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+ AFFIX SEAi. llERE +

CANDIDATE - PLEASE NOTE!
You must sign below and return this booklet wilh

rg
1be Answer Sheet. Failure to do may wu11 in
di9quallfication. L
TEST CODE 000851
FORM TP 22151 Signature MAY/JUNE 2002

CARIBBEAN EXAMINATIONS COUNCIL

SECONDARY EDUCATION CERTIFICATE
EXAMINATION
PRINCIPLES OF BUSINESS

.i Paper 01 - General Proficiency

I J~ lio11rs
( '04 JUNE 2002 (p.m.) )

READ THE FOLLOWING DIRECTIONS CAREFULLY

I. In addilion to this test booklet, you should have an answer sheet.

2. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item you
are about to answer and decide which choice is best.

3. On your answer sheet, find the number which corresponds to your item and blacken the space
having the same letter as the answer you have chose'!. Look at the sample item below.

Sample Item
The money a business receives from the sale
-
of goods or services is called its Sample Answer
(A)
(B)
assets
capital
0®•@
(C) income

-
I
(D) resources

The best answer to this item is "income", so answer space (C) has been blackened.

4. If you want to change your answer, be sure to erase your old answer completely and fill in your
new ,choice.

5. When you are told to begi,n, turn the page and work as quickly and as carefully as you can. 1f you
cannot answer an item, omit it and go on to the next one. You can come back to the harder item
later. Your score will be the total number of correct answers.
.

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1. The fact that more than one type of eco- Item 5 refers to the following information.
nomic· system exists in the world today is
attributable MAINLY to the fact that A joint stock company issued ten thousand
$2,six percent shares at a premium of 12Y,
{A) there are numerous countries in the percent, all of which were fully subscribed·
world and duly paid up.
(B) people of different countries have
different religious and political 5. How much money will be recorded as
ideologies share capital?
(C) each system is modeled to cope
with a different type of economic (A) $10 000
problem (B) $20 000
(D) different methods can be used to (C) $21 200
solve the same economic problem (D) $22 500

2. Which of the following changes will NOT 6. Broad policies for Public and Private Com-
necessarily result from a decision to have panies in the Private Sector are formulated
employc;es specialize? by the

(A) Increased standardization of goods (A) shareholders.

(B) Improvement in the efficiency of (B) board of directors.
labour . (C) company secretary.
(C) Improvement in working conditions (D) managing director.
(D) Increased production

7. Which of the following can be regarded as a

3. Private enterprise is run MAINLY to benefit to Caribbean countries from the
estab Iishment of multinational corporations?
(A) create profit.
(B) reduce inflation. {A) Employment
(C) distribute goods and services fairly. {B) Repatriation of profits
(0) provide jobs for more people. {C)· Depletion of material resources
{D) Reduction of national ownership

4. A public limited company in the pri.vate

sector is normally established by 8. Which of the following are the financial
functions of a business organization?
(A) members of the public
(B) an act of parliament I. Payment
(C) a statutory meeting of the national I[. Budgeting of the business
Chamber of Commerce [[ [. Costing all activities
(D) registration under the Companies IV. Advertising its produce
Act
(A) I and II only
(B) I, II and Ill only
(C) I, Ill and IV only
(D) II, III and IV only

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9. Which of the following is LEAST likely to 13. Which of the following management prac-
result from growth in an organization? tices would contribute to the success of a
business?
(A) Increased capital investment
(B) More division of labour I. Pricing at maximum mark-up
(C) Greater productivity II. Paying attention to the quality of
(D) Increased communication goods or services sold
Ill. Communicating with employees
IV. Earning maximum profits for
10. A major role of a trade union is to encourage owners

