Online Access Free BA1 Practice Test

RST plc wishes to maximize its profits. At present it is producing where MC is less than MR. Which ONE of the following would NOT be good advice for RST plc?

• A.Cut fixed costs
• B.Advertise the product to increase demand
• C.Produce a higher output
• D.Reduce output

Central banks undertake all of the following roles except one. Which ONE is the exception?

• A.Oversight of the liquidity position of commercial banks
• B.The setting of interest rates
• C.Financing the government budget deficit
• D.Ensuring commercial banks meet minimum the capital adequacy requirements

All of the following are features of the process of globalization except which one?

• A.Increasing interdependence between economies.
• B.Higher levels of trade in components and semi-finished goods.
• C.Higher international disparities in rates of return on capital.
• D.Increased flows of factors of production between economies.

The ability of commercial banks to create credit would be reduced if:

• A.the required cash ratio was raised
• B.the central bank bought bonds from the banks
• C.interest rates were lowered
• D.their stock of cash assets increased

A commercial airline uses its database to develop the following regression model to predict the cost of a flight Y (in dollars) by number of passengers:
Y = 1,570 +40 7x
Which of the following statements is correct in relation to the airline'?

• A.The regression model makes accurate predictions for this commercial airline, therefore it will provide good forecasts for other commercial airlines.
• B.The cost of a flight will increase by $40.7 when an additional passenger is added to the flight.
• C.The positive intercept in the model indicates a positive relationship between the cost of a flight and the number of passengers.
• D.If each pair of data points is plotted on a graph with Y on the vertical axis and X on the horizontal axis, there will be a downward sloping line.