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1. Q1 In economic theory, which of the following statements best describes what is available and what is
wanted? (2 marks)
A. Time and motion
B. Supply and demand
C. Research and development
D. Input and output
Answer: B
2. Q2 Which of the following relationships best describes a small change in demand as a result of a large
change in price? (2 marks)
A. Inelastic
B. Explicit
C. Implicit
D. Elastic
Answer: A
3. Q3 Which of the following best describes the pricing policy known as 'promotional pricing' ?(2 marks)
A. A high price aimed at quick recovery of costs
B. A price in line with that being charged by competitors
C. A temporary price reduction to increase sales in the short term
D. A low price set to gain a large share of the market.
Answer: C
4. Q4 Which of the following is the most likely consequence of government decreasing interest rates? (2
marks)
A. People spend more
B. People spend less
C. The economy slows down
D. The cost of borrowing goes up
Answer: A
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5. Q5 Which of the following best defines the economic term 'budget surplus'?(2 marks)
A. Government expenditure equalling government revenue
B. Government revenues creating government expenditure
C. Government expenditure exceeding government revenue
D. Government revenue exceeding government expenditure
Answer: D
6. Q6 Which of the following best describes the '4Ps' of marketin (2 marks)
A. Promotion, Performance, Price, Place
B. Product, Price, Promotion, Place
C. Price, Placement, Product, Place
D. Performance, Product, Planning, Production
Answer: B
7. Q7 Which of the following describes people leaving one job and moving to another?(2 marks)
A. Structural unemployment
B. Frictional unemployment
C. Migrational unemployment
D. Cyclical unemployment
Answer: D
8. Q8 Which of the following best defines the term 'monetary policy'? (2 marks)
A. The control of taxation
B. The control over the amount of money in circulation and the cost of borrowing
C. The control of numbers of people unemployed compared to those employed
D. The control of wealth distribution
Answer: B
9. Q9 Which of the following best defines the term 'equilibrium price'?(2 marks)
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A. The price at which the level of demand in a market exceeds the level of supply
B. The price at which all commodities are of equal value in a market
C. The price at which the level of supply in a market exceeds the level of demand
D. The price at which the level of supply in a market matches the level of demand.
Answer: D
10. Q10 Which of the following is a category of economic system? (2 marks)
A. Thriving economy
B. Balanced economy
C. Planned economy
D. Declining economy
Answer: C
11. Q1 Which of the following statements is correct about the relationship between supply and demand?
(2 marks)
A. When the price of a product is high, the quantity demanded will be high and the quantity supplied will be
low
B. When the price of a product is low, the quantity demanded will be low and the quantity supplied will be
high
C. When the price of a product is high, the quantity demanded will be low and suppliers will be more willing
to supply products
D. When the price of a product is low, the quantity demanded will be high and suppliers will be less willing to
supply products.
Answer: C
12. Q2 Which of the following best defines the term 'Exchange rate'?(2 marks)
A. The amount of business transacted between one country and another during a year
B. The speed with which a company receives payment for goods or services sold
C. The extent of barter transactions in a particular country
D. The value of one country??Oscurrency measured against that of another.
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Answer: D
13. Q3. Which of the following types of unemployment describes people leaving one job and moving to
another? (2 marks)
A. Cyclical
B. Frictional
C. Moving
D. Structural
Answer: A
14. Q4 Which of the following headings would appear in the current account of a country's alance
of payments? (2 marks)
A. Transactions in goods and services
B. Transactions in external assets and liabilities
C. Transactions in large sums of money
D. Transactions in stocks and shares
Answer: A
15. Q5 Which of the following best describes the pricing policy known as 'penetation' pricing? (2 marks)
A. A price in line with that being charged by competitors
B. A high price aimed at a quick recovery of costs
C. A low price set to gain a large share of the market
D. A temporary price reduction to increase sales in the short-term
Answer: C
16. Q6 'Fiscal' poicy is government policy controlling which of the following? (2 marks)
A. Inflation
B. Unemployment
C. Taxation
D. Wages
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Answer: C
17. Q7 Which of the following best describes the economic term 'budget deficit'? (2 marks)
A. Government revenues exceeding government expenditure
B. Government expenditure equalling government revenue
C. Government revenues creating government expenditure
D. Government expenditure exceeding government revenue
Answer: D
18. Q8 Which of the following promotional methods can be described as 'below the line'?(2 marks)
A. Radio commercials
B. Sales leaflets and brochures
C. Internet banners
D. Cinema advertising
Answer: B
19. Q9 A 'balance of payments' is the record of which of the following during a year? (2 marks)
A. A country's moneary import and export transactions
B. Exchange rate movements
C. All payments made by a government department
D. All revenue from taxes received by a government
Answer: A
20. Q10 A PEST analysis is conducted on which of the following environments of a company? (2
marks)
A. External
B. Internal
C. Historical
D. Political
Answer: A
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21. Q1. Which of the following best describes the effect of a country's currency dropping in value
compared to other currencies?
