UNIT-3
1 What is necessary for a company to be classified as a multi-national?
A It diversifies its range of products.
B It exports most of its output.
C It increases its scale of production.
D It produces some of its output in different countries.
2 In 2001 some countries, including India and Pakistan, criticised the European Union for
continuing to protect European farmers with a subsidy while expecting poorer African countries
not to restrict trade.
Identify the concepts that are not involved in this situation.
A Developing and developed economies
B free trade and protection
C market prices and official intervention
D multi-nationals and public corporations
3 A commercial bank is appointed to act as a country’s central bank. What new
function would it now have?
A controlling monetary policy
B dealing in foreign exchange
C ensuring security for loans
D holding liquid assets
4 Which trade union action is most likely to have harmful effects on the productivity of a firm?
A acceptance of new technology
B agreement to a bonus system
C opposition to planned redundancies
D participation in a profit-sharing scheme
5 Nazmin Uddin works in a local office as a secretary three days a week. She lives with her parents in
a small apartment.
Meer Ali owns a successful fitness centre that employs about twenty people and lives in a
large house.
Which is likely to be true?
A Nazmin spends a smaller proportion of her income than Meer.
B Nazmin saves most of her income.
C Nazmin would find it easier than Meer to borrow money.
D Nazmin has a lower disposable income than Meer.
6 Which of the following groups of workers is most likely to be successful in
obtaining a wage increase?
A Building workers during a period of bad weather
B computer operators when firms are installing new computers
C doctors when entrance qualifications to the profession are reduced
D farm workers as farming becomes more mechanised
7 There is an increase in interest rates.
What is the likely effect on saving and borrowing?
saving borrowing
A falls falls
B falls rises
C rises falls
D rises rises
8 What might increase the use of money as a medium of exchange?
A an increase in income tax
B an increase in interest rates
C an increase in savings
D an increase in specialisation
9 The following table gives information about four companies. Which one of these
companies is not a multi-national company?
number of countries in number of countries in number of countries in
company which the company has which the company has which the country sells
shareholders factories its products
A 2 1 100
B 1 2 50
C 10 20 20
D 20 5 1
10 In 2002 the trade union representing workers on the London Underground public transport
system called a strike.
Which condition would make a strike least likely to be successful?
A The demand has to be met at a certain time.
B The product or service is regarded as a necessity.
C The union represents a high percentage of the workforce.
D There is a wide range of alternative services
11 What is a function of a central bank?
A to decide government spending
B to determine all interest rates
C to issue new currency
D to lend to private businesses
12 Which company operates in the primary sector?
company description
A Century City Hong Kong holding company with property and
hotel interests
B Compass East Industries Thai ceiling fan manufacturer
C Delta Gold rapidly expanding Australian gold and platinum
mining company
D First Bangkok City Bank medium-sized commercial Thai bank
13 Which method of advertising would be the most cost-effective way of selling economics
textbooks to schools?
A commercial television
B daily newspapers
C direct mail
D local radio stations
14 The table shows how three people spend their income.
person X person Y person Z
food, clothing and housing 35% 50 % 20 %
entertainment and leisure 25% 20 % 40 %
luxury goods 40 % 30 % 40 %
Place the three people in the most likely order of income, from highest income to lowest income.
A X, Y, Z
B Y, Z, X
C Z, X, Y
D Z, Y, X
15 The table shows the weekly values of certain items for the average person in each
group. Which group saves the most on average?
income ($) spending ($) borrowing ($)
A employed workers 500 400 50
B retired people 150 140 0
C school students 25 30 5
D unemployed 200 300 100
16 Stock exchange is a market in which
A system of barter operates.
B the interest rate is fixed.
C the value of the exchange rate is determined.
D shares are bought and sold.
17 What is most likely to be the main function of a central bank?
A controlling the money supply
B investing in commerce and industry
C issuing and processing credit cards
D making loans to individuals
18 What would prevent an Egyptian company being classified as a multi-national company?
A It concentrates on one stage of production only.
B It employs only Egyptians as managers.
C It manufactures only in Egypt.
D It uses other firms to transport its goods.
19 What might explain why wages paid in a particular occupation are high?
A a large supply of labour
B a low price for the good produced
C a strong trade union
D pleasant working conditions
20 What is a non-wage factor that can affect an individual’s choice of occupation?
A bonuses
B commission
C long holidays
D overtime pay
21 Which statement about different income groups is true?
A High income groups do not need to borrow money.
B High income groups save less money than low income groups.
C Low income groups find it easier to borrow than high income groups.
D Low income groups save a smaller percentage of their income than high income groups
22 The table gives information about full-time workers in a country.
average annual earnings
hours worked
$ % increase in per week
2003–04
male 21 268 4.4 41.8
female 15 444 5.1 37.6
What can be concluded from the table?
A All female workers earned less than male workers.
B The difference between male and female earnings became smaller.
C The hourly rate of pay for females was higher than for males.
D The productivity of female workers was higher than that of males.
23 What is likely to be found when there are many small firms in an industry?
A There are few barriers to entry.
B There is high expenditure on research developments.
C There is not much competition.
D Very large capital costs are needed to establish a firm.
24 A student records her income and spending for the past month. What
function is money performing in this situation?
A medium of exchange
B standard of deferred payments
C store of value
D unit of account
25 A claim for higher wages by a trade union would not be helped by an
increase in
A consumers’ demand.
B Labour productivity.
C Profit.
D Unemployment.
26 What is meant by ‘the separation of ownership and control’ in business
organisations?
