Free CXC Principles of Business Paper 1 May/June 2016 past paper from 2016. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.
Answer keys are free on Caribbean AI. View the answers to every past-paper question at no cost - no payment needed - with step-by-step worked solutions and instant AI marking available on Premium.
CSEC Principles of Business Paper 1 May/June 2016 - Free CXC Past Paper with Answers
Free CXC Principles of Business Paper 1 May/June 2016 past paper from 2016. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.
Opening the interactive papers…
Every question from this paper as text. See the answers and worked solutions. Questions are the property of the Caribbean Examinations Council; Caribbean AI is not affiliated with CXC.
The term 'trade' refers to
the selling of goods and services on the stock market
the movement of immigrants from one country to another
any commercial activity involving the exchange of goods and services
the negotiation process between trade unions and management
Which of the following types of business environments is MOST typical of the Commonwealth Caribbean?
Corporate state
Mixed economy
Centrally planned
Perfectly competitive
A person who has the ability to seek out and undertake the risk of new business opportunities is referred to as
a producer
an inventor
a shareholder
an entrepreneur
In a public limited company, the losses are borne by the
staff
directors
community
shareholders
In which of the following types of economic systems does the government make all decisions?
Mixed
Capitalist
Command
Subsistence
Which of the following is NOT an activity in the planning process?
Setting goals
Establishing policies
Identifying resources
Delegating responsibility
Item 7 refers to the following information.
Mr Lloyd, manager of LM Ltd holds regular staff meetings to listen to ideas from employees before making decisions that would affect the future of the company.
What leadership style does Mr Lloyd employ?
Autocratic
Democratic
Charismatic
Laissez faire
Selecting the objectives and the procedures for achieving goals is referred to as
planning
organizing
controlling
motivating
Which of the following demonstrates the characteristics of a good leader? I. Inspiring workers II. Delegating responsibilities III. Making intelligent decisions
I and II only
I and III only
II and III only
I, II and III
Under which of the following categories would subsidized meals for employees fall?
Fringe benefits
Duty allowance
Wages and salaries
Workers' compensation
Which of the following activities carried out in a firm will NOT be under the supervision of the marketing manager?
Packaging
Purchasing
Advertising
Distributing
An entrepreneur who wants to maintain control of the business would be advised to register the business as a
partnership
sole trader
limited company
private limited company
Which of the following is a regulatory issue for the entrepreneur?
Using a credit card to transact business
Offering hire purchase options to customers
Paying national insurance to the government
Advertising the business locally and regionally
The MOST important use of collateral security to the lender is that it
establishes the financial position of the borrower
can be seized if the borrower fails to pay
improves the borrower's chance of getting a loan
gives the lender an idea of the state of the business
Which of the following is NOT an example of an unethical business practice?
Money laundering
Nonpayment of taxes
Misleading advertisements
Retrenching inefficient workers
A post-dated cheque is one which
was written no longer than six months ago
is dated to agree with the date of the document requesting payment
is dated for payment at a future date
is dated by the bank on the day the cheque is presented for payment
Which of the following reasons can be used for voiding a contract?
I. There was no consideration. II. There was no meeting of minds. III. The agreement was not in writing.
I and II only
I and III only
II and III only
I, II and III
A contract may be discharged by
breach
change of mind
inconsideration
misappropriation
Fred and his friends went to the cinema. On his way out Fred fell and was injured. What type of insurance would protect the owner of the cinema against claims made by Fred?
Industrial insurance
Public liability insurance
Fidelity guarantee policy
Employers' liability insurance
Which of the following types of cheques allows an individual to receive cash on demand?
Open
Crossed
Certified
Banker's
To which of the following industries does a firm involved in food processing belong?
Service
Extractive
Constructive
Manufacturing
Joseph has decided to leave his homeland of Jamaica to go to the USA in search of a better life. This movement is referred to as
brain drain
early migration
internal migration
external migration
Item 23 refers to the following information.
Mr Jones receives a job offer from a company in Barbados. In order to take up this new job, Mr Jones decides to leave his home country of Trinidad and move permanently to Barbados.
In Trinidad Mr Jones would be referred to as
a refugee
an emigrant
an immigrant
a travelling officer
One feature of capital intensive firms is that they
raise large amounts of capital
provide capital for other firms
use more machinery and less people
use more people and less machinery
Which of the following conditions would constitute a linkage between two industries?
Two firms manufacture similar goods.
One firm shares the use of machinery with another firm.
Two firms are responsible for the manufacture of different kinds of goods.
The output of one industry of the economy becomes the input of another industry.
Which of the following results is LEAST likely to occur from growth in an organization?
Greater productivity
More division of labour
Increased communication
Increased capital investment
Which of the following commodities is a product of the manufacturing industry?
Cars
Gold
Lumber
Houses
The term 'loss leader' is BEST described as a product which
has no real market value
the retailer is unable to locate
is sold cheaply to attract customers
the retailer gives away to customers
Under which of the following conditions is a trade discount used?
Bulk purchases
Prompt payment
Payment by cash
First-time buyers
Which of the following is NOT a terms of sale?
Cash
Credit
Shares
Hire purchase
Which of the following factors is LEAST likely to influence consumer behaviour?
