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1. When an economist says that a product has 5. A debenture holder is one who
utiiity, he means that it is
(A) has first claim on any profits and is
(A) desirable paid a fixed rate of dividend
(B) very useful (B) must be paid any amounts cviing in
(C) costlytoobtain the following ye"ar
(D) able ro satisr; a want (C) is paid a fixed rate of interest if the
company makes profits
(D) is entitled to a fixed rate of interest
2. Productivity can be measured by whetherornotthecompany makes
profits
(A) Jn2uts
Outputs
6. A partnership that requires additional capital
(B) Revenue can legally do which of the following~
Outputs
(A) Issue bonds
(C) Outouts (B) Issue debentures
Inputs (C) Borrow money from the bank
(D) Advertise shares to the public
(D) ln2uts
Revenue 7. In the formationofacompany, the Memoran-
dum ofAssociation states notonly the name
ofthe company but also the
..). Subsidised meals for employees would fall
under which ofthe following categories') (A) amount of capital to be issued
(B) way the directors are chosen
(A) Fringe benefits (C) dividends to be paid per share
(B) Duty allowance (D) expenses incu1Ted in the-formation u ;·
(C) Wages and salaries the company
(D) Worker's compensation

8. The PRIMARY role of the personnel

4. The MAIN reasons for the existence of the department of a firm is to
public sector are to
(A) compile a magazine highiighting
I. piovide essentiai services outstanding workers
l I. regulate business activity (B) promote recreational activities for
I II. compete with the private sector ·workers
rv. promote economic growth and ( L;
~,

assist employees in understanding

development industrial relations
(D) hire, recruit, train. and motivate
(P..J I, II and III only workers
(B) i, II and l'i only
(C) L III and I\/ only
ff>\
,~, II, III and IV only

CSEC POB June 2007 P1

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9. Which of the following is LEAST likely to 13. Which one ofthe following is NOT a function
result from growth in an organization? ofmoney?

(A) Greaterproductivity .(A) Measure ofvalue

(B) More division oflabour (B) Medium of exchange
(C) Increased communication (C) Indivisibility
(D) Increased capital investment (D) Storeofvaiue

14. What do workers aim to achieve by coilective

10. Which of the foliowing statements BEST bargaining?
describes an authoritarian leader?
I. Improvement and maintenance of
(A) Makingdecisionswithoutconsultation working conditions
(B) Allowing workers to plan theirown rr. Greater opportunities for promotion
work ill. More capital intensive methods of
(C) Consulting those Iikely to be affected production
by the decision rv Education and training foremployees
(D) Willingness to take suggestions
(A) [,II and !Vonly
(B) [,II and lII only
IL Good leadership is exemplified by which of (C) lII and IV only
the following activities? (D) [and IV only

I. Motivating subordinate staff

15. Which of the following features niust a
l l. Providing more goods at lower cost
simple contract have?
Ill. Giving direction to the organization
IV. Implementing established plans
[_ Offer
I I. Acceptance
(A) I, II and Ill only
Ill. Documentation
(B) !, II and IV only
IV. Consideration
(C) I, Ill and IV only
(D) Il, Ill and IV only
(A) I and fl only
(B) rr and rv only
(C) l, lI and JV only
12. Which o fthe fo!lowingmanagementpractices
(D) I, I!, lII and IV
would contribute to the success o fa business?

!. Pricing atn1axi1num mark-up 16. Which of the following practices are

IL Paying attention to the quality ofgoods characterjstic of a free economy?
or services sold
l fl. Cotnmunicating with employees I. Private ownership of assets
IV. Earning maxim um profits forowners II. Central planning
III. Price fixing ·
(A) i and II only IV Freedom to contract
(B) II and m only
CC) {!and JV only (A) I and III only
(D) JI, III and r'I oniy (B) I and IV only
(Cl !land III o'nly
(0) ll and IV only

'i···
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The policies ofacompany are formulated by 22. An increase in the productiviry oflabourin the
17.
Caribbean region means that
fr1e

shareholders (A) agreaternumberofthepopulacion is

(A)
managers nowempioyed
(B)
directors (B) in ore factors ofproduction are 3.'v"ail-
(C)
ab ie for production
(D) auditors
(C) both population and the value ofout
put are decreasing
A contract may be discharged by (D) the value ofoutput perrrian is greater
18
than before
L performance
!I. lapse of time
offer and acceptance Which of the following practices may be
Ii L
breach MOST appropriate in solvii1g the
lV
unemployment problem in developing
(A) land II only countries where the labour force is large?
(B) !I{ and IV only
l, ll and IV only I. Greaterproduction through increased
(C)
(D) JI, Ill and IV only labour
II. Increased mechanisa1ion
Ill. Increase in vocation3-l training
The MAIN purpose of production is to progran1mes
19.
IV. Increase in salaries
(A) make profits
(3) provide jobs (A) I only
(C) build more factories (B) I and Ill only
(D) satisfy people's wants (C) !I and !II only
(D) !I and IV only

