MARABELLA NORTH SECONDARY SCHOOL

PRINCIPLES OF BUSINESS
TERM ONE
SEPTEMBER 2021- DECEMBER 2021

PAPER 01
Class: 402 & 404

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This paper consists of twenty items.

2. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each
item you are about to answer and decide which choice is best.

3. Shade or highlight your answers on the answer booklet provided.

 Multiple Choice

1) A system involving the exchange of goods depending on the ‘double coincidence of wants’ is
known as
(A) barter
(B) money
(C) specialization
(D) equal exchange

2) Which of the following is NOT a function of money?

(A) Indivisibility
(B) Store of value
(C) Measure of value
(D) Medium of exchange

3) In which department of a manufacturing business would an engineer MOST likely be

found?
(A) Production
(B) Personnel
(C) Marketing
(D) Financial

4) Which of the following types of business environments is MOST typical of the

Commonwealth Caribbean?
(A) Corporate state
(B) Mixed economy
(C) Centrally planned
(D) Perfectly competitive

5) A MAJOR function of the public sector is to

(A) Make a profit
(B) Serve the entire population
(C) Serve the interests of the shareholder
(D) Inspire competition among businesses
6) Private enterprise is run MAINLY to
(A) Create profits
(B) Reduce inflation
(C) Distribute goods and services
(D) Provide jobs for more people

7) Selecting the objectives and the procedures for achieving goals is referred to as
(A) Planning
(B) Organizing
(C) Controlling
(D) Motivating

8) The legal responsibility of a sole proprietor to pay any money owed by the business is
described as
(A) Risk
(B) Insurance
(C) limited liability
(D) unlimited liability

9) The primary role of the Human Resource Department of a firm is to

(A) discipline employees who breach regulations
(B) recruit, train and motivate workers
(C) seek training opportunities for employees
(D) represent employees in industrial relations

10) Which of the following characteristics are exemplary of a good leader?

I. Inspiring workers
II. Delegating responsibilities
III. Making intelligent decisions

(A) I and II only

(B) I and III only
(C) II and III only
(D) I, II and III
11) An authoritarian leader is one who
(A) makes decisions without consultation
(B) allows workers to plan their own work
(C) consults with those likely to be affected by the decision
(D) takes suggestions from employees

12) A hotel gives vouchers for meals to its employees. This form of incentive is BEST described as a
(A) reward
(B) bonus
(C) fringe benefit
(D) motivation scheme

13) Mr Lloyd, manager of LM Ltd holds regular staff meetings to listen to ideas from employees
before making decisions that would affect the future of the company. What leadership style does
Mr Lloyd employ?
(A) Autocratic
(B) Democratic
(C) Charismatic
(D) Laissez faire

14) In a public limited company, the losses are borne by the

(A) staff
(B) directors
(C) community
(D) shareholders

15) In which of the following economic systems does the government make all decisions?
(A) Mixed
(B) Capitalist
(C) Command
(D) Subsistence

16) Which of the following activities carried out in a firm will NOT be under the supervision
of the marketing manager?
(A) Packaging
(B) Purchasing
(C) Advertising
(D) Distributing
17) Which of the following is NOT an example of an unethical business practice?
(A) Money laundering
(B) Nonpayment of taxes
(C) Misleading advertisements
(D) Retrenching of workers

18) The term 'division of labour 'can be defined as

(A) Organization of tasks in production

(B) Assembling of goods for distribution
(C) Separation of tasks to complete a job
(D) Employment of different types of workers

19) Which of the following are benefits of written communication?

I. Instant feedback
II. Provides evidence
III. Useful for detailed messages

(A) I and II only

(B) I and III only
(C) II and III only
(D) I, II and III

20) Under which of the following categories would subsidized meals for employees fall?
(A) Fringe benefits
(B) Duty allowance
(C) Wages and salaries
(D) Workmen’s compensation

END OF EXAM