1. Which of the following is/are among the elements of fiscal policy?
- Government actions to raise or lower taxes
- Government actions to raise or lower the size of the money supply
- Government actions to raise or lower the amount it spends
2. Which TWO of the following statements are correct?
3. A government has adopted a contractionary fiscal policy. How would this typically affect businesses?
4. A government follows an expansionary monetary policy. How would this typically affect businesses?
5. As the economy booms and approaches the limits of productivity at a point in time, are the following statements a true or false description of the impact of this?
A. Increased inflation (higher sales prices and higher costs), difficulty in finding suitable candidates to fill roles and higher interest rates.
B. High export demand, increasing growth rates, high inflation and high interest rates.
C. Reducing inflation, falling demand, reducing investment, increasing unemployment.
D. Higher government spending, lower tax rates, high inflation and low unemployment.
6. The principal objectives of macroeconomic policy include which of the following?
- Full employment of resources
- Price stability
- Economic growth
- Balancing the government budget
7. Governments have a number of economic targets as part of their fiscal policy. Which of the following government actions relate predominantly to fiscal policy?
- Decreasing interest rates in order to stimulate consumer spending
- Reducing taxation while maintaining public spending
- Using official foreign currency reserves to buy the domestic currency
- Borrowing money from the capital markets and spending it on public works
8. Which of the following organisations is most likely to benefit from a period of high price inflation?
9. Indicate which of the following statements correctly describe the functions that financial intermediaries fulfil for customers and borrowers.
A. Maturity transformation
10. Which THREE of the following are key roles played by money markets?
11. Which THREE of the following are common roles of the treasury function within a firm?
12. Which of the following is a difference between primary and secondary capital markets?
13. What role would the money market have in a letter of credit arrangement?
14. KM plc, a company listed in the UK and Australia, decides to issue unsecured US dollar bonds in Australia. Which of the following is the correct definition for these bonds?
15. Rank the following from highest risk to lowest risk from the investor's perspective.
- Preference share
- Treasury bill
- Corporate bond
- Ordinary share
16. Are the following statements true or false?
A. Financial markets can be classified into exchange and over-the-counter markets
B. Capital market securities are assets for the seller but liabilities for the buyer
C. A secondary market is where securities are bought and sold by investors
17. Which of the following statements relating to money markets is/are true?
- Lending is for periods greater than one year.
- Lending is securitised.
- Borrowers are mainly small companies.
18. There are two main types of financial market: capital and money markets, and within each of these are primary and secondary markets. Which TWO of the following statements are true?
19. If the US dollar weakens against the pound sterling, will UK exporters and importers suffer or benefit?
20. If a government has a macroeconomic policy objective of expanding the overall level of economic activity, which TWO of the following measures would be consistent with such an objective?
21. Which of the following statements is correct?
22. Which of the following is least likely to be a reason for seeking a stock market listing?
23. Indicate, by clicking in the relevant boxes, whether the following statements are true or false.
A. A prospective merger would need to result in a company having a market share greater than 80% before it can be described as a monopoly
B. A government may intervene to weaken its country’s exchange rate in order to eliminate a balance of payments deficit
C. A relatively high rate of domestic inflation will lead to a strengthening currency
D. Government fiscal policy involves the management of interest rates X