res cope 01240010 “FORM TP 2012027 beeen eee JANUARY 202 CARIBBEAN EXAMINATIONS COUNCIL ‘SECONDARY EDUCATION CERTIFICATE. | EXAMINATION PRINCIPLES OF BUSINESS Paper 01 - General Proficiency 75 minutes ‘05 JANUARY 2012 (p.an.) READ THE FOLLOWING INSTRUCTIONS CAREFULLY. “Tals test consists of 60 items, You will have 75 minutes to answer ther. In addition to this test booklet, you should have an answer sheet. Fach item in this test has four suggested ansivers lettered (A), (B), (C), (D). Read each item {You are about 1 answer and decide which choice is best. (On your answer sheet, find the number which corresponds to your item and shade the spare ‘having the same letter asthe answer you have chosen. Look atthe saruple item below. Samplettem The money that a business recsives from the sale of goods or services i called its Sample Answer (a) ats @®0@o0 (capi (©) income (D) resources “The best answer to this item ie “income”, so answer space (C) has been shaded. {you want to change your answer, erase it completely before you fill in your new choice, ‘When you ate told to begin, tum the page and work as quickly and as carefully as you can, {you cannot answer an item, go on 1 the next one. You may return to this iter later. Your swore will be tye otal number of correct answers. {OT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO St Copyright © 2009 Caribbean Examinations Council “All sights reserved, sanvcenmnneenere: MlPrivate enterprise isrunMAINLY toy create profit reduce inflad {C) _plovide jobs for more people [D) distribute goods and services fairly ‘The type of business environment MOST typical of the Commonwealth Caribbean area is (A) conporate state mixed evovomy (©) centrally planned (D) perfectly competitive Ina public limited company, the losses are ‘bore by the’ (a) satt (directors community Which of the following is NOT a function of money? (A) ndivistitin Sacto (C) Measure of value (D) Medium of exchange ‘The policies of a company are formulated by the (a) auditors ®) —direotors § =o. [A MAJOR role of @ tnde union is to encourage \ (A) staff to become members of the (B) staff to strike whenever they have problems at work (C) management io pay higher salaries and give longer vacations to stait the advancement of the welfare of its members ‘Under which of the following categories ‘would subsidized meals foremployees fall? Q Fringe benefits Dury allowance (©) Wagesand salaries (D) Workmen's compensation ‘Management Information System (MIS) is defined as the (A) technological benefits gained. by ‘an organization for being part of __ well-organized indastry ®)_ use of technology to gather ~—Gnformation for use in making ‘decisions within an organization (©) use of various factors within & ‘business 10 reduce costs and increase profits (D) management process responsible for entifying, anticipating, and satisying consumersequirements staproit | ‘Torn invests his savings by buying shares in company. From this investment Tom expects to reveive (ay protis ) interest (C) revenue {P) dividends GOON TO THE NEXT PAGE10, u, 2 1B Selecting objectives and the procedures for achieving goals is refered to.as, (A) planning organizing. controlling (D) motivating One advantage of a Management Information System is that it tends to improve (A) product quality (B) employee relationships [C) contractual negotiations (DB) databasemaintenanceundmenitor. ing Anoverview ofabusiness planis contained inthe (A) feasiitity say (B) keynote summary (C) marketing steategy executive summary Which of the following CANNOT be used as collateral for obiaining a loan fora a ‘nancial insticution? 1A) Money in. fixed deposit account (B) Motor vehicle not coverarby insurance (C) An insurance policy with & cash value {D) Amongaged home wit insarance coverage “4 18, 16, a ‘The MOST important use of collateral security to the lender is that it (@ _ canbe sald ifthe borrower filsto py (®) _givesthebankeranidea ofthe state ‘of the business (©) establishes the financial posiionof the borrower (D) _improvesthe borrower's chanceot getting « foun _Anentrepreneur may reduce hisisk of loss y ° G®) plenning ahead (@) securing bank loans (©) sponsoring community projects {D) purchasing additional fixed assets ‘One of the MAIN functions of an entrepreneur isto (A) prepare the accounting records: (B)Skvecine the open produce Cnganize the factors of production DB Sane oe makeing of he company’s product ‘A post-dated cheque is one which Dicey fede fn rites oo ler Gaon ee Soe (©) is dated 0 agree with the date of the documeat requestingpavment (©) is dated by the bank's dae on the “day the cheque is presented for pasment19. 