CPA Business Environment and Concepts (BEC) : Economic Concepts & Analysis
Study concepts, example questions & explanations for CPA Business Environment and Concepts (BEC)
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Example Questions
Example Question #196 : Cpa Business Environment And Concepts (Bec)
If the nominal interest rate is 10% and the rate of inflation is 5%, the real interest rate is:
50%
5%
15%
2%
5%
The real interest rate is equal to the nominal interest rate minus inflation.
Example Question #2 : Consumer Price Index
Under perfect or pure competition, ____ suppliers and customers act independently and there are ____ barriers to entry.
No, no
Plenty of, no
No, plenty of
Plenty of, plenty of
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:
Exchange rate velocity
Exports as a percentage of imports
World trade growth as a percentage of GDP
Shifts in global supply and demand curves
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:
A decrease in local firms' cost of capital
An increase in the correlation of emerging stock markets with world markets
A change in the volatility of emerging stock market returns
A decrease in investment growth rates
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:
Technological advancements including improved communications
Reduced transportation costs
Deregulation of international financial markets
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:
China
Brazil
Russia
Indonesia
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:
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 industrialized nations of the G6 will always lead the globe
Exchange rates are self regulating
Trade balances 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
The concept of balance of power anticipates that no one nation will dominate or interfere with the activities of others.
Example Question #14 : Economic Concepts & Analysis
Which of the following is not a factor that drives globalization?
Infrastructure and transportation improvements
Stronger currencies
Technological advancements
Deregulation of international financial markets
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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