20. The money used fortheday-to-day operations

ofabusiness is called 24. Which otthe following are functions of the
entrepreneur?
(A) fixed capital
(B) nominal capital r. Providing finance needed for
(C) floating capital production
working capital II Co-ordinating the fac1ors of
(D)
production
lll. Undertaking risks by nnticipating
To which industry does a firm involved in food demand
21.
IV. Ensurlngthat
- workers.are. unionised
processing belong?

(A) Extractive (A) I and II only

(B) !'vf?J1ufacturing CB) II and IV oniy
(C) co'nstructive (C) I, II and III only
(D) L III and IV oniy
(D)

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25. '-1Vhich ofthe fOllcwing isthesimplestformof 29. Which ofthe following practices does NOT
production? result from mechanization?

(A) Subsistence (A) Production is increased

(8) Domestic consumption (B) Goods are produced to a standard
(C) Surpiusandexport pattern
(D) Cottage industry (C) People may be needed for manual
work
(D) The speciaiist becomes more skilled
Prirnary production is concerned with the in his work

(A) distribution ofgoods

(8) provision ofgoods to meet essential 30. The standard o fliving ofacountr~y is measured
needs by the
(C) provision ofrawrnate1ials
(D) manufacture of goods (A) index number
(B) per capita income
(C) national product
27. Which of the following LEAST affects the (D) national income
iocation ofan. ext~active industry'!

(A) Proxi111ity io large shopping areas 3 R. The variables ofa marketing mix can easily
(8) Availability of an abundant labour be remembered by referring to the tOur P's
supply which are:
(C) Proximity to sources ofraw mate1ials
(D) The presence of good roads and (A) Product, price, place. promotion
drainage (B) Product, publicity, purchase. price
(C) Product, prornotion, package, prici.::
(D) Product, package, place, pro1TJotion
23. VJhich ofthe foliovving are disadvantages of
sn1all firms?
32. ALL persons can be called consun1ers because
!. Ernpioyees feel a sense of belonging they
Il. They have unlimited liabilil"f
rIL ft is difficulttoarrange financing (A) use goods
IV. They have personal ties \Nith (B) have wants
customers (C) sell goods
(D) buy goods
(A) I 3.nd Ii only
(B) I and m on!y
IC) I! and !II only 33. Businessmen usually employ ·1oss leaders' to
(J) iII and TV only
(A) give a free gift with each cash
purchase
(B) reclaim losses made in the saie of
goc"'Cis
(C) attract more customers by sei ling a
few items at a loss
(D) promote new products 1n the
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34. Which of the fol1ov1ing must be taken into 38. Which ofthefollmving documents would give
account when packaging goods for retail? title to goods?

[. Cost L
r Bill ofsale
I I. Brand IL Bill ofmaterials
!II. Protection III. Bill ofiading
!V. Attractiveness IV. Bill ofsight

(A) I and Ill only (A) I only

(B) I and IV only (B) Ill only
(C) III and !V only (C) II and IV only
(D) !, ll, Ill and IV (D) IllandlVonly

35. Which of the following contracts must be 39. Whichofthefollowing instrumentsofpayment

rriade by deed? would a firm use to effect the speediest
0
transferoffunds from one country to another"
(A) Billsofexchange
(B) Insurance contracts (A) Cheque
(C) Transferof shares (B) Bank draft
(D) Conveyances ofland (C) Money order
(D) Telegraphic transfer

36. Which of the following is NOT a fonction of

the retailer? 40. A post-dated cheque is one which

(/\) Transporting goods to suitable stor- (A) vvas written no longer than six
age facilities months ago
(B) Providing a local supply ofgoods (B) is dated to agree with the date of
(C) Preparing goods for resale the document requesting payment
(D) Selling in small quantities (C) is dated by the bank dates on the
day the cheque is presented for
payment
37. A' purchase order' is a (D) is dated for payment at a future
date
(A) statement offering to buy goods
(B) notification ofgoods received
(C) statement of debts outstanding 41. The bank service which allows a customer to
(D) request for additional goods make payments by cheques is the

