PuNnE DOlz®, Cconomws,.ccec, 22 4. Which of the following rewards accrues to the factor of production called ‘capital’? (A) Rent (B) Profit (C) Wage (D) Interest 2, An ‘economy’ is BEST described as a system where (A) suppliers produce all the goods and services needed by the consumers (B) resources are used by manufactur- ers to produce goods and maxi- mize profits (©) all the goods and services used by citizens of a country ate provided by the government (D) resources are used to produce goods and services to meet the needs and wants of society 3. Which ofthe following companies operates. in the primary sector? Company | Deseription/Aetivity (A) | White Lid | Flour processing (8) [Red Ltd [Tomato cultivation (© | Yellow Lid | Private taxi services (D)| Green Lid | Herbal medicine production 4. Astudenthas a daily allowance of $20 with which he ean purchase chicken and chips ora burger, but NOT both. If he purchases the chicken and chips, the opportunity cost of his decision will be (A) the burger he gave up (B) the satisfaction he gets trom burgers (©) the price of the chicken and chips (D) the satisfaction he gets from the chicken and chips 0121601018 ABC Ltd purchases raw-cotton and produces fabric. XYZ Ltd: buys febric from ABC Ltd and makes T-shirts which it markets directly t clothing stores. BOTH firms engage in economic activity in the (A) ‘primary'seetor (B) secondary sector (©) tertiary sector (D) “ quaternary'seotor’**! @ 2 (B) The incoiie from the job (C) “The incoine fax hi pay D) The cost dftavell Item 7 refers to‘tiie following” didgrati Which illustrates the prodhiction possi frontier for an economay in Year | (AA) and ‘Year 2 (BB). Capital : goods ~ From the diagram above it can be deduced i that jpcisnnen nana de emievaac (A) point X was unattainablein Year 2... (B) point Xwas efficient in Year,|,and, Year 2, ‘ (©) there was decreasing opportunity cost in Year 2. seu (D) ‘there. waa. cconomic, growth... ‘between Year 1 and Year 2 GO ON TO THE NEXT PAGE8. Accountry faces the following production 9, An outward shift ina production possibility combinations: ‘curve can be caused by an 2X =production with unemployed resources (A) increase in wages Y= unattainable production combination (B)_~ increase in prices = efficient production combination (©) - increase in imports (D) _ improvement in technology Which of the following production - possibility curves (PPC) correctly illustrates, ‘the information above? lem 10 refers to the following table which shows units of labour and total output, (A) Capital goods Units of Labour] Total Output x 6 372 7 7 455 8 496 pec 9 331 ° Consumer 10 S80 Fs goods ee @) Capit 10. What is the number of labour units that goods produces the. HIGHEST average product x of labour? A 6 z . @) 7 Y © 8 rec (D).. 9 a ‘Consumer goods i (© copla 41. Which of the following does NOT affect goods the efficiency,of labour? v (A) __ Firm’s profitability 7 (B) Worker motivation (©) Level of technology oz (D). Education and-training pec ° Consumer oods 12, Economic choices are made because ©) Cont (Ay pool boos exceed thir wants y (B)_resourees are unlimited and . people's wants are limited (© resources are scarce while people's ‘wants are unlimited (D) people may not always have the money to conduct business oI Consumer gous GO ON TQ\THE NEXT PAGE 01216010 *Lem 17 refers to the’ following table which shows government spending“as'a percentage of Gross Domestic Product for four countries, W, X, Y and Z. 13. In an attempt to increase the efficiency of its staff, management assigns specific tasks to each worker. This is an example of (A) progress (B) productivity (©) speciation Comics | Percentage of GDP (D) © entrepreneurial ability . Ww 41 x 8. 14, Ina commercial bank, wages and salaries yO 30 are NOT paid to z A (A) shareh rank ic (A) shareholders of the b 17. The economic-system of Country: Xzis (B) bank tellers and supervisors (C) investment managers of the bank MOSPiitely sof (D) maintenance workers employed ee eS oe wloyel by (A) mixed ®) planned . (C)__ subsistence 15. One example of a ‘good’ is {D) «free-market. (A) a bottle of soda wate 8 = approved bya bask 18. In Country Ny,the. government provides (©) extra lesson ata schoo! sou housig for ts ctzons Howoves, be y make ata spa : sare I () beauty makeover at a spe other goods are provided by private companies. To which economic system 16. Prices of goods in market economies ‘does Country N MOST likely belong? fiuctuate while prices of goods in planned i economic ted tobe nee, The MOST Mined s likely reason for this difference is that in fo Saannal the market ae ae (D) Free market (A) profits are lower 3 ch ever efficient nv : Q Pivetandscllos determine prices 19: Whichofthe following is NOTan example 5 ee eee: of a factor of production in a commerce! levels bank? (A) | The building (B) The bank’s vault (©) Shareholders of the bank () Special savings accounts