20. ry ‘Acortract may be discharged by 1 breach Jk, epee oftime MM, “fferand acceptance Ga) tend tony (B) and Tl only (©) Ward Ill only (D) Landi ‘Which ofthe following factors prevents an ‘agreement trom being considered a valid contract? (A) Considoraiion (B)_ Legal purpose Misrepresentation (D) Offer and acceptance Which of the following documents is required for importing goods on which there are qvota reetrictions on imports? (A) Bank draft (8) Bilofiading (©) imgortioence (OD) Billofexchange ‘The factor of production which earns interests (A) land () capital S(©) labour (D) enterprise . What is the MOST likely effect on a Aeveloping economy when professional and skilled labour migrate 10 developed countries? ; (A) Unskilled labourers can dgmand higher wages (B) Unskiiled labourers may work harder ((C)) Production levels of goods and “services will decrease. (D) The demand for skilled labour and ‘Professional serviceswill decrease. ‘The team ‘economies of scale’ means the (A) purchase of goods at low prices (B) reduction inthe size ofthe business (C) inerease in the size ofthe business (D) _reductionincossas ouput increases Whick of the following ig EAST likely to resalt from growth in an organization? (A) Greater productivity (B) Increased communication (©) Greater division of labour (D) Increased capital investment Subsistence production is BEST described a producing goods for (A) prone () export (©) local trate (D)) personal use & Primary production is concerned with the (A) disteibution of goods (B) manufacture of goods (©) ove ore meecias {D)__provisionof good: tomect essential needs” 28 29, a e ‘What type of capital is defined a8 money used for the day-to-day operations of business? (A) Fixed (8) Floating (©) Nominal (D) Working Which of the following market situations is typically found where there is a large ‘number of producers and consumers? (A) Oligopoly (B)— Monopaly. (©) Perfect market (B) Imperfect market Which of the following characteristics BEST descrives a competitive market? (A) Few sellers and many buyers (B) Difficult emry vo new markets (C) Imperfect consumer knowledge of prices 3) Production of almost identical goods ‘The tem oss Jeader is BEST des 2 product which (A) tus no seal market value (B) the retailer is unable w locate (©) issold cheaplyto attract customers, (D)theretiler givesawayto customers Whick of the following can be described ‘asa marketing activity? (A) Issuing bulletins on staff matters {B)) Distriburing the commedities to cutlets (©) Publicisingadvertisemenisfornew: stall (D) Ensuring that workers are given fringe benenis| 32, The price of an item is ueuslly high when the number of peeple wanting to buy itis (A) fewandthe quantity orsaleissmall (B) — fewandthe quantity forsaleislarge (©) large and the quantity for sale is large large and the quantity for sale is sell ©) 33. The PRIMARY finction of advertising i e (A) promote pablic rations (B) promote brand loyalty (©) sommuniate information (D)_ensire wider disrbation of goods 34, Which ofthe following is NOT function of the retailer? (A) Preparing goods forremle (B) Seine in small quantites 4€>) Providing a local supply of goods (Dy) Transporting goods to suitable "storage facilities 35. Investmentean be defined as (A) the stock of goods in country (B) additions to the capital sick of & ‘country (©) the amount of money available at ‘given time (P)theamount ofcapital owned by the ‘goverament31. ‘MrJoneshasseveral bills of fxedamounts 10 pay each month His bank manager agrcedto pay them monthly from Mr Jones" account. Thiscerviee, providedbythebark, refers to (A) overdrafts (B) acting trustees (©) eters of credit () stndingorders One of the MAJOR functions of Central Bank is to (A) sssuenotes and coins istue stocks and stares (©) acoegt deponit account's (D) make losne and advances Whichofthe fllowingareservivesprovided by commercial banks? 1. Contolling the supply of money TH. Offering toans 10 small businesses TIL. Accepting depositsfrom customers (A) Land only (B) Land iit only (©) Mand ti only (D) Mend ttt Which of the following can be referred to as & characteristic of the stock market? (A) Costsand prices (B) Risk and benefits (©) Inierest and profit (D) Premiums and investment Whichof tie fotlowingean hayetheirshares traded on the stock exchange? (A) Partners (B) Public companies (C)__ Private companies (DY Co-operative societies Item 41 refers to the table below. ‘Anaual Income § [¥ Tax Paid [8 Tax 20000] 20 4000) 0000] 20 200000. 