Principles of Business for CSEC®

2nd edition

Chapter 1: The nature of business

The following test paper contains four multiple-choice questions, to help you prepare for
Paper 1, and one essay question, to help you prepare for Paper 2. If you decide to complete the
paper under exam conditions, you should give yourself no longer than 30 minutes to complete all
questions.

1. Which of the following instruments of payment involves a bank acting as the drawer on the
customer’s behalf?
(A) A debit card
(B) A cheque
(C) A bill of exchange
(D) A bank draft
(1 mark)

2. In which of the following Caribbean economies has the government traditionally exerted the
greatest amount of influence over production decisions?
(A) Guyana
(B) Barbados
(C) Jamaica
(D) The Commonwealth of the Bahamas
(1 mark)

3. The code of ethics of a company should set out:

(A) How the company expects to make a profit
(B) The company’s commitment to doing the “right” things
(C) Where the company head office is located
(D) The structure of the board of directors of the company
(1 mark)

4. Which of the following would be considered to be unethical business behaviour?

(A) Undercutting the prices of competitors
(B) Dumping waste and causing pollution
(C) Spending large sums of money on advertising
(D) Offering new products at low prices
(1 mark)

1 Principles of Business for CSEC®, 2nd edition © Oxford University Press 2019
Chapter 1: The nature of business

5. Mr Stone employed the services of a courier to deliver a package to his lawyer in Montego
Bay. When the delivery man came to pick up the package, he told Mr Stone that the
company’s policy does not allow him to collect cash for services. Mr Stone is now unsure
how to pay for the service.
(a) Explain three (3) instruments of exchange other than cash that Mr Stone could use to
pay for the services.


(6 marks)

(b) Discuss two (2) benefits of using any of the instruments identified in question (a) above.


(4 marks)

2 Principles of Business for CSEC®, 2nd edition © Oxford University Press 2019
Chapter 1: The nature of business

(c) Discuss two (2) ways in which EACH of the following stakeholders contributes to the
success of a business:
(i) Customers
(ii) Employees
(iii) Business owners


(6 marks)

(d) Identify two (2) careers in the field of business that are being promoted in your country.


(4 marks)

(24 marks)

3 Principles of Business for CSEC®, 2nd edition © Oxford University Press 2019