CPA Business Environment and Concepts (BEC) : Economic Concepts & Analysis
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Example Questions
Example Question #5 : Consumer Price Index
If the nominal interest rate is 10% and the rate of inflation is 5%, the real interest rate is:
50%
15%
5%
2%
5%
The real interest rate is equal to the nominal interest rate minus inflation.
Example Question #3 : Consumer Price Index
Under perfect or pure competition, ____ suppliers and customers act independently and there are ____ barriers to entry.
Plenty of, no
Plenty of, plenty of
No, plenty of
No, no
Plenty of, no
Under perfect or pure competition, plenty of suppliers and customers act independently and there are no barriers to entry.
Example Question #1 : Globalization
Globalization is often measured using the following metric:
Shifts in global supply and demand curves
Exports as a percentage of imports
Exchange rate velocity
World trade growth as a percentage of GDP
World trade growth as a percentage of GDP
Globalization represents the increased dispersion and integration of the world's economies. It is often measured as the growth in world trade as a percentage of GDP.
Example Question #11 : Economic Concepts & Analysis
Each of the following is an effect from opening markets to foreign investment except:
An increase in the correlation of emerging stock markets with world markets
A decrease in local firms' cost of capital
A decrease in investment growth rates
A change in the volatility of emerging stock market returns
A decrease in investment growth rates
Under this circumstance, investment growth rates will likely increase rather than decrease as there are more opportunities for investment and growth.
Example Question #12 : Economic Concepts & Analysis
Increased globalization is made possible by each of the listed factors except:
Deregulation of international financial markets
Technological advancements including improved communications
Reduced transportation costs
Regulation of currency values through the International Monetary Fund
Regulation of currency values through the International Monetary Fund
The IMF does not regulate currency values. Its activities are designed to stabilize exchange rates but it is not empowered to regulate currency values.
Example Question #4 : Globalization
All of the following nations are considered emerging nations except:
Indonesia
Russia
Brazil
China
Indonesia
The only other emerging nation not listed here is India.
Example Question #13 : Economic Concepts & Analysis
The concept of a global economic balance of power anticipates:
The industrialized nations of the G6 will always lead the globe
Trade balances are self regulating
Exchange rates are self regulating
A distribution of power and influence that ensures that no one nation or group of nations will dominate or interfere with the activities of others
A distribution of power and influence that ensures that no one nation or group of nations will dominate or interfere with the activities of others
The concept of balance of power anticipates that no one nation will dominate or interfere with the activities of others.
Example Question #4 : Globalization
Which of the following is not a factor that drives globalization?
Deregulation of international financial markets
Infrastructure and transportation improvements
Stronger currencies
Technological advancements
Stronger currencies
Stronger currencies have no impact on globalization, as currencies fluctuate all the time. These other factors would much more likely to facilitate international trade and global markets.
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