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TESTCODE 01240010
FORM TP 2014105 MAY/JUNE 2014

CARIBBEAN EXAMINATIONS COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01 - General Proficiency
1 hour 15 minutes

( 28 MAY 2014 (p.m.))

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This test consists of 60 items. You will have 1 hour and 15 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

3. 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.

4. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample Item
The money that a business receives from the sale
of goods or services is called its Sample Answer
(A)
(B)
assets
capital
0® II@
(C) mcome
(D) resources
The best answer to this item is "income", so answer space (C) has been shaded.

5. If you want to change your answer, erase it completely before you fill in your new choice.

6. When you are told to begin, tum the page and work as quickly and as carefully as you can.
If you cannot answer an item, go on to the next one. You may return to this item later. Your

--
i iiii
score will be the total number of correct answers.

DO NOT '{URN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

--==
---=== Copyright © 2012 Caribbean Examinations Council
All rights reserved.

- 01240010/F 2014
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-2-

1. Barter is BEST described as the 5. In a public limited company, the losses are
borne by the
(A) process of exchange involving the
use of money (A) staff
(B) purchase of goods and services (B) directors
using cheques (C) community
(C) exchange of goods and services (D) shareholders
without the use of money
(D) exchange of goods and services
using notes and coins 6. The PRIMARY role of the human resource
department of an organization is to

2. Labour is BEST defined as the (A) hire, recruit, train and motivate
workers
(A) physical and mental capabilities (B) promote recreational activities for
used to perform tasks workers
(B) ability to carry out management (C) assist employees in understanding
functions effectively industrial relations
(C) level of skills training received by (D) produce magazines highlighting
individuals who are working outstanding workers
(D) total number of persons who hold
jobs in government ministries

3. Which of the following is NOT a trading

instrument?

(A) Cheques
(B) Credit cards
(C) Bills of exchange
(D) Money remittance

4. The term ' trade' refers to

(A) the selling of goods and services

on the stock market
(B) the movement of immigrants from
one country to another
(C) any commercial activity involving
the exchange of goods and
serv1ces
(D) the negotiation process between
trade unions and management

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01240010/F 20 14
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-3-

Items 7-8 refer to the following diagram.

I
CEO
I
I

I
I I I I
Sales Production Finance
r- I--
Manager Manager Manager

'--- HR 1 [ Purcha~ing } -
Supervisor Supervisor

7. The purchasing supervisor reports directly 9. Which of the following departments is

to which of the following? LIKELY to use its Management Information
System (MIS) to manage information about
(A) CEO customers and their response to the products
(B) HR Supervisor they sell?
(C) Finance Manager
(D) Production Manager (A) Finance
(B) Marketing
(C) Production
8. Which of the following positions would be (D) Human Resource
BEST suited at 'X'?

(A) Chief Advisor 10. Subsidised meals for employees would fall
(B) Board of Directors under which of the following categories?
(C) Managing Director
(D) Human Resource Manager (A) Fringe benefits
(B) Duty allowance
(C) Wages and salaries
(D) Workmen's compensation

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-4-

11. A MAJOR role of a trade union is to 15. The synopsis of the business plan ts
encourage the contained in the

(A) unionization of workers (A) feasibility plan

(B) advancement of the welfare of its (B) marketing plan
members (C) keynote summary
(C) sacking of workers whenever they (D) executive summary
have problems at work
(D) increase of salaries and vacations
16. A post-dated cheque is one which

12. An entrepreneur who wants to maintain (A) is dated for payment at a future date
control of the business would be advised (B) was written no longer than six
to register the business as a months ago
(C) is dated to agree with the date of the
(A) Sole Trader document requesting payment
(B) Partnership (D) is dated by the bank on the day the
(C) Limited Company cheque is presented for payment
(D) Private Limited Company

17. Which of the following factors prevents an

13. Which ofthe following is NOT an example agreement from being considered a valid
of collateral? contract?

(A) Bonds (A) Consideration

(B) Stocks (B) Legal purpose
(C) Property (C) Misrepresentation
(D) Money orders (D) Offer and acceptance

14. The MOST important use of collateral 18. A contract may be discharged by which of
security to the lender is that it the following?

(A) can be seized if the borrower fails I. Breach

to pay II. Performance
(B) establishes the financial position III. Lapse of time
of the borrower
(C) improves the borrower's chance of (A) I and II only
getting a loan (B) I and III only
(D) gives the lender an idea of the state (C) II and III only
of the business (D) I, II and III

19. A 'purchase order' is a

(A) request for additional goods

(B) notification of goods received
(C) statement of outstanding debts
(D) document offering to buy goods

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-5-

20. Which of the following types of cheques 25. Which of the following conditions would
allows an individual to receive cash on constitute a linkage between two industries?
demand?
(A) Two firms manufacture similar
(A) Open goods.
(B) Crossed (B) One firm shares the use ofmachinery
(C) Certified with another firm.
(D) Banker's (C) Two firms are responsible for the
manufacture of different kinds
of goods.
21. Which of the following types of capital (D) The output of one industry of the
is used for the day-to-day operations of a economy becomes the input of
business? another industry.

(A) Fixed
(B) Floating 26. Which ofthe following is a feature ofperfect
(C) Working competition?
(D) Nominal
(A) Few buyers and many sellers
(B) Many buyers and few sellers
22. Which ofthe following factors ofproduction (C) Barrier to entry into the market
earns interest? (D) Many buyers and many sellers

(A) Land
(B) Capital 27. Which of the following is an example of
(C) Labour service-type production?
(D) Enterprise
(A) Oil mining
(B) Pottery making
23. The term 'human resources' refers to (C) Communication
(D) Newspaper printing
(A) materials and goods made by human
beings
(B) capital invested by shareholders in 28. The PRIMARY function of advertising is to
a company
(C) raw materials used in the manufac- (A) promote brand loyalty
ture of goods (B) promote public relations
(D) persons available for productive (C) communicate information
and professional services (D) ensure wider distribution of goods

24. Which of the following items is a product 29. Which of the following is NOT a function
of the manufacturing industry? of the retailer?

