popularity of their brand.

An increase in sales before a major religious festival

Question 23

'The £ has risen against other currencies since August, defying forecasters who thought that the UK's widening trade deficit must cause the £'s exchange rate to fall.'

From the above information, it can be concluded that, since August

Options:

UK exports have become less price competitive

The UK inflation rate has increased

UK interest rates must have increased

The strengthening pound has improved the UK balance of payments on current account

Question 24

The graph shows house prices in Lingford, a large urban town in a prosperous region.

Which of the following would be the equilibrium price for houses in Lingford?

Options:

£390,000

£400,000

£410,000

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Fundamentals of Business Economics Questions and Answers

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