for students : GO ON TO THE NE}20. government reduces tax on carrots. This causes the price of carrots to fall by 50%. Demand then rises by 50%. The price clasticity of demand for carrots in this case is (A) 0 (B) 04 © ol ©) 25 Item 21 refers to the following table which shows the price of a product, the quantity demanded (QD) and quantity supplied (QS). Price] QD | QS (8). | Gnits) | (Units) 10 8 20 8 12 16 6 14 14 4 16 12 2 29 8 21. At which of the following prices are there shortages in the market? (A) Sdand $4 (B) Stand $6 (© S6and $8 (@) $8and $10 22, The term ‘money supply’ refers to the (A), .:totalstéekof money inan economy ‘a any moment (B) amount of money traded in the foreign exchange market (©), total asset base of the institutions in the financial sector (@) total amount of gold, silver and other precious metals in reserve oi2i6n10/F 23, “Which of the following features is NOT'@ characteristic of perfect competition? (A) Freedom ofentry.and exit): ss () Selling of homogeneous products (© Many buyers and one seller (©) Knowledge of market conditions 24, Which of the following is usually a consequence of widespread retrenchment ina country? (A) Reduction in crime rate = (B) Bquality in income distributions 9! (©) Increased standard of living (D) A fall in the standard of living 25. _Apure public good ean be described as (A). diminishable Bo (B) _zero-priced —— (©) excludable (©) tivalrous _ tem 26 refers:to the following table. . [Price of [Markee] Marker Potatoes | Demand | Supply (S) | _(000 kg) “| (000 kg) 4 700 100 3 300) 200 2 350 350 16 200 530 20 100 700 ; 26. Whats the equilibrium price? ; A) 8.4 renee ayo . @ $8 “ (©) 812 : oe ©) ‘si6 ~ GO ON TO THE NEXT PAGE27. 29, 30, ‘Globalization’ may be MOST accurately defined as (A). movement of technology and financial markets worldwide (B) integration of financial services, technology and commodity markets worldwide (© intemational trade of goods and services including skilled workers ©) movement of tangible and intangible goods among countries Which of the following is TRUE about financial markets and institutions? (A) They provide insurance protection to speculators. (B) They place emphasis on consumer education. (©) They are free from government interference, (©) They channel funds from those who have saved to those who wish to borrow. Which of the following nancial instruments are issued by the Central Bank on bebalfof the government? (A) Treasury bills (8) Corporate bonds (©) Equity securities (D) Shares on the stock exchange For anything to serve as money, it must (A) ___ be limited in supply (B) have limited demand (©) be backed by law (D) be acceptable by banks as deposit 31. ~ Which of the following items is considered as ‘legal tender”? (A) Gold @) Lumber” ze (©) Cheque" *'" F ©) Aten-dotlar bill (ote 32, A fractional reserve banking S)siem is one where banks hold reserves of Jess than 100% of (A) retained earings “(B) securities (©) > deposits“ ©) * joan 1120 bik 33. Joe Brown sells his asus af ite Market and sayes his igney ‘until eae to buy a tractor.” Which OF the’ follow: functions is money petfotning inthis case? (A) Store of value @B) — Unit of account (©) Medium of exchange (D) . Standard of deferred payment 34. The organization responsible for the ~ regulation and control. of the financial sector is the (A) Treasury @) Central Bank (©) Board of Currency Control (D) Institute of Monetary Affaire... 35. Whichof the fottowing ig commercial bank? (A) Printing currencies (B) Accepting deposits (C) Fixing import quotas (D) Fixing currency exchange rates GO ON TO THE NEXT PAGE36. Which of the following is NOT a financial Ttem 39 refers to the following econéniié institution in an economy? measures. (A) Development bank 1 © Decreasing money supply (8) Commercial bank TI Increasing interest ratés (© Credit union TIL Reducing the bank rate (©) Trade union 39. Which of the above can be used to reduce inflation? 37. The government of Country M has been. - ais = ia accumulating a fiscal deficit for the past (A) “only “ three years without any surpluses. This is ®) | “Tonly’ known as Country M’s (©) “Tand I only” @) , and Ill only (A) foreign surptus : (B) interest rate tough (©) national debt 40, ‘Resources, both human and physical, are () . national budget required to produce goods." > The Ttem38 refers to the following diagram describes which shows the simple circular flow of income for an economy. (A) productivity ~ (B) entrepreneurship- Firms . ©). factors of production (D) factors of productivity y| 41, Which of the following is NOT a service? Households (A) Education (B) Health care, (© * Hairdvesting () — Motorcycle (A) investment aaa (B) factor incomes . (© savings See (D) factors of production . 38. The nominal flow labelled ¥ refers to } GO ON TO THE NEXT PAGE 01216010F42, 43. 