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Which of the following is NOT a function of 4. Ip a public limited company, the losses are
money? borne by the

(A) Indivisibility (A) staff

(BJ Store ofvalue (B) directors
(C) Measure ofvalue (C) community
(D) Mediumofexchange (D) shareholders

2. Which of the following are functions of a 5. Which of the following types of business
business unit? environments is MOST typical of the
Commonwealth Caribbean?
I. Creation ofjobs
II. Education of workers (A) Corporate state
III. Maximization of sales (B) Mixed economy
IV. Production of goods and services (C) Centrally planned
(D) Perfectly competitive
(A) I, II and III only
(B) I, II and IV only
(C) I, ·m and IV only 6. Which ofthe following responsibilities MUST
(D) II, III and IV only be assumed by the management of a
\ company?

3. Which of the following characteristics of the I. Producing goods of a marketable

sole trader form of business is NOT quality
advantageous to the owner? IT. Maximizing efficiency and creating
surpluses
(A) Unlimited liability III. Determining dividends to be paid to
(B) Low operational costs shareholders
( C) Ownership of all profits IV. Maintaining good communication and
(D) Rapport with customers hnman relations with staff

(A) II only
(B) II and III only
(CJ II, III and IV only
(D) I, II, III and IV

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Item 7 refers to the diagram below which shows a section ofa typical vertical organizational chart
for a manufacturing company.

[joARD OF DIRECTORsl
I_ MANAGING DIRECTO~

GENERAL MANAGER

[ PRODU<;:TION MANAGER ] MARKETING MANAGER [QnEF ACCOUNTANT

7. The relationship between the highest level of

management down to the various departments
is known as the

(A) line
(B) rank
(C) sfuff
(D) flow

8. Setting objectives and the procedures for 10. The PRIMARY role of the Human Resources
achieving goals are referred to as Department of a firm is to

(A) motivating (A) hire_,, recruit, train and rnotivatc

(B) controlling employees
(C) organising (B) promote recreational activities for
(D) planning employees
(C) compile magazines highlighting
outstanding employees
9. A MAJOR role of a trade union is to (D) assist employees in understanding
encourage industrial relations

(A) staffto become members oftheunion

(B) staff to strike whenever they have 11. Which of the following organizations is
problems at work LEAST likely to use a Manangement
(C) advancement of the welfare of its Information System?
members
(Dj management to pay higher salaries (A) A department store
and give Ianger vacations to staff (B) The National Bank
(C) A shoe-shine shop
(D) A beauty supplies outlet

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12. Which of the following are functions of the 16. An overview of a business plan is contained
entrepreneur? in the

I. Providing finance needed for (A) feasibility plan

production (B) marketing plan
II. Co-ordinating the factors of (C) key note summary
production (D) executive summary
III. Undertaking risks by anticipating
demand
IV. Ensuring that workers join a union 17. Which of the following factors prevents an
agreement from being considered a valid
(A) I and II only contract?
(B) II and IV only
(C) I, II and.III only (A) Consideration
(D) I, Ill and IV only (B) Legal purpose
(C) Misrepresentation
(D) Offer and acceptance
13. Cash usell to secure a loan at the bank is
referred to as
18. The monthly payments collected by an
(A) fixed deposits insurance company on behalf of its policy
(B) current assets \ ho Iders are known as
(C) fixed assets
(D) collateral (A) deposits
(B) premiums
( C) instahnents
14. Which ofthe following situations illustrates (D) endowments
entrepreneurship?
19. Which of the following desclibes an essential
(A) A secretary who uses a computer feature of a valid contract?
applicationtodoherjob
(B) Afarmerwhousestheforktoplough (A) The offer has been communicated to
his land the offoree.
(C) An assistant who developed a (B) The offer is made in writing by the
software application for his job offeror.
(D) An employee who goes to work on cc) A counter offer has been made by
time and does his work well the offeree to the offeror.
(D) The acceptance is made in writing to
theofferor
15. An entrepreneur may reduce his risk ofloss
by
20. A post-dated cheque is one which
(A) planning ahead
(B) securing bank loans (A) is dated for payment at a future date
(C) cleaning offices regularly (B) 'was wlittenno longerthan six months
(D) purchasing additional fixed assets ago
(C) is dated to agree with the date ofthe
document requesting payment
(D), isdatedbythebank'sdateontheday
the cheque is presented for payment
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21. ·The money used for the day-to-day 26. Which of the following factors does NOT
operations of a business is called affect the supply of labour?