(A) staff to strike whenever they have (A) I and II only

problems at work (B) II and Ill only
(B) management to pay higher salaries (C) II and IV only
and give longer vacations to staff (D) II, Ill and IV only
(C) advancement of the welfare of its
members
(D) staffto become members ofthe union 14. Whichofthefollowingresponsibilitiesmust
be assumed by the management of a com-
pany?
11. For employees to produce to their maxi-
mum which of the following is important? I. Maximising efficiency and creat-
ing surpluses
I. Suitable working conditions II. Maintaining good communication
II. Holiday with pay and human relations
Ill. Good human relationship III. Producing goods of a marketable
IV. Creating surplus quality
IV. Detennining dividends to be paid
(A) I and II only to shareholders
(B) I and Ill only
(C) II and IV only (A) I only
(D) Ill and IV only (8) l and IV only
(C)" I, II and IV only
(D) I, II, III and IV
12. Mr Gyma, the General Manager of Z Co.,
never discusses problems with workers or
listens to suggestions from his employees. 15. A laissez-faire leader can be described as
His leadership style can be described as one who
being
(A) is very constructive about what he
(A) authoritarian. does
(8) democratic. (B) listens to others and takes a reason-
(C) laissez-faire. able view of what is said
(D) bureaucratic. (C) stays in the background and allows
subordinates to make their own
decisions
(D) decides what to do despite what
others may think

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16. Ifthe opening stock figure was overstated 20. Which of the following practices may be
by $1500, the effect on the net profit figure MOST appropriate in solving the
would be unemployment problem in developing
cou"ntries where the labour force is large?
(A) a decrease of $3 000.
(B) an increase of $1 500. I. Greater production through increased
(C) a decrease of $1 500. labour
(D) an increase of $3 000. II. Increased mechanisation
III. Increase in vocational training
programmes
17. Which of the following contracts MUST IV. Increase in salaries
be evidenced in writing?
(A) !only
(A) Purchase of a bus-ticket (B) I and III only
(B) Purchase of a radio (C) II and III only
(C) Purcha5e of a lot of land (D) II and IV only
(D) Purchase of a car for cash

21. Wealth set aside for the production of fur-

18. IfAlbert fraudulently represents himself to ther wealth is termed
be John and induces Peter to make a con-
tract with him, the contract is (A) banking.
(B) commerce.
(A) void (C) capital.
(B) voidable (D) saving.
(C) ultra vires
(D) discharged
22. What is the MOST LIKELY effect on a
developing economy when professional and
19. Which of the following is an example of skilled labour migrate to developed coun-
extractive production? tries?

(A) Agriculture (A) Unskilled labourers can demand

(B) Communication higher wages.
(C) Manufacturing (B) The demand for skilled labour and
(D) Tourism professional services will decrease.
(C) U nski lied labourers can work harder.
(D) Production levels of goods and
services will decrease.

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Items. 23 - 24 refer to the following infor- 28. Which of the following practices does NOT
mation. result from mechanization?

For each phrase, select one heading which (A) Production is increased.
is MOST closely related to it. Each head- (B) Goods are produced to ··a standard
ing may be used once, more than once, or pattern.
not at all. (C) People may be needed for manual
work.
(A) Unemployment (D) The specialist becomes more
(B) Migration skilled in his work.
(C) Underemployment
(D) Brain drain
29. The advantages which a finn may achieve
by significantly increasing the size of its
23. The movement of educated, skilled people output are known as
to settle in other industrialised countries?
(A) effects of large scale production
(B) economies of scale
24. The holtling of jobs for which employees (C) risk-bearing economies
are overqualified? (D) economies of concentration

25. Which of the following is the simplest form 30. Which of the following describes capital-
of production? intensive industry?

(A) Subsistence (A) Large amounts of capital and very

(B) Domestic consumption little labour
(C) Surplus and export (B) Large amounts of labour and very
(D) Cottage industry little capital
(C) All capital and no labour
(D) Capital and labour in the same pro-
26. Primary production is concerned with the portion

(A) distribution of goods

(B) providing goods to meet essential 31. A country has a favourable balance of trade
needs when
(C) provision ofraw materials
(D) manufacture of goods (A) it exports more than it imports
(B) it imports more than it exports
(C) there are no restrictions to trade
27. A bulk increasing industry should be sited (D) imported goods are cheaper
near its

(A) source of raw materials

(B) m;:1rket
(C) bank
(D) source of power

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32. A company wishes to introduce a new break- 35. Which of the following is responsible for
fast cereal aimed particularly at small chil- 'breaking bulk'?
dren. Which techniques of advertising are
LIKELY to make the children ask their par- (A) Manufacturer
ents to buy the cereal? (B) Wholesaler
(C) Retailer
I. Emphasize the nutritional value. (0) Consumer
II. Package it in a brightly coloured
box.
Ill. Enclose free gifts of toys and puz- 36. Before exporter B sent goods to importer A
zles. he insured the consignment and paid the
IV. Compose attractive jingles and have captain of the vessel the charge for car-
them played regularly on the radio. nage. Goods were shipped

(A) I, Ill and IV only (A) f.o.b.