80.000) 60. 48.000 a1. 2. a “4, Which ofthe following types oftaxation is illustrated in the table above? (A) Indirect (B) Regressive (©) Progressive () Proportional Which of the following is NOT regarded, asa role of wxation? (A) Raising revenue for government (B) Influencing the distribution of incomes and wealth (©) Influencing total expenditure on ‘woods and services (D) _Inflvencingtheinvestmertdecisions of publicly owned enterprises Which of the following measures ae used by govermentto redistribute income? (A) Customs dities and levies 8) Consumption ax and tariffs (©) FAYE and Nasional insurance () Excise dutios and vale added tax “The term ‘subsidies refers t© (A) grants given by government (i) taxes withheld by goverment (C) + loans given to small businesses (D) profits realised from investment GOON TO THE NEXT PAGE46. 47, 48 “Tax paid on wages and salaries is refemred () Income we (3) Exciseduyy (©) Custorns duty (©) Corporation tex “Tax paid on goods entering the country is referred i a (A) Income tax (BL Excise duty Customs duty (D) —Comporstion tax ‘Which of the following institutions is involved in protecting the consumer? (AQ Forestry Depastment GB) Bureau of Standards XC) Intemational Monetary Fund (ME) (D) Natural Resources Conservation ‘Authority (NRCA) Acourtryhasa fivourable balance of rade when (A) imports equal exports itsells morethan it buys (C) itbuys more than it sells (D) there ae no restrictions to trade Inflation ean BEST te described as (A) fluctuations in the general price level (B) — atallinthelevelofprices of goods ard services 4 goneval and sustained rise in the level of prices (D) changes in the level of prices of ‘goods and services 50 st. 32, ‘Whichofthefollowingpractices woudNOT contibuteto the economic develepmentand wowih of acommunity? (A) Increased importation ofvousumer ‘noods (B) Increased use of the country's natural resources (©) Provision of more infrastuctire within the country (D) Provision of loans and technicat assistance for establishing local businesses -Exucation contributes o economic growth bby enruring that the workforce is highly (A) mobile (B) efficient (© classified (D) structured Which of the following is NOT » benefit of interational trade? () _importrestrictionson foreign tens (B) The development of political links ‘ith other countries (©) Importation of s greater varity of gods (D) Increase in the marketsizeby ocel producers Which of the fotlowing factors contribute ‘oitprovingacountry’sstandardo living? 1 High per capita income Hl —ncreases in national income ML Foscign ownerstip of capital AY “Tana only @) Land U1 only (©) Wand ill only ©) anda tations Couneit154, To correct an adverse balance of payments Co 8. postion, agovemmect my (a) rece ores {B) increas exports {C) reduce income tax {D) increase the money supply $5. Whichofthefallovingtadingasreemerss 59 Js Berbedos promoting when it sells faite te Jamia? ones () GATT (©) NAFTA (©) caRicom ‘Whichofte fatlowing organizations would stile dispute amorg Banana proslng Gountres of the Carnbean ant Ceol ‘Aint ie oer preferential agzcomentin tbe European Union? 60, (A) World Trade Organization (| Caribbean Developmen! Bank {C) CARICOM Single Market ar Economy (©) Organization of Petroleum ‘Exporting Courres 157. Inperods of nasi, tne ability to rise sitions capital fr expansion is MOST likely to te sprobiew for (BD soe waders (B) —_paroesbins (©) _ public companies {(D) _fhultinatona! corporations DOF TEST Which of the follwing methods may a povernmert use toreduce unemployinent? wy (3) © o Increate in income tox ‘Detlation of the economy Employment levy on tims Inctean nterestraeson borowers Which of the following are MAJOR ‘economic problems facing many Caribbean, {unt today? 1 it m1, w @ © ©) High levels of unemployment ‘Agverse balance of payments {Lack of capital for iavestment and I and tf cnty Mand tt only ltaad Which of the following practices may » be MOST effective in solving the unemployment problem in developing ‘ountien with large labour free” wy @ © @ Tereased mechanization Inerease in vocations! taining proganmes Greater production throwzh increased labour Land it only Land if ony Mand ttf ony 1nd IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.