A increased control by the workforce
B government intervention in business organisations
C the employment of managers who are not shareholders
D the expansion of private enterprise
27 Which organisation controls the banking system in most countries?
A central bank
B commercial bank
C investment bank
D World Bank
28 Many countries have been extending the role of market forces in their
economies. What is intended to result from this action?
A greater economic efficiency
B greater equality of income
C less specialisation
D more government control
29 In 2000 the governments in a number of European countries had decided to
reduce the amount of gold held in their central banks.
What was likely to happen to the price of gold and the wages of gold miners as
a result of this decision?
wages of gold
price of gold miners
A fall fall
B fall rise
C rise fall
D rise rise
30 Which of the following factors is likely to cause wages in an occupation to be
low?
A extra
responsibility
B rising
unemployment
C the need for special skills
D unpleasant working conditions
31 On completing your studies, you decide you want to work in an organisation
which is big enough to give you a chance of promotion, but where shift work
will not normally be required.
Which of the following would be the best one to choose?
A a government
office
B a hairdressing
salon
C a hospital emergency
department
D a local electrician’s
32 Which worker is likely to have the highest wages?
A a hospital
doctor
B an office clerk
C a rubbish
collector
D a shop assistant
33 The table shows how employment in five industries changed in a country
between 1985 and
2002
1985 2000
(thousand) (thousand)
banking and finance 1336 1881
distribution and catering 3678 4323
extraction of minerals 1278 1094
manufacturing 3102 2128
transport 1550 1304
Which statement about these industries can be concluded from the table?
4 Output in the primary industries decreased.
6 Output in the tertiary industries increased.
5 Employment in the tertiary industries increased.
D Employment in the tertiary industries was less than the secondary industries.
34 Mr Lee bought shares in Intel, a computer company producing throughout the world.
Sandip Patel owns and runs a grocery store.
Which of the following is not represented by the above businesses?
18 co-operative
B multi-national company
C public company
D sole proprietor
35 In what circumstances are trade unions more likely to be effective in wage negotiations for their
members?
A an economic boom
B a recession
C a period of declining productivity
D a period of rising unemployment
36 What function do central banks and commercial banks have in common?
A acting as a banker's bank
B controlling monetary policy
C dealing with foreign exchange
D supervising the banking system
37 The table gives weekly earnings for different groups in 1998.
London Great Britain
male female male female
managers £779.30 £539.20 £625.60 £435.30
unskilled workers £381.90 £237.80 £332.90 £228.60
Which statement about the influence on earnings is supported by the table?
A Female workers gain more promotion than male workers.
B Female managers earn more than unskilled workers.
C Great Britain has a higher cost of living than London.
D Repetitive work is compensated for by higher incomes.
38 Which of the following government policies would lead to a more even distribution of income?
A allowing a balance of payments deficit
B a change in the rate of exchange
C control of lending by commercial banks
D expenditure on unemployment benefits
39 What is an advantage of specialisation in jobs?
A different ability is fully used.
B Jobs are repetitive.
C Production becomes dependent on several groups of workers.
D The possibility of unemployment increases due to automation.
40 Why do bank notes function as money?
A They are durable.
B They are generally acceptable.
C They count as legal tender.
D They have intrinsic value
42 What is usually a function of a trade union?
A It advertises the products that the members make.
B It appoints company employees.
C It negotiates with employers for increased wages.
D It negotiates with suppliers for reduced costs of materials.
43 To whom does the central bank usually make loans?
A individuals
B limited companies
C the government
D trade unions
44 When will a trade union be most effective in pursuing its members' interests?
A The economy is in recession with rising unemployment.
B The employers have few orders for the product.
C The government passes a law to increase competition in the labour market. D
The members' wages make up a small part of total costs.
45 What is likely to be the effect of a fall in interest rates on a consumer's borrowing and saving?
borrowing saving
A falls falls
B falls rises
C rises falls
D rises rises
46 What is most likely to cause the percentage of income saved in an economy to rise?
A a rise in consumer confidence
B a rise in direct taxation
C a rise in unemployment
D a rise in wage rates
47 A shopkeeper runs a business as a sole proprietor.
What does this mean?
A The business has limited liability.
B The business is owned by shareholders.
C The business is quoted on a stock exchange.
D The profits of the business go to the shopkeeper.
48 What is least likely to be a function of a trade union?
A improving working conditions
B reducing the cost of labour
C representing members' interests
D securing adequate pay for members
49 The table shows information about four financial institutions, A, B, C and D.
Which institution is most likely to be a commercial bank?
It is the government’s It is owned by
Bank. Shareholders.
A no no
B no yes
C yes no
D yes yes
50 Which reason can explain the high earnings of star footballers?
A There are many of them.
B The training is easy.
C They enjoy playing football.
D They have special skills
51 Which method of payment is a government official most likely to receive?
A commission
B hourly rates
C piece rates
D salary
52 Interest rates fall.
How might this affect consumers’ saving and spending?
saving spending
A fall fall
B fall rise
C rise fall
D rise rise
53 The table shows the percentages of consumer spending on different items in four countries,
which have similar geographical conditions and climate.
Which country is likely to have the highest standard of living?
percentage of consumer spending on each item
country
food housing entertainment
A 20 30 25
B 30 25 15
C 40 25 10
D 40 20 10
54 The table shows the main source of export earnings by product for selected countries.
country product % of export earnings
W diamonds 80 %
X sugar 90 %
Y cars 55 %
Z oil 80 %
From this table we can conclude that
A all these countries specialise in the production of primary products.
B W and X specialise in the production of tertiary products.
C the largest % of export earnings from Y is from the sale of secondary products.
D export earnings of W and Z are identical.
UNIT-3