(B) III, IV and II only (B) c.i.f.
(C) IV, II and I only (C) f.a.s.
(0) I, II and III only (D) c.o.d.

33. Which of the following activities carried 37. If an exporter quotes prices CIF, it means
out in a firm will NOT be under the super- that the
vision of the marketing manager?
(A) e\'porter pays the freight
(A) Packaging (B) importer pays the freight
(B) Advertising (C) exporter pays insurance and freight
(C) Distribution (D) importer pays insurance and freight
(0) Purchasing

38. If you were not sure of a customer's ability

34. Which of the following is an example ofa to pay for an order by which of the follow-
cottage industry? in_g means would you request payment?

(A) Making cabbage baskets at home [. A _crossed cheque

for sale II. A money order
(B) A car-parts business operated from III. A bank draft
home IV. A promissory note
(C) A hire-care business run from home
(D) A plant nursery run from home (A) I and IV only
(B) III, 11, 1 and IV
(C) II and Ill only
(D) I, II and III only

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Items 39 - 40 refer to the following dia- 43. Which ofthe followingtypesofinsurlince is a

gram. government likely to require each employed
individual to pay?

(A) National insurance

(B) Liability insurance
{C) Life insurance
(D) Car insurance

44. Which of the following is the MOST im-

Signed: L. Stanley portant use of collateral security to the
borrower?

(A) It can be sold if the borrower fails

to pay.
39. The document above may be described as (B) It gives the banker an idea of the
state of the business.
(A) an order cheque (C) It establishes the financial position
(B) a promissory note of the borrower.
(C) a bearer's cheque (D) It improves the borrower's chance
(D) a Bill of Exchange of getting a loan.

40. Mr. Fray, in the document, is referred to as Items 45 - 47 refer to the following:
the
The group below consists of four lettered
(A) payee headings followed by a list of numbered
(B) endorsee phrases. Select one heading which is most
(C) drawee closely related to it. Each heading may be
(D) payer used once, more than once or not at all.

(A) Income Tax

41. Tom invests his savings by buying shares (B) Corporation Tax
in a company. From this investment Tom (C) Excise duty
expects to receive (D) Customs duty

(A) dividends.
(B) profits. 45. Tax paid on wages and salaries
(C) interest.
(D) revenue. 46. Tax paid by companies

47. Tax paid on goods entering the country

42. A court order requiring an employer to
deduct money from an employee for pay-
ment of ti'is debts is known as

(A) garnishment.
(B) demand.
(C) withdrawal.
{D) [evenue.

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Item 48 is based on the following infonnation. Items 50-52 refer to the following.

Loleen lives in a country where the follow- for each numbered statement select the one
ing tax structure exists. heading which is most closely related to itand
mark the corresponding letter on the answer
sheet. Each heading may be used once, more
TYPE OF TAX % than once, or not at all.

Stamp Duties 10 (A) Pure competition

Capital Gains Tax 12 (B) Pure monopoly
Corporation Tax 25 (C) Monopolistic competition
Customs Duties 30 (D) Oligopoly

48. What percentage of tax is paid by Loleen if 50. Price is unaffected by the behaviour of the
she sells a building for a profit of$ l .Sm? individual buyer or seller and is established
for the entire industry.
(A) 10%
(B) 12% 51. The price allows the firm abnonnal profit
(C) 25% though its marginal cost equals its marginal
(D) ~0% revenue.

52. Price equals the finn' s average cost, mar-

49. ginal cost and marginal revenue.
Demand Supply

53. If a Caribbean country should devalue its

Price currency, it is MOST likely that
$
(A) its imports would become cheaper
and its exports would become more
Demand
Supply expensive
Potatoes (Kg) (B) its imports would become more
expensive and its exports would
Using infonnation from the diagram above, become cheaper
which of the following statements can be (C) both its imports and exports would
deduced? become more expensive
(D) both its imports and exports would
l. More potatoes are demanded at a become cheaper
lower price.
I
j II. Fewer potatoes are supplied at a
higher price.
V III. More potatoes are supplied at a
lower price.
IV. Fewer potatoes are demanded at a
higher price.