(A) Gold (A) Preparing goods for resale

(B) A car (B) Selling in small quantities
(C) Wood (C) Providing a local supply of goods
(D) A house (D) Transporting goods to suitable
storage facilities

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-6-

30. Which of the following market situations 34. Market equilibrium exists when
is typically found where there are a large
number of producers and consumers? (A) buyers pay reasonable prices for
goods
(A) Oligopoly (B) sellers are satisfied with the prices
(B) Monopoly paid for their goods
(C) Perfect market (C) at current prices, the amount buyers
(D) Imperfect market wish to buy equals the amount
sellers want to sell
(D) at the ruling market price, buyers
31. Which of the following gives identity to a do not want to add to the stock
specific producer's goods? of goods they already have

(A) Label
(B) Brand 35. Which of the following may cause the bank
(C) Patent to dishonour a cheque?
(D) Copyright
I. Cheque is crossed
II. Irregular signature
32. In which of the following types of trade III. Cheque is post-dated
can the hire purchase method of buying be
used? (A) I and II only
(B) I and III only
(A) Retail (C) II and ill only
(B) Import (D) I, II and III
(C) Foreign
(D) Wholesale
36. Which of the following is a function of
the commercial bank and NOT the central
33. The price of an article is usually high when bank?
there is a
(A) Providing personal loans
(A) large quantity for sale and few (B) Carrying out monetary policy
people wanting to buy (C) Giving advice to government
(B) small quantity for sale and few (D) Managing the financial sector
people wanting to buy
(C) large quantity for sale and many
people wanting to buy 37. Which ofthe following are characteristics
(D) small quantity for sale and many of a stock market?
people wanting to buy
(A) Costs and prices
(B) Risks and benefits
(C) Rent and investment
(D) Premium and reward

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38. Tom invests his savings by buying shares 43. Which of the following is NOT regarded
in a company. From this investment Tom as a role of taxation?
expects to receive
(A) To raise revenue for government
(A) profits (B) To influence the distribution of
(B) interests incomes and wealth
(C) revenues (C) To influence total expenditure on
(D) dividends goods and services
(D) To influence the investment deci-
sions of publicly owned enter-
39. One of the MAJOR functions of a Central prises
Bank is to

(A) issue notes and coins 44. Which of the following actions by
(B) issue stocks and shares government is MOST likely to lead to an
(C) accept deposit accounts improvement in the standard of living?
(D) make loans and advances
(A) Printing more money
(B) Increasing the income tax rate
40. Investment can be defined as (C) Abolishing taxes on low incomes
(D) Giving tax incentives to businesses
(A) the stock of goods in a country
(B) additions to the capital stock of a
country 45. Which ofthe following forms of taxation can
(C) the amount of money available at be classified as 'direct'?
a given time
(D) the amount of capital owned by the (A) Income tax
government (B) Excise duty
(C) Purchase tax
(D) Customs duty
41. Which ofthe following forms of taxation is
imposed on goods produced in a country?
46. Governments offer subsidies to businesses
(A) Excise duty to
(B) Preference duty
(C) Excise drawback (A) force them to pay corporation tax
(D) Customs drawback (B) increase costs and ultimately prices
(C) reduce the costs and ultimately
prices
42. A price control may be defined as a (D) increase the price ofimported goods

(A) tax on goods and services

(B) government ban on imports 47. Which of the following forms of taxation
(C) government limit on the price of a requires every employee to pay the same
good or service percentage of his salary in taxes?
(D) grant given to producers to reduce
their prices (A) Indirect
(B) Regressive
(C) Progressive
(D) Proportional

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-8-

48. In calculating Net National Product, 52. Which of the following is NOT a feature
depreciation refers to the of free trade?

(A) increase in the price level (A) Protectionism

(B) decrease in the price level (B) Trade specialization
(C) decrease in capital stock value (C) Increase in world output
(D) increase in capital stock value (D) Comparative cost advantage

49. Inflation can BEST be described as 53. The total value of goods imported minus
the total value of goods exported is referred
(A) fluctuations in the general price to as
level
(B) a general and sustained rise in the (A) balance of trade
level of prices (B) total currency flow
(C) a fall in the level of prices of goods (C) balance of payments
and services (D) current account balance
(D) changes in the level of prices of
goods and services
54. A quota can BEST be described as

50. Export licences are issued MAINLY to (A) a ban on the sale of goods
(B) a licence given to import goods
(A) encourage local businesses to (C) an external tariff among countries
produce more goods for export (D) a restriction on the quantity
(B) enable the government to control imported
the flow of goods being exported
(C) indicate to the importing country
that the goods are of a high 55. The term 'economic dualism'defines an
standard economy in which one sector is
(D) indicate to the importing country
the price at which the goods are (A) highly dependent on local capital
to be sold (B) highly dependent on foreign capital
(C) overpopulated while the other is
underpopulated
51. The term 'trade in securities' refers to (D) technologically advanced while the
other is technologically retarded
(A) the selling of goods and services
on the stock market
(B) the movement of immigrants from 56. To correct an adverse balance of payments,
one country to another a government may
(C) the negotiation process between
trade unions and management (A) reduce credit
(D) any commercial activity involving (B) increase exports
the exchange of goods and (C) reduce income tax
services (D) increase the money supply

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-9-

57. The purpose ofCARICOM is to 59. In periods of inflation, the ability to raise
additional capital for expansion is MOST
(A) allow member states to collaborate likely to be a problem for
(B) foster interregional trade and
common services (A) sole traders
(C) encourage the transfer of tech- (B) partnerships
nology within the region (C) public companies
(D) allow for unrestricted movement (D) multi-national corporations
of persons among the territories

60. Which of the following countries are NOT

58. The MAJOR aim of the European Union members of the Organization of Eastern
(EU) is free movement of Caribbean States (OECS)?

I. goods (A) Anguilla and Grenada

II. people (B) Guyana and Bahamas
III. capital (C) Barbados and Jamaica
(D) Dominica and St. Lucia
(A) I and II only
(B) I and III only
(C) II and III only
(D) I, II and III

ENDOFTEST

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

01240010/F 2014
 %,
rcoDE 012400t 0
FORM TP 201510s MAY/JUNE 2015

CARIBBEAN EXAMINATIONS COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTItr'ICATE@
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01 - General Proficiency
I hour 15 minutes

27 MAY 201s (p.m.)

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

t. This test consists of 60 items. You will have t hour and l5 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

3. 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.

4. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample Item

The money that a business receives from the sale

of goods or services is called its Sample Answer
(A) assets
@@o@
(B) capital
(C) income
(D) resources

The best answer to this item is "income", so (C) has been shaded.

