1.

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Which of the following statements explain S. Inwhichofthefollowingsituationswouldthe ·,
why a barter system restricts exchange? ~vidualhavelimitedliability?

I. There must be a coincidence of (A)· Tom who has 200 shares in a com-
wants. pany that produces beer
II. Thecomrnoditiesusedarenothomo- (B) Alfred who is running a business of
gencous. his own
m. It is difficultto di vi de certain com- (C) Mary whoiscanyingonahairdress-
modities ' ing shopjointlywithhersister
IV. A rate of exchange must be deter- (D) Lucywhoownsaprivatesecretarial
mined. school

(A) I and II only

(B) III and IV only 6. In the Caribbean, many people are hired for
(C) l, llandlllonly sugar-cane farming and very little equipment
(D) I, Ill and IV only isused. This.industrycanBESTbedescribed
as
.
WhichoneofthefollowingisNOTafunction (A) lal>ourintensive
of money? (B) havinghighcapitalinput
(C) havinglowcapitalinput
(A) N,leasureofvalue (D) capitalintensive
(B) Medium ofexchange
(C) ind!Vistbility
(D) Storeofv~ue 7. Which ofthefollowingcharacteristics ofthe
sole trader type of. business is NOT
ldvantageoustothe owner?
3. Which of the. following categories would·
subsidisedlnealsforemployees fall under? . (A) Secrecy
(B) Unlimited liability
(A) · Wagesandsalaries (C) Lowoperational cost ·
(B) Wo~n'&COlllpensation (D) Ownership of all profits
(C) Dutyallowance
(D) Fringebenefits
8. Which of the following outcomes is LEAST
iikelytoresultfromgrowthinanorganization?
4. The type of business environment most
typicaloftheConunonw~thCaribbeanarea (A) Increased capital investment
is (B) Moredivisionoflabour
(C) Greaterproductivity
(A) CC:llpotatestate (D) Increased communication
(B) mixedeco\I~
(C) «ntrallyplanned
(D) perfectly.competitive

CSEC POB June 2006 r·i

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structure, · •, 13: Which ofthe following responsibilities must
Ii :;..;- '~ 9, In afirmwithlideparttnentalize<l
which· department J?erfortns the four duties be ass~ by .the management of a com-
listed beiow? pany?

L Receiving thegoodspurohased I. Maximising effidency and creating

II. Givingareportoftheqllalityofgoods surpluses
received IL Maintaininggoodcommunicationand
Ill. Applying the principles involved in human relations
costin,g goo\ls m. Producinggoodsofamarketablequal-
IV. K=ping.~ iiwentory ily
IV. Determining dividends to be paid to
(A) Finance shareholders
(B) Purchasing
(C) Stock control (A) Ionly
(D) f\iartceting (B) I and IV only
(C) I, II and IV only
(D) I, II, ID and IV

l<O. S<',iecting ol>j~tives and the procedures for

achieving goals is.referred t0as Item 14 refers to the graph below.

(A) . plannirlg
. (B) o.rganimng
(C)
(D)
oonlIOlling
motivating .
:i 80
c:l
70 L
y

60
.s.50
11. 'rhe manager:oLl»BC csnipany :has em· 40
·~ 30 '
~
b8"kedon~R$oringaschcci1cricket~amin 20 N
aOui~tciry'i'l'hecompanyis.fµlfillillg;··
:its' >. ' :'-':,:;\ ,, 2 4 6 8 10 12 14
Quantity in uriits
(A) soclalo]>ligation
(B) economic obligation
.. ' According to the information given in the
(C) ebligationtocustomers 14.
(D) obligation to maximise surpluses graph above, the equilibrium price in cents is

(A) 20
(B) 50
12. For employees to produce attheirm;iximum,
which ofthefollowing isimPQrWnt'Z .
(C) ro
{D) 80
I. Suitable workingc~l!~tions
n. Holidaywj~jJay ·
m. Goodhum"1trelatio~
IV. Creating surplus . '