(A) l and ll only

(B) I and IV only
(C) l, ll and III only
(D) ll, Ill and IV only

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54. Whichofthefollowingpractices would NOT Item 58 refers to the following diagram.

contribute to the economic development and
growth ofa community?

(A) Increased use of the country's natu-

ral resources
(B) Increased importation of consumer
goods
(C) Provision of loans and technical
assistance for establishing local
businesses
(D) Provision of more infrastructure
within the country D

55. International· trade owes its origin to

58. What is the movement downwards along
(A) countries with large populations not the curve known as?
having sufficient goods
(B) the varying resources of different (A) Extension of demand
regions (B) Contraction of demand
(C) the fact that countries desired to (C) Increase in demand
have greater contact with each (D) Decrease in demand
other
(D) the great need for foreign exchange
by most countries 59. Which of the following features is a disad-
vantage of nationalisation?

56. Which of the following is the distinguish- (A) Profits remain in the country.
ing characteristic of a low standard of (B) Jobs are provided for more people.
living? (C) Losses are met by the taxpayers.
(Q) Essential services are provided at
(A) Primary school education lower prices.
(B) Short life expectancy
(C) Persistent ill health
(D) Living in unhealthy conditions 60. Which of the following are MAJOR eco-
nomic problems facing many Caribbean
countries today?
57. Most English speaking Caribbean tcrrito-
ries are members of all the following or- L High levels of unemployment
ganizations EXCEPT IL Adverse balance of payments
Ill. Low productivity in manufactur-
(A) CDB v ing
(B) OPEC .; IV. Lack of capital for investment
(C) CARICOM ~
(D) 'ACP (A) I and II only
(B) II and Ill only
(C) I, II, lil and IV
(D) I, Ill, and IV only

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

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CSEC POB June 2003 P1

-2- "
1. Which ofthe following statements describe 5. A' line relationship' in an organisation Is one
the functions ofa business unit? which

l. Production of goods and services (A) exists between a senior officer and.
II. Creation of jobs - his subordinate
Ill. Maximization of sales (B) is not connected by intermediary
IV. Education of workers officers or other senior personnel
(C) exists between the manager and is
(A) I, II and Ill only connected directly to his employ-
(B) I, II and IV only ees
(C) I, III and IV only (0) involves only one superior officer
(D) II, III and N only

6. What is the BEST suggestion to a sole trader

2. Which of the following conditions oper- whose business is expanding too rapidly for
ated under the barter system? him to control?

(A) All households were self-sufficient (A) Purchase more cash registers.
(B) The rate of exchange was fixed (8) Institute a self~service system.
(C) Goods were. used as a means of (C) Increase the stock available.
exchange (0) Set up departments with managers.
(0) Oeterminingthe value ofan item was
easy
7. In a large organization if workers are dis-
satisfied about working conditions the trade
3. Broad policies for Public and Private Com- union representatives' first action would
panies in the Private Sector are formulated be to
by the
(A) have discussions with the person-
(A) shareholders nel officer
(B) board of directors (8) advise employees to adopt go slow
(C) company secretary tactics
(0) managing director (C) plan for strike action
(0) request a meeting with the board of
directors
4. In a public limited company the ordinary
shareholders collect their dividends
8. Which of the following methods can be
(A) before those holding preferred used to improve the communication flow
shares in an organisation?
(B) before those holding debentures
(C) after those holding deferred shares l. Suggestion schemes
(0) after those holding preferred shares II. Films and film strips
II I. Staff members
IV. Notice boards

(A) I, II and III only

l (B) I, II and IV only
r (C) II, III and IV only
(0) . I, Iii llf lllld' IV ~
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Items 9 - 11 are based on the diagram below which shows a section of a typical vertical
organisational chart for a manufacturing company.