(A) fixed capital (A) Migration

(B) nominal capital (B) Birthrate
(C) floating capital (C) Population census
(D) working capital (D) School-leaving age

22. Which of the following is LEAST likely to 27. Which of the following is a product of the
result from growth in an organization? manufacturing industry?

(A) Greaterprodnctivity (A) Gold

(B) More division oflabour (B) A car
(C) Increased communication (C) Lumber
(DJ Increased capital investment (D) A house

23. WhatistheMOSTlikelyeffectonadeveloping 28. Which ofthe following can be described as a

economy when professional and skilled labour marketing activity?
migrate to developed countries?
(A) Issuing bulletins on staffmatters
(A) Unskil!edlabourerswillworkharde~ (B) Distributing commodities to outlets
(B) Unskilled labourers will demand (C) Publicising advertisements for new
higher wages. staff
(C) Production levels of goods and (D) Ensuring that workers are given
services will decrease. fringe benefits
(D) The demand for skilled labour and
professional services will
decrease. 29. The PRIMARY function ofadvertising is to

(A) communicate information

24. In the Caribbean, many people are hired for (B) promote brand loyalty
sugarcane farming and veiy little equipment (C) ensure wider distribution ofgoods
isused. TitisindustrycanBESTbedescribed (D) promote public relations
as

(A) labour intensive 30. Which ofthe following market situations is

(B) capital intensive typically found where there is alargenumber
(C) having low capital input ofproducers and consumers 0
(DJ having high capital input
(A) Imperfect market
(B) Perfect market
25. Which ofthe following factors ofproduction (C) Monopoly
ea!11s interest? (D) Oligopoly

(A) Land
(B) Capital
(C) Labour
(D) Enterprise

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31. Which ofthe following characteristics BEST 36. ~f 01n m vests his savings by buying .shares in a
describes a perfectly competitive market? company. From ibis investment, Tom expects
to receive
(A) Fewsellersandmanybuyers
(B) Difficult entry to new markets (A) profits
(C) Production ofalmost identical goods (B) interest
(D) Imperfect consumer knowledge of (C) revenue
prices (D) dividends

32. The price ofan item is usually high when the 37. Which of the following are responsibilities of
numberof people wanting to buy it is commercial banks?

(A) large and the quantity forsale is small I. Controlling the supply ofmoney
(B) large and the quantity for sale is large II. Offering loans to small businesses
(C) few and.the quantity for sale is small III. Accepting deposits from customers
(D) few and the quantity for sale is large IV. Acting as banlcers to the government

(A) I and II only

33. Which ofthe following is NOT a function of (B) II and III only
the retailer? (C) I, II and III only
(D) II, III and IV only
(A) Selling in small quantities
(B) Preparing goods for resale
(C) Providing a local supply ofgoods ~8. One of the MAJOR functions of a Central
(D) Transporting goods to suitable storage Bank is to
facilities
(A) issue notes and coins
(B) accept. deposit accounts
34. Whichoft.hefollowingMUSTbetakeninto (C) issue stocks and shares
account when packaging goods for retail? (D) make loans and advances

I. Cost
IL Brand 39. Investment can be defined as
III. Protection
IV. Attractiveness (A) the stock of goods in a country
(B) .additions to the capital stock of a
(A) I and III only country
(B) II a.-id IVoniy .-{C) the amount of money avaiiable at a
(C) III and IV only given time
(D) I, II, III and IV (D) the amount ofcapital owned by the
government

35. Which ofthe following can have their shares

ti:aded on the stock exchange?

