6.
The relationship between the highest level of management and the various departments is known as
- (A)
flow
- (B)
rank
- (C)
staff
- (D)
line
Free CXC Principles of Business Paper 1 May/June 2026 past paper from 2026. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.
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CSEC Principles of Business Paper 1 May/June 2026 - Free CXC Past Paper with Answers
Free CXC Principles of Business Paper 1 May/June 2026 past paper from 2026. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.
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Which of the following types of business environments is MOST typical of the Commonwealth Caribbean?
Corporate state
Mixed economy
Centrally planned
Perfectly competitive
The policies of a company are usually formulated by the
auditors
directors
managers
shareholders
Which of the following departments is NOT a functional area of a business?
Finance
Production
Public relations
Human resources
Which of the following are advantages of a sole trader?
I. Shared profits II. Ease of set up III. Flexible working hours
I and II only
I and III only
II and III only
I, II and III
Which of the following is NOT an objective of the public sector?
Maximizing profits
Providing essential services
Regulating financial business activities
Promoting economic growth and development
The relationship between the highest level of management and the various departments is known as
flow
rank
staff
line
Under which of the following categories would subsidized meals for employees fall?
Fringe benefits
Duty allowance
Wages and salaries
Workers' compensation
The type of leadership described in the statement above is
democratic
participative
laissez faire
authoritarian
Selecting the objectives and the procedures for achieving goals is referred to as
planning
organizing
controlling
motivating
Which of the following statements BEST describes the function of a trade union?
Securing better wages and improved working conditions for its members
Calling strikes in order to gain wage increases for its members
Representing its members at the highest political level
Improving the standard of living of its members
The MAIN purpose of installing a suggestion box in a company is to get workers' views on
each other
other companies
ways of improving the workplace
ways of improving economic conditions
The person responsible for bringing together and organizing the factors of production is the
trade unionist
entrepreneur
manager
financier
The condensed version of the business plan, which provides an overview of the business, is contained in the
executive summary
keynote summary
feasibility study
marketing plan
An entrepreneur may reduce his risk of loss by
planning ahead
securing bank loans
sponsoring community projects
purchasing additional fixed assets
The MAIN advantage of collateral to the lender is that it
determines the financial position of the borrower
gives the lender an idea of the state of the business
improves the borrower's chance of getting a loan
can be seized if the borrower fails to pay
Which of the following is a regulatory requirement for an 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
Janice insured her house for $$100\ 000$ even though it was valued at $$200\ 000$. Her house was completely destroyed by a fire and she claimed $$100\ 000$ from the insurance company. However, the insurance company only compensated her $$50\ 000$. Which of the following insurance principles is illustrated in the case above?
Indemnity
Contribution
Average clause
Insurable interest
Kevin sustained burns while at work in a local restaurant. Under which of the following insurance policies is he likely to be compensated?
Public liability
Fidelity guarantee
Property guarantee
Employers' liability
Which of the following statements describes a speciality contract?
The contract can be made orally.
The contract need not be witnessed in writing.
The contract must be signed, sealed and delivered.
The contract needs consideration to be enforceable.
Which of the following documents should a supplier send to a retailer who has overpaid?
Debit note
Credit note
Requisition form
Proforma invoice
Which of the following industries could be classified as extractive?
I. Fishing II. Mining III. Forestry
I and II only
I and III only
II and III only
I, II and III
Which of the following natural resources is NOT available in the Caribbean in commercial quantities?
Oil
Coal
Lumber
Bauxite
Labour is BEST defined as the
physical and mental capabilities used to perform tasks
ability to carry out management functions effectively
level of skills training received by individuals who are working
total number of persons who hold jobs in government ministries
Which of the following activities is MOST likely undertaken in a cottage industry?
Building of boats
Bottling of soft drinks
Making of sugar cakes
Repairing of computers
Which of the following conditions would constitute a linkage between two industries?
Two industries manufacture similar goods.
One industry shares the use of machinery with another industry.
Two industries are responsible for the manufacture of different kinds of goods.
The output of one industry of the economy becomes the input of another industry.
A country is producing a commodity at subsistence level if
the cost of production is low
it produces just enough for local use
the quality of production is not very high
it produces enough for local use and export
Which of the following outcomes is LEAST likely to occur as a result of growth in an organization?
Greater productivity
More division of labour
Increased communication
Increased capital investment
In which of the following types of trade is the hire purchase method of buying MOST likely to be used?
Retail
Import
Foreign
Wholesale
"A business should utilize channels such as wholesale, retail or the internet, to make products available to consumers." Which of the following activities is BEST described in the statement above?