BOARD OF DIRECTORS (1)

MANAGING DIRECTORS (2)

PRODUcnON MANAGER MARKETING MANAGER CHIEF ACCOUNTANT

• (4) (5) (6)

9. The relationship between the highest level 10. The managerial function performed at level
of management down to the various de- 2 is BEST described as
partments is known as the
(A) judicial
(A) rank (B) delegatory
(B) line (C) procedural
(C) staff (D) promotive
(D) flow
11. The managerial function performed at level
3 is BEST described as

(A) disseminatory
(B) communicative
(C) executive
(D) consultative

12. Which of the following statements describe 13. Mr Gyma, the General Manager of Z Co. is
the functions of management? always too busy to discuss problems with
workers and to listen to suggestions from
I. Co-ordinating the work ofemploy- his employees. His leadership style can be
ees described as being
II. Delegating work to subordinates
III. <;:ontrolling employees and raw (A) authoritarian
"materials (B) democratic
IV. Ensuringthatemployeesjoinatrade (C) laissez-faire
union (D) bureaucratic

(A) I and II only

(B) II and Ill only
(C) ~ U ~ U,J Oflir
(0) . D. Wand IV !>flly
 . ~ .

14. Which of the following policies adopted 17. According to the law of contracts, a con-
by management is MOST LIKELY to tract has NOT been effected until
ensure worker morale?
(A) there has been an exchange of money
(A) Employees should take part in de- between the contractual parties
cision-making on an ongoing ba- (B) the acceptance ofthe offer has been
sis since every employee has du- made before witnesses
ties and responsibilities. (C) consideration has been made with
(B) Supervisors should make decisions respect to the contract
when they have been directed to (D) both parties have received copies
do so by the general manager. of the contract document
(C) The general manager should make
all the decisions because he is
responsible for the performance 18. Which ofthe following contracts MUST be
of all employees. evidenced in writing?
(D) Decisions made by the top man-
ager and his advisers must be- (A) Purchase of a bus-ticket
I carried out by employees as di- (B) Purchase of a radio
rected to ensure that there will be (C) Purchase of a lot of land-
r no breakdown in work p,oce- (D) Purchase of a car for cash
I
dure.
I 19. Which of the following is NOT a natural
/ , 15. Which ofthe following elements is NOT a
I , resource of the Caribbean?
requirement of a simple contract?
(A) Gold
(A) Consideration
(B) Bauxite
(B) Legalisation ,
(C) Coal
(C) Acceptance
(D) Timber
(D) Offer

16. Which of the following situations would 20: The money used for the day-to-day opera-
occur if a contract for the sale of goods tions of a business is called
becomes void?
(A) fixed capital
I. The prospective buyer becomes (B) nominal capital
the owner. (C) floating capital
II. The seller has the right to keep any (D) working-capital
money or goods which have been
given to him in this transaction.
III. The prospective buyer does not 21. A switch to capital intensive methods of
become the owner. production in a country might, in the short
IV. The seller must return any money run, result in
or goods given to him by the
prospective buyer for the trans- (A) increased unemployment
action. (B) increased output
(C) reduced output
(A) II and III only (D) reduced unemployment
(B) III and IV only
(C) I and IV only
(D) I, ll and IV oniy
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22. Wealth set aside for the production of fur- 26. Which of the following are classified as
ther weal th is termed Rrimary industries?

{A) banking I. Farming

(B) commerce II. Services (direct and commercial)
(C) capital III. Manufacturing
(0) saving IV. Mining

(A) I and II only

23. What is the MOST LIKELY effect on a (B) I and IV only
developing economy when professional and (C) II and IV only
skilled labour migrate to developed coun- (0) I. II, III and IV
tries?

(A) Unski.lled labourers can demand 27. Which of the following are examples of
higher wages. extractive industries?
{B) The demand for skilled labour and
• professional services will de- I. Mining
crease., II. Refining
(C) Unskilled labourers can work III. Fishing
harder. IV. Agriculture
(D) Production levels of goods and serv-
ices wilJ decrease. (A) I, II and III on] y
(B) I, II and IV only
(C) I, III and IV only
' 24. The person responsible for bringing to- (D) II, III and IV only
gether and organising the factors of pro-
duction is the
28. Which of the following is an example of an
(A) trade unionist extractive type industry?
(B) entrepreneur
(C) manager (A) Transport
(D) financier (B) Fishing
(C) Tourism
(D) Refining
25. Which of the following LEAST affects the
location of an extractive industry?
29. In the Caribbean, many people are hired for
(A) Proximity to sources of raw mate- sugar-cane farming and very little equip-
rials ment is used. This industry can BEST be
(B) Availability of an abundant Jabour described as
supply
(C) Proximity to large shopping areas (Al labour intensive
(D) The presence of good roads and (B) having low capital input
·. drainage (C) having high capital input
(0) capital intensive