5. If you want to change your answer, erase it completely before you fill in your new choice.

6. When you are told to begin, turn the page and work as quickly and as carefully as you can. If
ffi
WT you cannot answer an item, go on to the next one. You may return to that item later.
3=S
crtt
ffi-
sffi:
. : DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.
===
I
:!!- Copyright @ 2013 Caribbean Examinations Council
I All rights reserved.
I
- 0r240010/F 2015
-
 -2-

1. Barter is BEST described as the 6. The policies of a company are formulated

by the
(A) purchase of goods and services
using cheques (A) auditors
(B) process of exchange involving the (B) directors
use of money (C) managers
(C) exchange of goods and services (D) shareholders
using notes and coins
(D) exchange of goods and services
without the use of money 7. Selecting the objectives and the procedures
for achieving goals is referred to as

2. Which of the following types of business (A) planning

environment is MOST typical of the (B) organizing
Commonwealth Caribbean? (C) controlling
(D) motivating
(A) Corporate state
(B) Mixed economy
(C) Centrally planned 8. Which of the following are benefits of
(D) Perfectly competitive written communication?

I. Instant feedback
3. WhichofthefollowingisNOTanobjective II. Provides evidence
of the public sector? IIL Useful for detailed messages .

(A) Maximizing profits (A) I and II only

(B) Providing essential services (B) I and III only
(C) Regulating business activity (C) II and III only
(D) Promoting economic growth and (D) I,II and III
development

9.
Which of the following organizations
4. Theterm'divisionoflabour'canbedefined is LEAST likely to use a management
as the information sYstem?

(A) organization oftasks in production (A) The national bank

(B) assemblingofgoodsfordistribution (B) A shoe-shine shop
(C) separation of tasks to complete a (C) A deparhnQnt store
job (D) AbeautY suPPlies outlet
(D) employment of different types of
workers

5. Which of the following is NOT a function

of money?

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

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 -3-

Item l0 refers to the following diagram which shows a section of a typical vertical organizational
chart for a manufacturing company.

10. The relationship between the highest level of management down to the various departrrents is
known as

(A) line
(B) rank
(c) staff
(D) flow

11.. TheMAlNpurposeofinstallingasuggestion 13. Which of the following individuals benefit

box in a company is to get workers'views from having 'limited liability status'?
about
(A) Franchisees
(A) each other (B) Shareholders
(B) other companies (C) Ordinary parfirers
(C) ways of improving the workplace (D) Debenture holders
(D) ways of improving economic
conditions
14. Which ofthe following are functions ofthe
entreBreneur?

12. JB Auto Company decided to export I. Ensuringthatworkersareunionized

car engines from Barbados to Trinidad. U. Co-ordinating the factors of
Whichofthe following modes is BEST for production
transporting the engines? m. Undertaking risks by anticipating
demand
(A) Air
(B) Sea (A) I and II only
(C) Rail (B) I and III only
(D) Land (C) II and III only
(D) I, II and III

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 -4-

15. The condensation of the business plan is 20. Which of the following factors prevents an
contained in the agreement from being considered a valid
contract?
(A) feasibility plan
(B) marketing plan (A) Consideration
(C) keynote summary (B) Legalpurpose
(D) executive summary (C) Misrepresentation
(D) Offer and acceptance

16. Cash used to secure a loan at the bank is

referred to as 21. The term 'human resources'refers to

(A) collateral (A) materialsandgoodsmadebyhuman

(B) fixed assets beings
(C) current assets (B) capital invested by shareholders in
(D) fixed deposits a company
(C) raw materials used in the
manufacture of goods
17. The monthly payments collected by an (D) persons available forproductive and
insurance company on behalf of its policy professional services
holders are known as

(A) deposits 22. The movement of educated, skilled people

(B) premiums to settle in other industrialized countries is
(C) instalments referred to as
(D) endowments
(A) migration
(B) brain drain
r8. Which of the following types of cheques (C) unemployment
allows an individual to receive cash on (D) underemployment
demand?

(A) Open 23. The amount of labour available for

.(B) Crossed productive activity is known as
(C) Certified
(D) Banker's (A) employment
(B) labour force
(c) labour movemgnt
19. Kiki sustained burns while at work at a (D) efficiency of labour
local fast food restaurant. Under which
of the following insurance policies is she
LIKELY to be compensated?

(A) Public liability

(B) Fidelity guarantee
(C) Properfy guarantee
(D) Employers'liability

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 -5-

24. Productivity can be measured by 28. Which of the following terms describes
a market consisting of a large number of
(A) Inputs producers and consumers?
Outputs
(A) Oligopoly
(B) Inputs (B) Monopoly
Revenue (C) Perfect market
(D) Imperfect market
(C) Revenue
OutputS
29. Which of the following is an activity
(D) Outputs involved in marketing a product?
lnputs
(A) Issuing bulletins on staffmatters
(B) Distributingcommoditiestooutlets
25. Which of the following is a product of the (C) Publicizingadvertisementsfornew
manufacturing industry? staff
(D) Ensuring that workers are given
(A) Car fringe benefits
(B) Gold
(C) Tourist
(D) Lumber 30. Market equilibrium exists when

(A) buyers pay reasonable prices for

26. Product, price, promotion and place are goods
components of a (B) sellers are satisfied with the prices
paid for their goods
(A) market study (C) at the ruling market price, buyers
(B) marketing mix do not want to add to the stock
(C) market research of goods they already have
(D) sales promotion (D) at current prices, the amount buyers
wish to buy equals the amount
sellers want to sell
27. In the Caribbean, many people are hired
for sugar cane farming and very little
equipment is used. This industry can BEST 31. Which of the following is NOT a function
be described as of the retailer?

(A) labow intensive (A) Preparing goods for resale

(B) capital intensive (B) Selling in small quantities
(C) having low capital input (C) Providing a local supply of goods
(D) having high capital input (D) Transporting goods to suitable
storage facilities

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 -6-

32. Which of the following gives.identity to a 37. MrJones has several bills offixed amounts
specific producer's goods? to pay each month. His bank manager
agreed to pay them monthly from Mr Jones,
(A) Label account. This service, provided by the bank,
(B) Patent refers to
(C) Brand
(D) Copyright (A) overdrafts
(B) letters of credit
(C) standing orders
33. A'market'in economic terms is defined as (D) acting as trustees

(A) the business cenft e ofthe community

(B) a specific place where buyers and 38. Which ofthe following services is provided
sellers meet by commercial banks?
(c) aplace where intangible goods are
bought and sold (A) Printing money
(D) a situation which exists when buyers (B) Selling stocks and bonds
and sellers influence the price of (C) Controlling the supply of money
goods (D) Accepting deposits from customers