Distribution
Advertising
Market research
Sales promotion
Which of the following activities is an example of sales promotion?
Warehousing
Free sampling
Servicing goods
Gathering information
In marketing, a 'market' is BEST described as
the reason for the elimination of barter
a situation in which buyers and sellers interact
a place where various types of fruits and vegetables are sold
the management process responsible for satisfying consumers' demands
Which of the following terms signifies that an enterprise has been granted the sole right to produce or sell goods which it has invented?
Patent
Warranty
Copyright
Trademark
Which of the following factors is LEAST likely to influence consumer behaviour?
Product price
Brand loyalty
Quality of goods
Place of residence
Product, price, promotion and place are components of a
market study
marketing mix
market research
sales promotion
Which of the following is the final step in a supply chain operation?
Transformation of natural resources into finished products
Movement to and storage of raw materials in the warehouse
Processing of raw materials and components into finished goods
Delivering the finished product from point of origin to point of destination
Which of the following is NOT a major function of a retailer?
Preparing goods for resale
Selling goods in small quantities
Providing a local supply of goods
Transporting goods to suitable storage facilities
In business, logistics is defined as
managing data from conception, production and storage to retrieval
using all systems to move an idea from conception to production and then to sales
managing resources from the point of acquisition, storage and transportation to their final destination
formulating a business idea, systematically gathering data, then following through to production
A global positioning system (GPS) provides
firms with the capability to manage their inventories and reduce expenses
satellite tracking services that can be used in commercial and personal applications
saving options to firms by increasing the efficiency of their management information systems
simulation services to help designers avoid waste by creating models to assist manufacturers in making business decisions
Which of the following would be considered a producer?
A retailer who stocks furniture for resale
A woman who directs films and music videos
An accountant who does payroll for large companies
A soft drink manufacturer who sells his products on the local market
Which of the following documents details the name of the ship and full particulars of the shipment of goods?
Bill of sale
Bill of lading
Proforma invoice
Certificate of origin
Which of the following accounts is NOT offered by commercial banks to the public?
Trade account
Current account
Savings account
Fixed deposit account
Which of the following is a function of a chamber of commerce?
Creating employment
Protecting the environment
Assisting in securing markets for products
Providing financial aid to hurricane victims
One of the MAJOR functions of a central bank is to
issue notes and coins
issue stocks and shares
accept deposit accounts
give loans and advances
Which of the following characteristics are associated with the stock market?
Costs and prices
Risks and benefits
Rents and investments
Premiums and rewards
Mia would like to protect her passport, birth certificate and jewellery. Which of the following commercial bank services should she use?
Online banking
Safety deposit box
Night safe facilities
Automatic teller machine
Tom invests his savings by buying shares in a company. From this investment, Tom expects to receive
dividends
revenue
interest
profits
Which of the following CANNOT be used as a source of capital to set up a business?
Equity
Club dues
Personal savings
Government grants
Which of the following groups stand to benefit MOST from a stable level of prices?
Firms
Citizens
Employees
Consumers
Which of the following are examples of direct taxation?
I. Income tax II. Purchase tax III. Corporation tax
I and II only
I and III only
II and III only
I, II and III
Governments offer subsidies to businesses to
force them to pay corporation tax
increase costs and ultimately prices
reduce costs and ultimately prices
increase the prices of imported goods
Which of the following measures could be used to protect the environment?
I. Recycling II. Deforestation III. Water conservation
I and II only
I and III only
II and III only
I, II and III
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 higher and lower income earners.
Higher income earners are taxed at a higher rate so as to provide benefits to lower income earners.
A 'price control' may be defined as a
tax on goods and services
government ban on imports
grant given to producers to reduce their prices
government limit on the price of goods or services
Which of the following sequences represents the correct stages in the development of the CARICOM Single Market and Economy (CSME)?
In Trinidad, Mrs Brown would be referred to as
a refugee
an emigrant
an immigrant
a travelling officer
The gross domestic product (GDP) of a country is defined as the total
value of goods and services available in the country in a given period
income earned in the country less income payable outside the country
income earned in the country in a given period less capital consumption
value of goods and services produced by the country in a given period
Computer-aided design (CAD) can be advantageous to
production
distribution
market research
scientific calculations
The buying and selling of goods and services among countries is called
balance of trade
international trade
balance of payments
international marketing
One economic solution to unemployment in the Caribbean is to
export more goods
reduce the birth rate
nationalize industries
encourage entrepreneurship
Unemployment caused by a downturn in the economy is referred to as
cyclical
seasonal
frictional
structural