(A) co:operative societles

(B) Private companies
(C) Public companies
(D) Partnerships

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40. Which ofthe following institutions are NOT 42. The term 'subsidies' refers to
regulated by Central Banks?
. (A) grants given by government
(A) Credit unions (B) taxes withheld by g,ovemment
(B) Stock exchanges (C) loans given to small businesses
(C) Commercial banks (D) profits realized from investment
(D) Joint stock companies

43. Which ofthe foll owing measures are used by

41. Which of the foll owing graphs shows government to redistribute income 7
regressive taxation?
(A) Custom duties and levies
(A) (B) Consumption tax and tariffs
(CJ FA Y--G an<l11alionain1::,u1an~e
(D) Excise duties and value added tax
O/o.
of
Tax
44. Tax paid on wages and salaries is referred to
as

0 (A) income tax

(B) corporation tax
(B) (C) value added tax
(D) consumption tax
\
%
of Which ofthe following is NOT regarded as a
Taxf--~--~~~~~~- 45.
role oftaxation?

(A) Raising revenue for government

0 Income (B) Influencing the distribution of inc~mes
and wealth
(C) Influencing total expenditure on
(C)
goods aod services
(D) Influencing the investment decisions
% of publicly owned enterprises
of
Tax
~-.

46. Which of the following forms of taxation can

be classified as 'direct'?
Income
(A) Excise duty
(B) Income tax
(D)
(C) Customs duty
(D) Purchase tax
. % ""

~
of ""
Tax

0 Income

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47. \Vhich ofthe following institutions is involved 51. Which of the following is "10T a benefit of
in protecting the consumer? international trade?

(A) Bureau of Standards (A) Political links are developc,"d with other
(B) Forestry Department countries.
(C) IntemationalMonetaryFund(IMF) (B) Producers are able to increase their
(D) Natural Resources Conservation market size.
Authority (NRCA) (C) Agreatervarietyofgoodsisobtained
from overseas.
(D) Import restrictions can be imposed
48. A government can correct an adverse on foreign items.
foreign exchange problem by

(A) implementing price floors 52. Export licences are issued MAINLY to
( B) increasing customs duties
(C) reducing severance payments (A) enable the government to control the
(D) improving the rate ofinflation flow ofgoods being exported
(BJ encourage local businesses to
produce more goods for export
49. Which ofthe following are UK.ELY to affect (C) indicatetotheimportingcountrythat
the standard ofliving in a country? the goods are of a high standard
(DJ indicate to the importing country the
I. A high crime rate price at which the goods are to be
II. A low literacy rate sold
\
III. Widespread pollution
IV. Poor advertisements
53. A country has a favourable balance oftrade
(A) II and III only when
(B) II and IV only
(C) I, II and III only (AJ it buys more than it sells
(D) II, III and IV only (BJ itsellsmorethanitbuys
(CJ imported goods are cheaper
(DJ there are no restrictions to trade
50. Which ofthe following practices would NOT
contribute to the economic development and
growth of a country? 54. The buying and selling ofgoods and services
among countries is called
(A) Increased importation ofconsumer
goods (A) balance of trade
(B) Increaseduseofthecountry's natural (BJ international trade
resources (C) balance of payment
(C) Provision of more infrastmcture (D) international marketing
within the country
(D) Provision of loans and technical
assistance for establishing local
businesses

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55. Which of these methods can a government 59. Which of the following are MAJOR
use to reduce unemployment? arguments in favour of free trade?

(A) Increases in income tax I. Protectionism

(B) Deflation ofthe economy II. Trade specialization
(C) Employment levyonfums III. Increase in world output
(D) Increased interest rates on borrowing IV Comparative cost advantage

(A) I and IV only

56. To correct an adverse balance of payments (B) II and III only
position, a government may (C) I, II and. III only
(D) II, III and IV only
(A) reduce credit
(B) increase exports
(C) reduce income tax 60. Which of the followmg countries are NOT
(D) increase the money supply members of the Organization of Eastern
Caribbean States?

57. Whicnofthefollowingtradingagreementsis (A) Anguilla, Grenada

Barbados promoting when it sells furniture to (B) Antigua and Barbuda
Jamaica.? (C) Barbados} Jamaica
(D) Dominica, St. Lucia
(A) CARI COM
(B) NAFTA
\
(C) GAIT
(D) OECS

58. Which of the following practices may be

MOST appropriate in solving the
unemployment problem in a developing
country with a large labour force?

I. Increase in salaries
II. Increased mechanisation
III. Increase in vocational training
programmes
IV. Greater production through ...
increased labour

(A) Ionly
(B) IandIIonly
(C) II and III only
(D) IIIand IV only

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

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