34. Which of the following operations is an 39. A debenture holder is one who
example of sales promotion?
(A) is paid a fixed rate of interest
if the.
(A) Warehousing company makes profits
(B) Free sampling (B) must be paid any amounts owing
(C) Servicing goods to him in the following year
(D) Gathering information (C) has first claim on any profits and is
paid a fixed rate of dividend
(D) is entitled to a fixed rate of interest
35. Which of the following entities can have whether or not the company
its shares taded on the stock exchange?
makes profits

(A) Parnrerships
(B) Public companies 40. Invesfinent can be defined as
(C) Private companies
(D) Co-operative societies (A) the stock of goods in a country
(B) - additions to the capital stock of a
country
36. Tom invests his savings by buying shares (C) the amount of money available at
in a company. From this investment, Tom a given time
expects to receive (D) the amountofcapital owned by the
government
(A) profits
(B) interest
(C) revenue
(D) dividends

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 -7 -

41. Which of the following are measures used 45. Which of the following actions by
to protect the environment? govemment is MOST likely to lead to an
improvement in the standard of living?
I. Recycling
II. Deforestation (A) Printing more money
il. Water conservation (B) Increasing the income tax rate
(C) Abolishing taxes on low incomes
(A) I and II only (D) Giving tax incentives to businesses
(B) I and III only
(C) II and III only
(D) I,II and III 46. Which of the following forms of taxation
can be classified as 'direct'?

42. A'price control'may be defined as a (A) Income tax

(B) Excise duty
(A) tax on goods and services (C) Purchase tax
(B) government ban of imports (D) Customs duty
(C) grant given to producers to reduce
their prices
(D) government limit on the price of 47. The provision of social services by
goods or services government does NOT include

(A) tax refunds

43. The success of government's economic (B) health clinics
policies can be MOST effectively measured (C) education and training
by (D) transportation facilities

(A) an increase in the level of policies

(B) anincreaseinthestandardofliving 48. In the recent budget it was reported that
(C) adecreaseinthelevelofemployment Sanfordlslandisanetimporter. Thismeans
(D) a decrease in the volume of that its
roduction
(A) exports are equal to imports
(B) exports are less than imports
44. Which of the following is a function of a (C) balance of trade is favourable
Chamber of Commerce? (D) balance of payment is favourable

(A) Creating employment -

(B) Protecting the environment 49 . A country has a favourable balance oftrade
(C) Assisting in securing markets for when
- producers
(D) Providingfinancialaidtohurricane (A) it sells more than it buys
victims (B) it buys more than it sells
(C) imported goods are cheaper
(D) there are no restrictions to trade

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 -8-

50. In calculating 'net national product', 54. Which of the following is NOT a benefit of
depreciation refers to the international trade?

(A) increase in the price level (A) Producers are able to increase their
(B) decrease in the price level market size.
(C) increase in capital stock value (B) Political links are developed with
(D) decrease in capital stock value other countries.
(C) Import restrictions can be imposed
on foreign items.
51. The'terms of trade'of a country refers to (D) A greater variety of goods is
the rate obtained from overseas.

(A) at which the counfiry's population

grows 55. Which of the following represents the
(B) oftumoveroflifeexpectancydue correct stages towards the development
to nutrition of the CARICOM Single Market and
(C) of income a country obtains from Economy?
increasing growth
(D) at which one country's goods (A) CARIFTA+Federation
and services are exchanged for CARICOM * CSME
another's
(B) CARIFTA---+CARICOM+
Federation 4 CSME
52. The difference between the value of a
countr5r's visible and invisible exports and (C) Federation-+CARICOM-+
the value ofits visible and invisible imports CARIFTA -* CSME
is referred to as the
(D) Federation -+ CARIFTA-->
(A) balance of trade CARICOM --+ CSME
(B) per capita income
(C) balance of paymerrts
(D) gross national product 56. Which of the following is a feature of eco-
nomic dualism in the Caribbean?

53. Which of the following methods is NOT (A) Small farming sector
used to measure a country's national (B) Urban-rural migration
income? (C) Rural-urban migration
(D) Large manufacturing sector
(A) Output
(B) Income
(C) Accounting 57. Which of the following terms defines a
(D) Expenditure continuous rise in the general level ofprices?

(A) Inflation
(B) Reflation
(C) Deflation
(D) Depression

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 -9-
58. Which of the following countries are NOT 60. Which of the following or ganizations would
members of the Organization of Eastern settle a dispute among banana-producing
Caribbean States? countries of the Caribbean and Central
America over preferential agreement with
(A) Anguilla, Grenada the European Union?
(B) Barbados, Jamaica
(c) Montserrat, Saint Lucia (A) World Trade Organization (WTO)
(D) Dominica, Saint Vincent (B) Caribbean Development Bank
(cDB)
(c) CARICOM Single Market and
59. The purpose of CARICOM is to Economy (CSME)
(D) Organization of Petroleum
(A) allow member states to collaborate Exporting Countries (OPEC)
(B) allow for unrestricted movement
of persons among the
territories
(c) encourage the transfer oftechno lo gy
within the region
(D) foster interregional trade and
common services

END OF'TEST

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

0t240010tF 2015
 nrme on thc litre belotr *trd returr
thls booklet with your answer sheet Failure
so mry result in disquallficatior. sr coDE 01240010
FORM TP 2016105 MAY/JT]NE 2016

CARIBBEAN EXAMINATIONS COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTIFICATE@
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01- General Proficiency
I hour 15 minutes

2s MAY2016 (p.m.)

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This test consists of 60 items. You will have t hour and 15 minutes to answer them.

In addition to this test booklet, you should have an answer sheet.

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

-1 On your answer sheet. flnd the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample Item

The money that a business receives from the sale

of goods or services is called its Sample Answer

(A)
(B)
assets
capital
A B
o@
(C) income
(D) resources

The best answer to this item is "income", so (C) has been shaded.

If you want to change your answer, erase it completely before you fill in your new choice.

When you are told to begin, turn the page and work as quickly and as carefully as you can. If
you cannot answer an item, go on to the next one. You may return to that item later.

- DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

-
- Copyright A 2014 Caribbean Examinations Council
---r All rights reserved.
- r,r1240010/F 2016
 -2-

6 Which of the following is NOT an activity in

1. The term 'trade'refers to
the planning process?
(A) the selling of goods and services
on the stock market
(A) Setting goals
(B) the movement of immigrants from
(B) Establishing policies
one country to another
(c) Identifying resources
(c) any commercial activity involving
(D) Delegating responsibility
the exchange of goods and
services
(D) the negotiation process between IIgd refers to the following information.
trade unions and management
Mr Lloyd, manager of LM Ltd holds
regular staffmeetings to listen to ideas from
employees before making decisions ftat
2. Which of the following types of business
u,ould affect the future of the company.
environments is MOST typical of the
Commonwealth Caribbean? 'What leadership style does
7 Mr Lloyd
(A) employ?
Corporate state
(B) Mixed economy
(c) Centrally planned
(A) Autocratic
(B) Democratic
(D) Perfectly competitive
(c) Charismatic
(D) Laissez faire

3 A to seek out
person who has the abiliry
and undertake the risk of nerr' business
8. Selecting the objectives and the proce&res
oppornrnities is referred to as
for achieving goals is referred to as
(A) a producer
(A) planning
(B) an inventor
(B) organizing
(c) a shareholder
(c) controlling
(D) an entrepreneur
(D) motivating

4. In a public limited company, the losses are

9 Which of the following demonstrates the
borne by the
characteristics ofa good leader?

(A) staff
(B) directors
I. Inspiring w'orkers
(c) community
II. Delegating responsibilities
(D) shareholders
III. Making intelligent decisions

(A) I and II only

(B) I and III only
5. In which ofthe fotlowing types ofeconomic
(c) II and III only
systems does the government make all
(D) I, II and III
decisions?

(A) Mixed
(B) Capitalist
(c) Command
(D) Subsistence

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 -J

r0. Under which of the following categories 15. Which of the following is NOT an example
would subsidizedmeals for employees fall? ofan unethical business practice?

(A) Fringe benefits (A) Money laundering

(B) Duty allowance (B) Nonpayment of taxes
(c) Wages and salaries (C) Misleading advertisements
(D) Workers' compensation (D) Retrenching inefficient workers

11 Which ofthe following activities ca:ried out 16. A post-dated cheque is one which
in a flrm will NOT be under the supervision
of the marketing manager? (A) was written no longer than six
months ago
(A) Packaging (B) is dated to agree with the date ofthe
(B) Purchasing document requesting payment
(C) Advertising (c) is dated for payment at a future date
(D) Distributing (D) is dated by the bank on the day the
cheque is presented for payment
12. An entrepreneur who wants to maintain
control of the business would be advised
17 Which of the following reasons can be used
to register the business as a
for voiding a contract?

(A) partnership
I. There was no consideration.
(B) sole ffader
(c)
il. There was no meeting of minds.
limited company
m. The agreement was not in writing.
(D) private limited company
(A) I and II only
13 Which of the following is a regulatory issue (B) I and III only
for the entrepreneu? (c) II and III only
(D) I, II and III
(A) Using a credit card to transact
business
(B) Offering hire purchase options to 18. A contract may be discharged by
customers
(cI Paying national insurance to the
(A) breach
government
(B) change of mind
(D) Advertising the business locally
(C) inconsideration
and regionally
(D) misappropriation

14. The MOST important use of collateral t9 Fred and his friends went to the cinema.
security to the lender is that it On his way out Fred fell and was injured.
What type of insurance would protect the
(A) establishes the financial position of owner of the cinema against claims made
the borrower by Fred?
(B) can be seized if the borrower fails
to pay (A) Industrial insurance
(C) improves the borrower's chance of (B) Public liability insurance
getting a loan (c) Fidelity guarantee policy
{D) gives the lender an idea of the state (D) Employers' liability insurance
of the business

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 -4-

20 Which of the following types of cheques 24. One feature of capital intensive flrms is that
allows an individual to receive cash on they
demand?
(A) raise large amounts of capital
(A) Open (B) provide capital for other flrms
(B) Crossed (c) use more machinery and less people
(c) Certified (D) use more people and less machinery
(D) Banker's

25 Which of the following conditions would

21. To which of the following industries does constitute a linkage between two industries?
a fi rm involved in food processing belong?
(A) Two firms manufacture similar
(A) Service goods.
(B) Extractive (B) Oneflrmsharestheuseofmachinery
(c) Constructive with another flrm.
(D) Manufacturing (C) Two firms are responsible for the
manufacture of different kinds
ofgoods.
22 Joseph has decided to leave his homeland (D) The output of one industry of the
of Jamaica to go to the USA in search of economy becomes the inPut of
a better life. This movement is referred to another industry'.
as

(A) brain drain 26. Which of the following resr:lts rs LEAST

(B) early migration likely to occur from gro*'th in an
(c) internal migration organization?
(D) external migration
(A) Greater productivitY
(B) More division of labour
IIem,23 refers to the following information. (C) Increased communication
(D) Increased capital inr-esment
Mr Jones receives a job offer from a
company in Barbados. In order to take up
this new job, Mr Jones decides to leave 27 Which of the follou'in,e commodius is a

his home country of Trinidad and move product of the manufacturing indusry?
permanently to Barbados.
(A) Cars
23 In Trinidad Mr Jones would be referred to (B) Gold
AS (C) Lumber
(D) Houses
(A) a refugee
(B) an emigrant
(c) an immigrant 28. The term 'loss leader'is BEST described
(D) a travelling officer as a product which

(A) has no real market value

(B) the retailer is unable to locare
(C) is sold cheaply to attract ctlstorrEs
(D) the retailer gives ar*-a1-to clrsto{x}ers

GO ON TO THE \TXT P.{GE

rr11AAfr1 nttr )i1 A
 5

'ro Under which of the following conditions 34. In a Caribbean territory there is only one
is a trade discount used? supplier that provides electricity to all
homes, businesses and communities. What
(A) Bulk purchases market structure does this BEST illustrate?
(B) Prompt payment
(C) Payment by cash (A) Duopoly
(D) First-time buyers (B) Oligopoly
(c) Monopoly
(D) Perfect competition
30. Which of the following is NOT a terms of
sale?
35. Which of the following terms is associated
(A) Cash with a stock market?
(B) Credit
(c) Shares (A) Costs and prices
(D) Hire purchase (B) Risks and benefits
(c) Rent and investment
(D) Premium and reward
31. Which of the following factors is LEAST
likely to influence consumer behaviour?
35 Tom invests his savings by buying shares
(A) Product price in a company. From this investment Tom
(B) Brand loyalty expects to receive
(c) Quality of goods
(D) Place ofresidence (A) profits
(B) interest
(C) revenue
32 A situation where a business gains editorial (D) dividends
space without having to pay for it is called

