Free CIMAPRA17-BA1-1 Exam Braindumps
BA1 - Fundamentals of Business Economics Questions 206–210 (page: 43)

Updated On: 9-Feb-2026

A government can finance a budget deficit by:

  1. increasing taxation rates.
    ii. Reducing government expenditure.
    iii. Selling long term government bonds.
    iv. Issuing Treasury Bills.
  2. Raising interest rates.
    vi. Reducing transfer payments.
  3. (i), (ii) and (iii) only
  4. (ii), (v) and (vi) only
  5. (ii) and (vi) only
  6. (iii) and (iv) only

Answer(s): D



During recessions many governments borrow to give them funds to increase government expenditure on job creation schemes. They then repay the borrowed funds during the boom phase.
This is an example of which of the following?

  1. Aggregation
  2. Medium term borrowing
  3. Funding
  4. Open market operations

Answer(s): B



Which ONE of the following is NOT an example of a long term financial need?

  1. The financing of business investment
  2. The financing of house purchase through a mortgage
  3. Private saving to finance a pension
  4. The need for working capital in small businesses

Answer(s): D



Which of the following is not a source of long-term capital for a company?

  1. Retained profits
  2. Dividends
  3. Term loans
  4. Issuing corporate bonds

Answer(s): B



Every year a household allows its bank account to become overdrawn for 3 months to pay for its annual holiday.
Which one of the following statements correctly describes this?

  1. A short term lack of synchronization between payments and receipts
  2. Long term borrowing
  3. Medium term borrowing
  4. Maturity transformation

Answer(s): C



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