'Understanding changes in government policies is important to managers'. Why?
To escape from new policies.
To seek legal protection.
To plan to protect their organization from negative policy changes.
To reduce the increased cost on account of such policy changes.
Inferior goods' income-elasticity vary differently, how?
It is positive and between 0 and 1.
It is negative
It is positive and greater than 1
It is having zero elasticity.
For which category of goods the income elasticity is positive and greater than 1?
Normal goods
Necessary goods
Luxury goods
Inferior goods
During periods of inflation which category of people gain the most?
Creditors
Savers
Debtors
Shareholders
Name the account which records the value of trade in goods and services between one country and the rest of the world.
Capital account
Balance sheet
Unilateral account
Balance of payments
Which policy is concerned with decisions about government expenditure, tax rates and government borrowing?
Monetary policy
Fiscal policy
Trade policy
Expenditure policy
When do you call a Balance of Payment to be deficit?
When the value of goods and services imported exceeds the value of goods and services exported.
When the value of goods and services exported exceeds the value of goods and services imported.
When value of exports and imports are equal.
When there is difference in Capital inflows and outflows.
Exchange rates are determined by which factors?
Technology used in production
Comparative cost advantage of each country
Forces of demand and supply of currencies
The government plays a leading role in fixing exchange rates.
When there is a depreciation of currency who are considered as the winners?
Home based exporters
Importers of materials, components etc.
Retailers that purchase foreign supplies
Firms operating in Special Economic Zones.
During which phase of business cycle, the economy experience falling demand, higher interest rates, falling GDP, falling incomes etc?
Recession
Boom
Recovery
Slump