(A) publicity 37 Mr Jones has several bills of fixed amounts

(B) marketing to pay each month. His bank agreed to pay
(C) advertising them monthly from Mr Jones' account. This
(D) discounting service, provided by the bank, is referred
to as

33 The price of an article is usually high when (A) an overdraft

there is a (B) a fixed deposit
(c) a standing order
(A) large quantity for sale and few (D) a letter of credit
people wanting to buY
(B) small quantity for sale and few
people wanting to buY 38. One of the MAJOR functions of a Central
(C) large quantity for sale and many Bank is to
people wanting to buY
(D) small quantity for sale and many (A) issue notes and coins
people wanting to buY (B) issue stocks and shares
(c) accept deposit accounts
(D) make loans and advances

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 -6-

Items 3qJ0 refer to the following diagram 42. Governments can influence business
which represents the market for pears. The activity positively by reducing
original demand curve is DD.
(A) taxes
v (B) glants
(c) spending
7 (D) subsidies
G
I 6
0)

L
5 43 Which of the following is NOT regarded
as a role of taxation?

3 (A) To raise revenue for governments

(B) To influence the distribution of
u incomes and wealth
I D (c) To influence the investment
decisions of publicly owned
x
0
1234567 8 enterprises
(D) To influence total expenditure on
Quantity of pears (000) goods and services

39. PontZ on the diagram represents the

44 Which of the following actions bY
(A) price govemment is MOST likely to lead to an
(B) demand improvement in the standard of living?
(c) equilibrium point
(D) equilibrium quantitY (A) Printing more money
(B) Increasing the income tax rate
(C) Abolishing taxes on low incomes
40. The equilibrium Price is (D) Giving tax incentives to businesses

(A) s0.00
(B) $3.s0 45. Which of the following statements
(c) s4.00 accurately describes taxation as a means
(D) $7.00 of redistributing incomes?

(A) The rich pay taxes and the poor do

41. Which of the following measures may be not.
used by government to protect consumers?
(B) Tax is used to distibute income
more efficiently throughout the
I. Price controls countrY.
[. Custom duties (C) Tax is usedto spread income evenly
m Provision of subsidies between the higher and lower
income earners.
(A) I and II only (D) Thehigherincomeearnersaretared
at a higher rate to provide benefi ts
(B) I and III only
(c) II and III only to lower income earners.
(D) I, II and III

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n 1r,{nnln/E ,nl6
#. Which of the following BEST explains a 49 Which of the following practices would
'proportional tax'? contribute to the economic growth and
development of a country?
(A) The rate oftax increases as income
increases. (A) Increasedimportationofconsumer
(B) The same rate of tax is paid at all goods
income levels. (B) Decreased use of the country's
(C) Higherincomeeamerspayasmaller natural resources
percentage of income in tax than (C) Exporting skilled personnel to
lower income earners. developed countries
(D) Lower income earners pay a larger (D) Provision of loans and technical
percentage of income in tax than assistance for establishing local
higher income earners. businesses

Item47 refers to the following inforrnation 50. Export licences are issued MAINLY to
which shows fi gures taken from a country's
balance of payments accounts. (A) encourage local businesses to
produce more goods for exPort
Goods Services
(B) enable the government to control
the flow ofgoods being exPorted
Exports $160 m $300 m (C) indicate to the importing country
Imports $120 m 5140 m that the goods are of a high
standard
47. The country's balance of trade is (D) indicate to the importing country
the price at which the goods are
(A) -$ 120 m to be sold
(B) +s 120 m
(C) -$ 200 m
(D) +$ 2oo m 51 A measure which limits the quantity of
goods thatcitizens of a country are allowed
to buy from overseas is known as an
48. In calculating Net National Product,
depreciation refers to the (A) import duty
(B) export dutY
(A) increase in the price level (C) export quota
(B) decrease in the Price 1evel (D) import quota
(C) decrease in capitai stock value
(D) increase in capital stock value
52 Which ofthe following does NOT contribute
to an improved standard of living of a countT/?

(A) An increase in capital goods

(B) An increase in disposable income
(c) An increase in the countrY's
population
(D) An increase in investment in
technology

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0r2400r0tF 2016
 -8-
53. Which of the following is an example of 57. The purpose of CARICOM is to
tariffs?
(A) allow member states to collaborate
(A) Excise duties (B) foster interregional trade and
(B) Property taxes common services
(c) Custom duties (C) encouragetheftansferoftechnology
(D) Value added taxes within the region
(D) allow for unrestricted movement
of persons among the territories
54 Visible hade examines the difference between
a country's 58 Which of the following o r garuzations would
settle a dispute among banana-producing
(A) imports and exports of goods only countries of the Caribbean and Central
(B) imports and exports of services only America over preferential agreement with
(c) current account and capital account the European Union?
(D) output method and expenditure
method (A) World Trade Organization (WTO)
(B) Caribbean Development Bank
(cDB)
53. The term 'economic dualism'refers to an (c) CARICOM Single Market and
economy in which one sector is Economy (CSME)
(D) Organization of Petroleum
(A) highly dependent on local capital Exporting Countries (OPEC)
(B) highly dependent on foreign capital
(C) overpopulated while the other is
59 In periods of inflation, the ability to raise
underpopulated
additional capital for expansion is MOST
(D) technologically advanced while the
likely to be a problem for
other is technologically retarded
(A) sole traders

50 Which of the following is a benefit of the

(B) partnerships

CSME?
(C) public companies
(D) multi-national corporations
(A) A common trade policy
(B) Reduced cost of housing 60 Industrialization is an important strategy
(c) Reduced cost of air travel in the fight against poveffy. Which of the
(D) More equitable distribution of income following is a benefit of an increase in the
development of industries?

(A) A reduction in the level of exports

(B) Areduction in the level of imports
(c) An increase in the level ofmigration
(D) An increase in the rate of
unemployment

END OF TEST

IF'YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORI( ON THIS TEST.

0r2400t01F 2016
SysTools PDF Watermark Demo Version
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coDE 01240010
FORM TP 2017104 MAY/JUNE 2OI7

CARIBBEAN EXAMINATIONS COUNCIL

CARIBBEAN SECOI\IDARY EDUCATION CERTIFICATE@

PRINCIPLES OF BUSINESS
Paper 01- General Proficiency
7 hour 15 minates

19 MAY2017 (p.m.)

READ TIIE FOLLOWING INSTRUCTIONS CAREFT]LLY.