(A) I and II only

(B) I andllI only
(C) ·nan<l,WonlY
(D) I~i an~.:W only
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15. a
An essential fea~ of vruid contracti$ that 18 .. UnQ«whichofthefollowingconditionscan
a contract be terminated 7
(A) the offer has been accepted by the
offereeeitherin writingororally. . I. Both parties agree to do so.
(B) .a counteroffer has been made by the II. · Onepartyloseshisjeb.
offeree to the offeror. III. The subject matter ceases tO exist.
(C) the offer is made in writing by the IV. The subject matteris illegal.
offeror.
{D) the offer has beencominunicated to (A) land II only
the offerce. (B) I and III only
(C) Ilandillonly
(D) lllandIVonly
16. Which of the foll~wing are func'ions ofman-
agcment?
19. 1bemoneyusedfortheday-to-dayoperalions
I. Co-ordinatingtheworkofemployees of a business is called
II. Delegating work to subordinates
m. Controlling employees and raw (A) fixed capital \
mat.erials (B) nominal capital ''
'
r- Il
IV. Ensuring thatemployeesjoin a trade (C) floalingcapital
wlion (D) working capital
'
(A) land II only • 'I'
(B) IIancfIDonly 20. Anincreaseintheproductivityoflalx>urinlhe I
I, II and m ~Iy Caribbean region means that
(C)
(D) II, III and IV only
j
( (A) thevalucofou!Put~manisgreater
(' than before.

I
17. Wbichofthefollowing'Situationswouldoccur (B) n.orefactorsofproductionareavail-
'ffa contract for the sale of goods becomes able forproduction.
void? (Q agreaternumberofthepopulationis I
.• now employed. i
1: Theprospectivebuyerbecomesthe !D) bothpopulatiClnandthevalueofout-
9wner. put are decreasing.
II. The prospective buyer does not be-
come the owner.
III. The seller has the right to keep any 21. A, Band C have dissolved the~partnership

.!"':'· ·money or goods which have been whichisworth$12000. Proceedsaredivided

given to him in this transaction.. intheration3 :2 :.1 respectively. How much
- IV. Thesellermustretumanymoneyor . dOeSBget'I •
"<'. goods given to him by the pros~-
tive buyer for the transaction. (A) $1500
(B) $3000 I
I
(A) land ill only '' (<;:) $4000
(B)
(C)
land IV only
II and III only
(I)) $6000 II'
(D) ·. UandIVonly .
;'

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·. ,, 2.i. ~ ~lll'.Ply oflabol;ll'.i~,ad.versely affected by 27,. Afirmexpandstoachieveinternaleconomies

''' of seal~ because it wantS to
(A) an increase in migration
(B) areductionin small scale operations (A) increase costs ofproduction
(<':) an inc~•inpopu\ation (B} increase worker's wages
(D) a reduction in the school-leaving age · (C) decrease the quantity" of goods it
produces
(D) decrease its costs per unit
23. The factor ofprodl.1.ction which earns interest
is
28. WhatistheMOSTlikelyeffectofasubstantial
(A) land increase in the duty on cars on the car-buying
(B) capital public?
(C) · labour
(p) enterprise (A} An increase in the use of public
transportation
(B) A decrease in car purchases
24. Which of the following is a fixed asset? (C} An increase in the number of car
pools
A decrease in the consumption of

--
(A) Bicycle for private use (D)
(B) Washing machine forresale gasolene
(C) Motorcarforfinuly use
(D) Vanfordeliveryofgoods
29. Which of the following practices does NOT
., .
'reswtfro,mmechaniziltion?
25. Whicbof:the.f"olla,vingproductiveactivities is
LEAST li~y tO ~ cGnductedon a large (A) Production is increased.
•
.scaleinth,e·~region? .~) . . , Goods are produl)ed to a standard
. ·pattern.
(C) · ·f'eaple ·may be ,needed for manual
work.
' ,(D) The specialist becomes more skilled
inhiswork.

