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CIMA CIMAPRA17-BA1-1 Exam Questions
BA1 - Fundamentals of Business Economics (Page 10 )

Updated On: 16-Feb-2026
Page 10 of 95
PDF with 468 Questions

Which of the following statements about macroeconomic policy objectives is correct?

  1. Governments always regard control of inflation as the most important policy objective
  2. Conflicts between objectives mean that macroeconomic policy can never be regarded as successful
  3. Expanding demand to reduce unemployment may mean that the balance of payments worsens
  4. The pursuit of economic growth inevitably increases unemployment

Answer(s): C



The existence of a natural rate of unemployment means that

  1. the short run Phillips curve is steeper that the long run Phillips curve.
  2. nominal wages rise faster the prices in the long run.
  3. governments cannot reduce unemployment below this level.
  4. there is no trade-off between inflation and unemployment in the long run.

Answer(s): D



Which of the following is not likely to result from a fall in the rate of interest?

  1. Increased consumption
  2. Increased investment
  3. A higher exchange rate
  4. An increase in aggregate demand

Answer(s): C



When the economy is in recession, which of the following is least likely to reduce unemployment?

  1. An expansionary fiscal policy
  2. The central bank cutting interest rates
  3. Retraining schemes for redundant workers
  4. A regulation extending employment rights for newly-hired workers

Answer(s): D



Select the best definition of a regressive tax from the options below:

  1. A tax which rises proportionately with income
  2. A tax which rises more than proportionately with income
  3. A tax which rises less than proportionately with income
  4. A tax on expenditure

Answer(s): C






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