1. This test consists of 60 items. You will have I hour and 15 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet. I

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

4. On your lmswer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample ltem I ,

I
The money that a business receives from the sale
of goods or services is called its Sample Answer
(A) assets
@@o@
(B) capital
(C) income
(D) resources

The best answer to this item is "income", so (C) has been shaded.

5. lf you want to change your answer, erase it completely before you fiIl in your new choice.

6: When you are told to begin, turn the page and work as quickly and as carefully as you can. If +
you cannot answer an item, go on to the next one. You may return to that item later.

DO No;f TURN THIS PAGE T]NTIL YOU ARE TOLD TO DO SO.

Copyright @ 2015 Caribbean Examinations Council

All rights reserved.

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-2-

I Which of the following types of business 4. The term 'division of labour' can be defined
environment is MOST tYPical of the as the
Commonwealth Caribbean?
(A) organization oftasks in production
(A) Corporate state (B) assemblingofgoodsfordistribution
(B) Mixed economy (C) separation of tasks to complete a
(C) CentrallY Planned
job
(D) employment of different types of
(D) PerfectlY comPetitive
- workers

2. Labour is BEST defined as the

5. Private enterprise is run MAINLY to
(A) physical and mental caPabilities
used to perform tasks (A) create profits
(B) ability to carry out management (B) reduce inflation
functions effectivelY (c) distribute goods and services
(D) provide jobs for more PeoPle
(c) level of skills training received by
individuals who are working
(D) total number of Persons who hold
jobs in govemment ministries

3 AMAIOR function of the public sector

is to

(A) make a profit

(B) serve the entire PoPulation
(c) serve the interest qfthe sharelrolder
(D) inspire competition among
businesses I

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-J-

Items 6-7 refer to the followiitg diagram relating to the structure of an organization.

CEO

SaIeS Froduction Finance

Manager Manager Manager

HR Purchasing
Supervimr Supervimr

6. The purchasing supervisor reports directly 7 Which of the following positions would be
to the
BEST suited at'X'?
(A) CEO (A) ChiefAdvisor
(B) HR supervisor (B) Board of Directors
(c) finance manager (C) Managing Director
(D) production manager (D) Human Resource Manager

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-4-

Item 8 refers to the following information. 11 Under which of the following categories
would subsidizedmeals foremployees fall?'
Mr Lloyd, manager of LM Ltd, holds
regular staff meetings to listen to ideas (A) Fringe benefits
from employees before making decisions (B) Duty allowance
thatwould affect the future ofthe company' (C) Wages and salaries
(D) Workmen's comPensation

8. What leadership style does Mr Lloyd

employ? ' t2 Wiich ofthe following is NOT an example
of collateral?
(A) Autocratic
(B) Charismatic (A) Bond
(c) Democratic (B) Stock
(D) Laissez faire (c) Properly
(D) Money order

9 Management information system (MIS) is

defined as the 13. Which of the following individuals benefit
from having 'limited liability status'?
(A) use of computer technologY to
gather information for use in (A) Franchisees
making decisions within an (B) Shareholders
organization (c) Ordinary partners
(B) technologicalbenefitsgainedbyan (D) Debenture holders
organization for being Part ofa
well organized industry
(C) use ,of various factors within a t4 The condensed version ofthE business plan
i

business to reduce costs and is contained in the j

increase Profits I

(D) managementproc-qssresponsible (A) feasibility plan

for identifYing; anticiPating (B) marketing plan
and satisfYing consu'mer (c) keynote srunmary
requirements at a Profit (D) executive summaryl

10. Which of the following organizations 15. JB Auto Company decided to export car
is LEAST likely to use a managenient engines from Barbados to Trinidad. Which
information system? of the following methods is BEST for
transporting the engines?
(A) The national bank
(B) A shoeshine shoP (A) Air
(C) A department store (B) Sea
(D) A beauty suPPlies outlet (c) Rail
(D) Road

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-5-

16. Cash irsed to secure a loan at the bani< is 2l- The term 'human resources'refers to
referred to as
(A) materialc and goods made by human
(A) collateral beings
(B) fixed assets (B) capital invested by shareholders in
(c) current assets a company
(D) fixed deposits (c) raw materials used in ' the
manufacture of goods
(D) persons available for productive
17. A'purchase order'is a and professional services

(A) request for additional goods

(B) notification of goods received 22: Which of the following types of capital
(C) statement of outstanding debts is used for the day-to-day operations of a
(D) ; document offe-ring to buy goods business?

(A) ' Fixed

18. A contract may be discharged by (B) Floating
(C) i Working
("; breach (D) Nominal
(B) change of mind
(c) inconsideration
(D) misappropriation 23 To which of the following industries does
a firm involved in food processing belong?

'19 Kiki sustained bu:rs while at work at a (A) Service

local ,fast food restaurant. Under which (B) Extractive
of the following insurance policies is she (c) Constructive
MOST likely to be compensated? (D) Manufacturing

(A) Public liability

(B) Fidelity guarantee 24. What impact would the introduction of
(C) Property guarantee mechanization in the production process
(D) Employers'liability have on a society?

(A) Reduction in jobs for unskilled

20. The monthly payments made to an workers
insurance company by its policy holders (B) Increased brain dtain in the
are known as economy
(c) Reduction in the pollution of the
(A) deposits countr5r's cities
(B) premiums (D) Provision of morejobs for unskilled
(c) instalments workers
(D) endowments

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-6-

25. Which of the following conditions would 29 The term 'loss leader'is BEST described as
constitute a linkage between two industries? a product which

(A) TWo firms manufacture similar (A) has no real market value
goods. (B) the retailer is unable to locate
(B) One firm shares the use of (C) the retailer gives away to customers
machinery with another firm. (D) is sold cheaplyto attract customers
(c) Two firms are responsible for the
manufacture of different kinds
ofioods. . 30. Market equilibrium exists when
(D) The output of one industry of the
economy becomes the input of (A) buyers pay reasonable prices for
another industry. goods
(B) sellers are satisfied with the prices
paid for their goods
26 Which of the following businesses may (c) at current prices, the amount buyers
BEST be classified as a cottage industy? wish to buy equals the amount
sellers want to sell
(A) JMN Superstore, located in the rural (D) at the ruling market price, buyers
area do not want to add to the stock
(B) People's Cooperative Bank, located ofgoods they already have
in Trinidad
(c) Mary's Craft Supplies, located at
home 31. A situation whereby a business gains
(D) Peter and John's Company, located editorial space without having to pay for
in Jamaica it is called

(A) publicity
27 In the Caribbean, many people are hired (B) marketing
for sugar cane farming and very little (c) advertising
equipmentis used. This indultry canBEST (D) discounting
be described as t

(A) labour intensive 32. In a Caribbean territory, there is only one

(B) capital intensive supplier that provides electricity to all
(c) having low capital input homes, businesses and communities. What
(D) having high capital input market structure does this BEST illustrate?