30. Acilpilal·intensiveindustryischaracterized
26. The. location of an extractive industry is by
LEAST affected by
(A) large amounts ofcapital and very little
(A) proximity t() large sltoppi~g areas labour
{B) proximity to sources ofrawmaterials (B) large amountsoflabour and very little
(C) · availability of an abundant labour capital
supply (C) all capital and no labour
(P) ,~prese11cep{g0Qdf()adsanddrain- (D) capitalandlabourinthesamepropor-
age tion

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31. Whichofthefullowingactivitiescarriedoutin 36. Which ofthefollowing is NOT a function of

afirmwill NOT be 1mderthe supervision of the retailer?
themarketingmanager?
'(A) Sellinginsmallquantities
(A) Packaging (B) Providing a local supply ofgoods
(B} Advertising (C) Preparing goods for resale
(C) Distti"bution (D) Transporting goodstosuitable stor-
{D) PurchaSing age facilities

32. Allpersonscanbecalledconsumersbecause 37. A 'purchase order' is a

they
(A) statementofferingto buy goods I
(A) satisfythemsdves (B) notificationofgoodsreceived
(B) ha\t.....Wnts (C) statementofdebtsoutstanding
(C) U$0Soods (D) .requestforadditionalgoods
(D) buy goods

38. Which of the following documents would

33. The~RIMARY function ofadvertising is to have been used by a ship owner who agreed,
for a: sum of mortey, to provide a ship to
(A) . communicate information transportashipmentofcargofromoneportto
(B) prornotebrand loyalty anothe.:'?
(C) · ensurewiderdisttibution ofgoods •
(D) p.rotriotcpublicrelations (A) Import licenee
(B) BiUofladirtg · ..
(C) Charterparty. · ··
34. Which ofthefollowingpractices is LEAST (D} . AirwaybiH ,•;,
likelyto be described as good public relations
foracompatty? · ·· ' ·
39. A posH:lated ch.eque is one-which
(A) Theofferirtgofscholarships
(B) Reduction in price to retailers · . (A) wasV\'rittertnrilongerthansixmonths
{C) SportsorshipofaSteel band ago
(DJ Hostingofan anntial sport event (B) isdated bythe businessman to agree
with the date ofthe document re-
questingpaymertt
35. In whichofthefollowing types oftrade can (C) isdatedbythebankdatesontheday
the hire purchase methodofbuyingbeused? the cheque is presertted forpayment
(D) is dated for payment at a future date
(A) Wholesaletrade
(B) Importtrade
(C) Retailtrade 40. Ifanexparterquotes pricesCIF, it means that
(D) Foreign trade the

(A) exporter pays the freight

(B) importerpllysthefreight
(C) exporterpaysinsurance and freight
(D) · importerpaysinsuranceandfreight

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Forwhichofthi(Ollowingre<15onsisasmall.. 45. Acourttry willrestrictwpol:tationofcertain

·retmloutletabletosurvivede1>Pitecompeti- itemsinordertodowhichofthefollowing?
tion from large department stores?
I. Assist local industries.
L It sells goods at cheaper prices. II. Prevent similar items' from being
n. It buys goods at lower costs. consumed by its citizens.
m. Itbenefits from personal contact with ill. Encourageuse oflocalresources.
customer$. IV. Alterthelifestyleofitscitizens.
IV. It has lower overhead costs.
CA) ·. Ionly
(A) landllonly (B) I and III only
.(B) II and III only (C) II and Ill, only
(C) m·andIVonly (D) II and IV only
(D) IandIV only

46. When a high property tax is leviedin a country

42. One of the MAJOR functions of a central it is most likely to have all of the following
''ba;nkis to . effectsEXCEPTto

(A) ismenotesandcoins (A) reducethenumberofnewbuildings

(B) accopt4Cpositaccounts erected. ·
{C) mlikeloansaooadvances (B). encourage business firms to set up
(D). issue stocks and shares business·elsewhere
. (C) create ·additional revenue for the
· ,government
43. WbiChof.d\efollowingCANNOTbeusedas (D) entice citizens into buying more land
c0lta1etalf{')robtainingalpanfroniafinancial
institution?
47. Which of tb.e following is an example of
(A):· '' ·A'JiW~d home with i~tiranc~ . fudil"ec.tulxati®?
"coverage·
(B). M•insUranilepolicywith a cash value . (A) Consumption tax
(C) Anamountina.fixeddepositaccount (8) Incemectax
. •(I:)) ·1.;.¢ga11y owned propertynotcovered · {C) · Estate duty
by in8urance (t>) Water rate