A. It will make it less expensive for firms to buy goods from abroad and lead to lower domestic costs and
prices
B. It will make domestic goods less attractive to foreign buyers in the short term and reduce exports
C. It will increase profit margins for companies involved in goods selling in the domestic market
D. It will make it more expensive for firms to buy goods from abroad and lead to higher domestic costs and
prices.
22. Q2. Which of the following best describes 'below the line' promotion?
A. Providing free gifts to remind potential customers of the selle'rs organisation
B. Methods of securing a buyer's loyalty to a seller, which are potentially illegal, for example, bribery
C. Advertising which targets specific types of buyer, for example, advertising in a particular trade magazine
D. Advertising at global sporting events so that advertising in individual countries is not required.
23. Q3. Which of the following describes a critical part of the 'marketing mix'?
A. The payment of an invoice
B. The production process
C. The promotion of a product
D. The presentation of the plan.
24. Q4. Which of the following is an important concept in economic theory?
A. PEST analysis
B. Product life cycle
C. Profit maximisation
D. Sampson's concept.
25. Q5. Which of the following best describes the pricing policy known as 'penetration pricing'?
A. A price in line with that being charged by competitors
B. A high price aimed at a quick recovery of costs
C. A low price set to gain a large share of the market
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D. A temporary price reduction to increase sales or 'ward off ' competition.
26. Q6. Which of the following best describes the concept of exchange rates?
A. The amount of business transacted between one country and another during a year
B. The speed with which a company receives payment for goods or services sold
C. The ability of a country to take advantage of currency differences
D. The value of one country's currency measured against that of another.
27. Q7. Which of the following best describes the effect of inflation.
A. Too many people chasing too many goods
B. Too few people chasing too few goods
C. Too many people chasing too few goods
D. Too few people chasing too many goods.
28. Q8. Which of the following best describes 'balance of payments'?
A. The record of a country's monetary import and export transactions during a year
B. The record of exchange rate movements during a year
C. The record of all payments made by a government department during a year
D. The record of all revenue from taxes received by a government during a year.
29. Q9. According to economic theory, which of the following best describes what should happen to the
sales of a product if the government increases the tax on them?
A. The sales increase
B. The sales decrease
C. The sales remain the same
D. The sales double.
30. Q10. Which of the following best describes 'fiscal policy'?
A. The control of inflation
B. The control of unemployment
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C. The control of taxation
D. The control of wages.
31. Q1. Which of the following best describes the pricing policy known as 'skimming'?
A. A low price set to gain a large share of the market or to gain acceptance for a new product
B. A high price aimed at a quick recovery of costs where a product is new and is an innovation
C. Charging different prices to different customers based on order size or type of customer
D. A temporary price reduction aimed at increasing sales in the short-term and increasing long-term
market-share.
32. Q2. Which of the following best describes a 'factor market'?
A. A market where money is provided to help organisations to grow
B. A market where goods and services are sold to customers
C. A market where labour, raw materials and capital are bought and sold
D. A market where advice and consultancy services are bought and sold.
33. Q3. Which of the following best describes 'exchange rates'?
A. The value of one country??s currency measured against that of another
B. The amount of business transacted between one country and another
C. The extent of barter transactions in a particular economy
D. The speed with which a company receives payment for goods or services it has sold.
34. Q5. Which of the following best describes the term 'monetary policy'?
A. The government controlling economic activity by regulating the level of taxation
B. The government controlling economic activity by influencing public service provision
C. The government controlling economic activity by influencing the rate of interest
D. The government controlling economic activity by regulating monopolies.
35. Q6. Which of the following best describes the term 'structural unemployment'?
A. Unemployment created as demand for workers varies at different times of the year
B. Unemployment created by a significant change in the nature of industries
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