(A) Duopoly
28. Which of the following terms describes (B) Oligopoly
a market consisting of a large number of (C) Monopoly
producers and consumers? (D) Perfect competition

(A) Oligopoly
(B) Monopoly
(C) Perfect market
(D) Imperfect market

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-7-

33 Which of the following gives identity to a 3& Which of the following services is provided
specific producer's goods? by commercial banks?

(A) Label (A) Printingloney

(B) Patent (B) Selling stocks and bonds
(C) Brand (C) Controlling the supply of money
(D) Copyright (D) Accepting deposits from customers

34. Which of the following operations is an 39. One of the MAIOR functions of a Cenhal
example of sziles:promotion?

(A) : Warehousing (A) issue notes and coins

(B) Free sa:rrpling (B) , issue stocks and shares
(C) , Servicing goods (c) accept deposit accounts
(D) Gathering infoimation (D) ; make loans and adyances

35. Mr Jones has several bills offixed amounts 40. A stock market is identified with
to pay each month. Mr Jones made an
arrangement with his bank to make these (A) , costs and prices
monthly payments from his account. This (B) risks and benefits
service, provided by the banlq is referred (C) i rent and investment
to as (D) ;premium and reward

(A) an overdraft
(B) a fixed deposit 4t Govemments can influence business activity
(C) a standing order positively by reducing
(D) a letter of credit
(A) taxes
(B) grants
36. Tom invests his savings by buying shares (c) subsidies
in a company. From this investrnent, Tom (D) expenditure
expects to receive

(A) profits 42. A'price control'may be defined as a

(B) interest
(c) revenue (A) tax on goods and serwices
(D) dividends (B) government ban on imports
(C) grant given to producers to reduce
their prices
37. Investnent can be defined as (D) government limit on the price of
goods or serices
(A) the stock of goods in a country
(B) the amount of money available at
a given time
(c) additions to the capital stock of a
country
(D) the amount of capital owned by the
govemment

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43. The success of a govemment's economic 47 Which of the following measures are used
policies can be MOSTeffectively measured by govenrments to redistribute income?'
by
(A) Custom duties and levies
(A) an increase in the level of policies (B) Consumption tax and tariffs
(B) an increase in the standard of (C) PAYE and National Insurance
Iiving (D) Excise duties and value added tax
(c) a decrease in the level of
employment
(D) a decrease in the volume of 48. Acountyhas a favourable balance oftrade
production when

(A) it sells more than it buys

44. Which ofthe following forms oftaxation can (B) it buys more than it sells
be classified as 'direct'? (c) imported goods are cheaper
(D) there are no restrictions to trade
(A) Income tax
(B) Excise duty
(c) Purchase tax 49 Which ofthe following practices would NOT
(D) Customs duty contribute to the economic development
and growth of a county?

45. Which of the following is a function of a (A) Provision of loans and technical
Chamber of Commerce?
assistance for establishing local
businesses
(A) Creating employment (B) Provision of more infrastructure
(B) Protecting the entironment within the country
(c) Assisting in securing markets for (C) Increased use of the country,s
producers j
natural resources
(D) Providing financidl aid to hurricane (D) lncreasedimportationofconsumer
victims i goods
i

ii
46. Which of the following s[atements BEST 50 Education contributes to a country,s
explains a 'proportional tai,? economic growth by ensuring that the
workforce is highly
(A) The rate of tax increases as income
increases. i (A) mobile
(B) The same rate of tax is paid at all (sl efficient
inc6me levels. (c) classified
(c) High income eamers pay a smaller (D) structured
percentage of income in tax than
low income eamers.
(D) High income eamers pay a larger
percentage of income in tax than
low income earners.

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i
-9-
I
I

51. Whilh of the following types of

I
55 The term 'economic dualism' defines an
restrictions limits the quantity of goods economy in which one sector is
that ditizens of a country are allowed to .O

buy fiom overseas? (A) highly dependent on local capital

i (B) highlydependentonforeigncapital
(A) i Import duty (C) overpopulated while the other is
(B) i Export duty underpopulated
(c) Export quota (D) technologicallyadvancedwhilethe
(D) Import quota other is technologically retarded

52 licences are issued MAINLY to 56. The purpose of CARICOM is to

(A) encourage local businesses to (A) allow member states to collaborate

produce more goods for export
(B) indicate to the importing countrY
the price at which the goods are
to be sold
(c) indicate to the importing country
that the goods are of a high
standard
(D) enable the government to control
the flow of goods being exported
(B) , encourage the transfer of tech-
. I nology within the region
(C) foster interregional trade and
common services
(D) allow forthe unrestricted movement
of persons among the territories
s7 Which of the following terms defines a
continirous rise in the general level ofprices?

53. The buying and selling of goods and (A) Inflation

senrices among counffies is called (B) Reflation
(c) Deflation
(A) balance oftrade (D) Depression
(B) international trade
(c) balance of payment
(D) international marketing 58. In periods of inflation, the ability to raise
additional capital for expansion is MOST
i likely to be a problem for
54. Which of the following is NOT a benefit
of international trade? (A) partnerships
(B) sole traders
(A) Producers are able to increase their (C) public companies
market size. (D) multinational corporations
(B) Political links are developed with
other countries.
(c) Lnportrestrictions can be imposed
on foreign items.
(D) A greater variety of goods is
obtained from overseas.

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59 Which of the following is NOT a benefit 60. Which ofthe followingorganizations would
of industrialization? settle a dispute among banana-producing
countries of the Caribbean and Cenfral
(A) Areduction in the level of imports America over preferential agreement with
(B) An increase in the level of exports the European Union?
(c) An increase in the unemployment
rate (A) WorldTradeOrganiz,ation(WfO)
(D) A decrease in the unemployment (B) Caribbean Development Bank
rate (cDB)
(C) CARICOM Single Market and
' Economy (CSME)
(D) Organization of Petroleum
Exporting Countries (OPEC)

END OF TEST

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