44. . ·• ~'MQSTimportaniuseofoollateraisecurity 48. WhenaGovemmentsubsidizesacommodity,

tojfie lenderis that it it means Iii.at the Government

(A)''. c;::le solcl if the borrower fails to (A) Bas limited the importation of the
commodity.
. ~.) ,, ~!~:;t~fu!:~ani!~11ofthestare (B) has levied a ·purchase tax on the
.
conunodity.
' cq ~(aj)li~lt~~ibefirtan~ialpositionof (C) is helping to pay part of the produc-
. diel)O~ ·:er. .. tion cost ofthe,coinrnodity.
·'@:1)''; ilfii>K9\ltis hl-.; borrower's chance of (D) is encouraging the production of a
· · ,;etii~~·~io,~· . · substitute for the commodity.

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49. The price of an article is usually high when 53. · Which ofthe following practices wouldNOT I

there is a contribute to the economic development and

. growthofacommunity? I
(A) large quantity for sale and few people
wanting to buy (A) Incre~d use of the country's natu-
(B) small quantity for sale and few people ral resources
wanting to buy (B) Provision ofloans and technical as-
(C) small quantity for sale and many sistance for establishing local
people wanting to buy businesses
(D) large quantity for sale and many (C) Increased importation of consumer
people wanting to buy goods i
i~
(D) Provision of more infrastructure
".,l
fr
within the country
50. Marketequilibriumexists when
54. International trade owes its origin to
(A) buyers pay reasonable prices for
goods
(A) countries with large populations not
(B) sellers are satisfied with the price
havingsufficientgoods
paid.for their goods
(B) . the varying resources of different
(C) at the ruling market price, buyers do
regions
not want to add to the stock ofgoods
(C) thefact.thatci:luntries desired to have
they already have
greater contact with each other
(D) atcutrentprires, the amount ofgoods
(D) the grearneedfor foreign exchange 0
buyerswishtobuyequalsthe.amount
by rnostcountries .
sellers Want.to sell

55. A country has a favourable balance of trade

•
51. A 'market' in economic terms is defined as when

(A) a. place where tangible goods are (A) exports are higher in value Ulan
l:>ough[ and sold imports
(B) a·specif\c place where buyers and (B) imports are greater in value than
sellers meet exports
(C) a situation which exists when buyers (C) there are no restrictions to trade
and sellers influence the price of (D) importedgoods are cheaper
goods
(D) the businesscentre ofthe community
56. If a Caribbean country should.devalue its
currency, itisMOST!ikelythat
52. Which of the following market situations is
(A) its imports would become cheaper
typically found whe.re there is a large number
of produeers and consumers? andit$:exports would become more
expensive
(A) Perfect market (B) its . imports would become more
(Ii) . Irnperfettmlilfket expensive and its c:oxports would
(C) Oligqioty. becomel)heaper
(D) . Monopoly (C) both its hnports and exports would
become.more expensive
(D) both its imports and exports would
become cheaper ·

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The term 'economic dualism' defines 59. Which ONE of these methods may
economy in which one sector is govefome1ituse to ceduce unemployment'!

(A) highly dependent on foreign capital (A) Unemployment levy on firms

(B) overpopulated while the other is (B) Increases in income tax
underpopulated (C) Deflation of the economy
(C) technologically advanced while the (D) Increased. interest rares on borro\\-·er".'.>
otheris technologically retarded
(DJ highlydependenton local capital

I
60. Adverse Balance of Paymcrn problems can
be corrected by
58. Which ofthe following are MAJOR economic
problems facing many Caribbean countries I. tariffs
.I today? IL quotas
III. devaluatiou
I. High levels of unemployment IV. revaluation
II. Adverse_balanccofpayments
III. Low productivity infoanufacturing (A) I and II only
'IV. Lackofcapitalforirivestment (BJ II and III on! y
(CJ I, III and IV only
(A) I and II only (D) I, II and III only
(BJ II and III only
(CJ I, II and 1V only
(D) I, II, III, and IV ~ ,_ .

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