44, ‘tem? refers to the following table which 48. The MAIN advantage of quotas as shows the rate of inflation and the average compared to tarifls is that quotas : percentage inoréase in wages over a four- wget ove year period. (A) -areless expensive to administer ®) have the strong support of Year | Rate of Wage economists + 9) Inflation | Increases (%) (C) | areeasierto get passed in Parliament »- (%) (D) remove uncertainty about the 008 7 3 quantity of imports 2007 10, 20 2008 10 46. 2009 15 of the ‘brainy drain’ phenomen country of origin? In which year was the increase in real wages a revinion vous we GREATEST? (A) « Source of remittances (B) Sustained growth. (A) 2006 (©) «Guaranteed development (B) 2007 (D) “wDiscovery of more talent © 2008. so PD). 47. — Which ofthe following isa DISAVANTAGE of international trade? Which of the following is NOT a charac- teristic of Caribbean countries? . (A) “Economies of scale.» (B) Improved international relations (A) High debt burden (©) Increased consumer-choice and (B) High levels of unemployment variety igo 9 uote (©) Low level of capital formation (D) _Stiffcompetition for local industry. (D). Major producers of manufactured z " goods 48, Which of the following bodies tries to get nations to end preferential trade ‘The role of trade unions in the economy is arrangements with other nations. sss to 8 (A) Buropean Union (EU) (A). establish a minimum wage rate (B) World Tratle Organization (WTO) ie (B) increase the wage rate of (©) © International Monetary Fund (IMF) "employees / (D) Caribbean Community(CARICOM) 6) “negotiate wages on behalf of OE yoweate waged bit bebSTT workers 49. Acomputer is purchased from the US ata, (D) create confict between employers and employees price of US$500.. If the exchange rate is given as TT$10~US$1.00, the price of the ‘computer will be (A) TTS3.050 (B) -TTS3 150 (© .TTS5. 000 () — TTS5.630 GO ON TO THE NEXT PAGE50. Which of the following BEST explains the ‘erm “tariff”? (A) _ ‘The amount of subsidies received by local exporters (B) The level of tax that is levied on imports entering a country (©) The amount of goods that can be imported into a country (0) Thecommontax levied by countries on member countries within a region 51. Which of the following will contribute to a surplus on the balance of trade of a country? (A). Value ofimports is greater than the value of exports. (B) Value of exports is greater than the value of imports. (©) Volume of exports is greater than ‘the volume of imports. {D) Volume of imports is greater than the volume of exports. 52. Which of the following is NOT a function ‘of the International Monetary Fund? (A) Overseeing paymenis and exchange rates between countries (B) Promoting the financial stability of countries (©) Assisting countries with balance of payment difficulties (D) Settling trade disputes between ‘countries ara16niae 53. 55. 56. ‘the resttietion’ of i ‘The Central Bank calls for an increase in: the reserve requirements of commercial banks. How will this affect the operations of commercial banks? (A). “Their liquid assets will beredueedes « (B) Their ability:to create. credit:will inerease.s: zi vas (©) Their Ioans tomoney markets, will increases simint 5 (D)’ They will atract less: (ee the public: inational trade 4 through tariffs, embargoes, quotas and exchange controls is referred to as (A) © structital'adjusiiieat (B) globalization” °'"" (C) bilateral agreement ~ @) protection’ Country A is experiencing a balance of payments deficit, Which of the following measures would it normally take to reduce the deficit in the short-term? © fenetl Reduce the volume of exports to other countries. (A) (B) Engage intrade with other low-cost producers of goods. sabi (©) Increase the:importation of goods from other countries.» , (D) Impose restrictions on. goods imported from other countries.:t/oo Which of the following is MOST likely 6. to lead to greater intetnational investment flows to the Caribbean region? (A) Globalization (B) Specialization (©) Trade unionism (D) Currency fluctuation - GOON TO THE NEXT PAGE-10- 57. Which of the following are ways of $9.» One example of an ‘entrepreneur’ is. “calculating national income? . (A) a shop owner 1. Income method (B) _astore worker I Blasticity method (©) abank manager TIL Output method (D) an airline employee IV. Expenditure method (A) Land {only 60. Trade liberalization should result in several (B) Wand Monly benefits to consumers, ;, Which of the (©) 1, Mkand IV only following is NOT a benefit to, consumers? (©) U, Wand IV only, y (A) Prices of goods and services will increase. 58. The term ‘e-commerce’ refers to -(B) - -Prices.of goods,and services will decline. (A) ecotourism (©) Cost of providing goods and (B) export business services.will, he lawer. (©) electronic business (D) There. will be.grealer access to a (D) economies of scale variety of goods and services. END OF TEST If YOU FINISH BEFORE TIME JS CALLED, CHECK YOUR WORK ON THIS TEST. 01216010/F