(A) current account

(B) savings account
(C) deposit account
(0) capital account

, .
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42_ The monthly payments collected by an 47. Which ofthe following measures are used by
insurance company on behalf of its policy government to redistribute in~.ome?
holders are known as
(A) Custom duties and levies
(A) deposits (B) Consumption tax and tariffs
(B) premiums (C) PA YE and National Insurance
(C) instalments (D) Excise duties and Value added tax
(DJ endowments

48. Which form oftaxation is imposed on goods

43. Which of the following forms of payment is produced in a country?
legal tender?
(A) Excise duty
(A) Cheque (B) Preference duty
(B) Banknote (C) Excise drawback
(C) 0
Money order (D) Customs drawback
(D) Postal order

49. Which ofthe following are MAJOR functions

44. Collateral is MOST needed when of the Central Bank?

(A) taking out an insurance policy I. Acting as the goverr1rnent' s bank

(B) ordering goods from a foreign manu- II. Keeping deposits ofall commercial
facturer banks
(C) borrowing from a financial institution lll. Giving loans to private individuals
(D) buying stocks and shares and companies
IV. Helpingtoregulatethe money supply
of a country
45. Which ofthe following is legislation designed
to protect the consumer? (A) I, Il and III only
(B) I, fl and IV only
(A) Negative List (C) I, lII and IV only
(B) Hire Purchase Act (D) II, fII and JV only
(C) Customs Ordinance
(D) Banking Act
50. Market equilibrium exists when

46. Export licences are issued mainly to
(A) encourage the local businessmen to
produce more goods for export
(B) indicate to the importing country that
'· the goods are ofahigh standard
(C) enable the government to control the
flow ofgoods being exported
(D) indicate to the importing country the
price at which the goods are to be
sold
•'
(A) buyers pay reasonable prices for
goods
(B) sellers are satisfied with the price
paid fortheir goods
(C) attheruiingmarketprice, buyers do
not want to add to the stock of
goods they already have
(D) at current prices, the amount of
goods buyers v,rish to buy equals
the amount sellers want to se11
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51. Whichofthe following features are associated

with perfect com petition? Item 55 refers to the fo 11 owing tab le.
Real Exports Rii:ai lrn ports
y<)•a•
........
L Many buyers and sellers (Sm) fSm)
II. Fewbuyersandseilers -----i
III. Freed om ofentry into the market i991 72 7(J
''
IV. Barriers to entry into the market 1992 83 79
1993 80 86
(AJ [and lII only 1994 95 88
(BJ [andiVonly 55. In what year was there an unfavourable
(C) ll and !ll only balance oftrade 9
(D) II and IV only
(A) 1991
(B) 1992
52. Which ofi:he following characteiistics BEST (C) 1993
describe a perfectly competitive market? (D) 1994

(A} Few sellers and many buyers

(BJ Difficultentry to new markets 56. ff a Caribbean country should devalue its
(C) Production ofalmost identical goods currency, it is MOST likely that
(D) Imperfect consumer knowledge of
prices (AJ its imports would becon1e cheaper
and its exports would become more
53. expensive
Which ofthe fo Ilowing actions ofgovernment (8) its impot1s ·wouid becoine more
is MOST likely to lead to an improvement in
expensive and its exports ·..vou ld
the standard ofliving?
become cheaper
(C) both its i1nports and expotl:s vvould
(A) Abolishing taxes on low incomes become more expensive
(8) Giving tax incentives to business (D) both its imports andexpons would
(CJ Increasing the income tax rate become cheaper
(DJ Printing more money

57. The MAJOR aims ofrhe Eurnpean Union

54. Which ofthe following is NOT a benefit of (E.U .) are free moven1ent of
international trade?
L Goods
(A) Agreatervarietyofgoods is obtained [J. Capital
from overseas. I I 1. People
( 8) Political linksaredevelopedwithother IV. Services
countries.
IC) Tm port restrictions can be imposed (A) I and II only
on foreign it~ms. (B) rand m only
(D) ·. Producers are able to increase their (C) I, II and III only
market size. (D) I. II, III and rv

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58. Which ONE ofthe following methods may 60. Which ofthe following car\ be classified as
government use to reduce unempioyment? benefits ofnationalisation? I

(A) increase interest rates on borrowing I. Profits will remain in the country
(B) Increase income tax II. Essential industries will be state-
(C) Deflation ofthe economy owned
(D) Employment levy on fin:ns Ill. Employment will be provided for
citizens
IV. The enterprise will have joint
59. Investment can be defined as ownership

(A) a stock of goods existing at a given (A) I, II and Ill only

time (B) I, II and IV only
(B) an addition to the capital stock of a (C) 1, Ill and IV only
country (D) II, Ill and IV only
(C) a stock of raw materials which
have fallen
(D) 'a stock of goods owned by the
governn1ent

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