Question 1

A typical supply curve of a good shows:

Options :

A : The quantities of the good firms actually sell at different possible prices

B : The quantities of the good firms are prepared to supply at different possible prices

C : Different possible equilibrium prices

D : Quantity supplied varying inversely with price

Answer: B

Question 2

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 3

PlusTech is a video games company with staff based in Los Angeles, California, London, UK, and Berlin, Germany. PlusTech currently employs 20 people to develop and market its games, while the distribution is

handled by RPGInternational, a separate company.

Why should PlusTech adopt multiple business structures in order to succeed in the video games industry?

Select ALL that apply.

Options :

A : The videogames industry is international, therefore the company should adopt the model of a virtual organisation

B : The small number of staff the company has means it has to form a strategic alliance with RPGInternational in order to distribute its games

C : The company needs to be technologically advanced so as to remain a market leader in the industry

D : The company has no direction, therefore does not stick to one particular business model

E : The company does not have the revenue to increase its staff numbers

F : The company is at risk of not succeeding if it does not adopt various business models

Answer: A,B

Question 4

Every year a household allows its bank account to become overdrawn for 3 months to pay for its annual holiday. Which one of the following statements correctly describes this?

Options :

A : A short term lack of synchronization between payments and receipts

B : Long term borrowing

C : Medium term borrowing

D : Maturity transformation

Answer: C

Question 5

Based on the past twenty months, an event decorating company develops a trend equation for forecasting sales revenue (y) where y = 4.38 + 1.32x.

If month 21 has a seasonal factor of times 1.07, then what is the forecast for the month, using a multiplicative model? Give your answer to two decima places.

Options :

A : 34.34

B : 54.54

C : 44.44

D : 64.64

Answer: A

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