Product price
Brand loyalty
Quality of goods
Place of residence
A situation where a business gains editorial space without having to pay for it is called
publicity
marketing
advertising
discounting
The price of an article is usually high when there is a
large quantity for sale and few people wanting to buy
small quantity for sale and few people wanting to buy
large quantity for sale and many people wanting to buy
small quantity for sale and many people wanting to buy
In a Caribbean territory there is only one supplier that provides electricity to all homes, businesses and communities. What market structure does this BEST illustrate?
Duopoly
Oligopoly
Monopoly
Perfect competition
Which of the following terms is associated with a stock market?
Costs and prices
Risks and benefits
Rent and investment
Premium and reward
Tom invests his savings by buying shares in a company. From this investment Tom expects to receive
profits
interest
revenue
dividends
Mr Jones has several bills of fixed amounts to pay each month. His bank agreed to pay them monthly from Mr Jones' account. This service, provided by the bank, is referred to as
an overdraft
a fixed deposit
a standing order
a letter of credit
One of the MAJOR functions of a Central Bank is to
issue notes and coins
issue stocks and shares
accept deposit accounts
make loans and advances
Items 39-40 refer to the following diagram which represents the market for pears. The original demand curve is DD. <diagram> y D 7 D S Price (S) 6 5 Z 4 3 2 1 D D x 0 1 2 3 4 5 6 7 8 Quantity of pears (000) </diagram>
Point Z on the diagram represents the
price
demand
equilibrium point
equilibrium quantity
The equilibrium price is
$0.00
$3.50
$4.00
$7.00
Which of the following measures may be used by government to protect consumers? I. Price controls II. Custom duties III. Provision of subsidies
I and II only
I and III only
II and III only
I, II and III
Governments can influence business activity positively by reducing
taxes
grants
spending
subsidies
Which of the following is NOT regarded as a role of taxation?
To raise revenue for governments
To influence the distribution of incomes and wealth
To influence the investment decisions of publicly owned enterprises
To influence total expenditure on goods and services
Which of the following actions by government is MOST likely to lead to an improvement in the standard of living?
Printing more money
Increasing the income tax rate
Abolishing taxes on low incomes
Giving tax incentives to businesses
Which of the following statements accurately describes taxation as a means of redistributing incomes?
The rich pay taxes and the poor do not.
Tax is used to distribute income more efficiently throughout the country.
Tax is used to spread income evenly between the higher and lower income earners.
The higher income earners are taxed at a higher rate to provide benefits to lower income earners.
Which of the following BEST explains a 'proportional tax'?
The rate of tax increases as income increases.
The same rate of tax is paid at all income levels.
Higher income earners pay a smaller percentage of income in tax than lower income earners.
Lower income earners pay a larger percentage of income in tax than higher income earners.
Item 47 refers to the following information which shows figures taken from a country's balance of payments accounts.
| Goods | Services | |
|---|---|---|
| Exports | $160 m | $300 m |
| Imports | $120 m | $140 m |
The country's balance of trade is
-$ 120 m
+$ 120 m
-$ 200 m
+$ 200 m
In calculating Net National Product, depreciation refers to the
increase in the price level
decrease in the price level
decrease in capital stock value
increase in capital stock value
Which of the following practices would contribute to the economic growth and development of a country?
Increased importation of consumer goods
Decreased use of the country's natural resources
Exporting skilled personnel to developed countries
Provision of loans and technical assistance for establishing local businesses
Export licences are issued MAINLY to
encourage local businesses to produce more goods for export
enable the government to control the flow of goods being exported
indicate to the importing country that the goods are of a high standard
indicate to the importing country the price at which the goods are to be sold
A measure which limits the quantity of goods that citizens of a country are allowed to buy from overseas is known as an
import duty
export duty
export quota
import quota
Which of the following does NOT contribute to an improved standard of living of a country?
An increase in capital goods
An increase in disposable income
An increase in the country's population
An increase in investment in technology
Which of the following is an example of tariffs?
Excise duties
Property taxes
Custom duties
Value added taxes
Visible trade examines the difference between a country's
imports and exports of goods only
imports and exports of services only
current account and capital account
output method and expenditure method
The term 'economic dualism' refers to an economy in which one sector is
highly dependent on local capital
highly dependent on foreign capital
overpopulated while the other is underpopulated
technologically advanced while the other is technologically retarded
Which of the following is a benefit of the CSME?
A common trade policy
Reduced cost of housing
Reduced cost of air travel
More equitable distribution of income
The purpose of CARICOM is to
allow member states to collaborate
foster interregional trade and common services
encourage the transfer of technology within the region
allow for unrestricted movement of persons among the territories
Which of the following organizations would settle a dispute among banana-producing countries of the Caribbean and Central America over preferential agreement with the European Union?
World Trade Organization (WTO)
Caribbean Development Bank (CDB)
CARICOM Single Market and Economy (CSME)
Organization of Petroleum Exporting Countries (OPEC)
In periods of inflation, the ability to raise additional capital for expansion is MOST likely to be a problem for
sole traders
partnerships
public companies
multi-national corporations
Industrialization is an important strategy in the fight against poverty. Which of the following is a benefit of an increase in the development of industries?
A reduction in the level of exports
A reduction in the level of imports
An increase in the level of migration
An increase in the rate of unemployment