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30. Which of the following activities are in- 34. A firm expands to achieve internal econo-
volved in the field of marketing? mies of scale because it wants to

I. Sales promotion - (A) increase costs of production

II. Public advertising - (D) increase worker's wages
III. Packaging and selling (C) decrease the quantity of goods it
IV. Distribution and decisions produces
(D) decrease its costs per unit
(A) I and II only .
(B) III and IV on! y
(C) II, III and IV only 35. In which of the following types of trade can
(D) I, II, III and IV· the hire purchase method of buying be
used?

31•. Which of the following documents gives (A) Wholesale trade

the name of the ship and fuII particulars of (B) Retai 1 trade
th~ shipment of goods? (C) Import trade
(D) Foreign trade
(A) Bill of Sale
(B) Bill of Lading
(C) Way Bill 36. All persons can be called consumers be-
(D) Broker's Bill cause they

(A) use goods

32. Which of the foilowing is LEAST likely to (B) have wants
be described as good public relations for a (C) satisfy themselves
company? (D) buy goods

(A) The offering of scholarships

(B) Reduction in price to retailers 37. In which of the foIIowing situations would
(C) Sponsorship of a steel band a credit note be sent to the buyer?
(D) Hosting of an annual sport event
L The buyer is overcharged.
II. The buyer is undercharged.
33. Which of the following is a 'hire purchase III. Some of the goods are damaged.
agreement'? IV. Some of the goods are returned.

(A) ·An individual has a record player (A) I and III only
he plans to use at dances for a (B) II and III only
fee. (C) II and IV only
(B) An individual contracts to rent a (D) I, III and IV only
television for three years.
(C) An individual pays a portion of the
cost of an article, possesses it
and continues to pay a stated sum
at specific periods.
(D) An individual buys an article, pays
part of the cost, and gets the
article when the final balance is
paid.

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38. In which order in the marketing process 42. Which of the following refers to the type of
would the following MOST likely occur? iflsurance taken out by a firrn specifically
to cover it against theft by er,nployees?
I. Advertising
II. Preparation of production (A) Group insurance
III. Market research (B) Fidelity bond insurance
IV. Sales. (C) Marine insurance
(D) Comprehensive cover insurance
(A) I. II. III. IV
(B) III, II, I, IV
(Cl III, II, IV, I 43. Which of the following are MAJOR func-
(D) IV, II, III, I tions of a central bank?

I. Acting as the government's bank

39. Which of the following documents would II. Keeping deposits of all commer-
have been used by a ship owner who agreed, cial banks
for a sum of money, to provide a ship to III. Givingloans to private individuals
carry a shipment of cargo from one port to and companies
another? IV. Helping to regulate the money sup-
ply of a country
(A) Import .licence
(B) Bill of lading (A) I, II and III only
(C) Charter party (B) I, II and IV only
(D) Airway bill (C) I, III and IV only
(D) II, III and IV only

40. Which of the following documents would

give title to goods? 44. Which of the following CANNOT be used
as collateral for obtaining a loan from a
I. A bill of sale financial institution?
II. A bill of materials
III. A bill of lading (A) A mortgaged home with insurance
IV. A bill of sight coverage
(B) An insurance policy with a cash
(A) III only value
(B) I and III only (C) An amount in a fixed deposit ac-
(C) II and IV only count
(D) III and IV only (D) Wife/husband's legally owned
property not covered by insur-
ance
41. The bank account which allows acustomerto
make payments by cheque is the

(A) q1rrent account

(B) savings account
(C) deposit account
(D) capital account

. !
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 -8-

Items 45 - 47 refer to the following forms 50. When the demand for a commodity de-
of taxation a government uses to raise creases and the supp.ly increases the price
revenue: should

(A) Preference duty (A) increase

(B) Customs drawback (Bl decrease
(C) Excise duty (C) remain constant
(D) Excise drawback (D) exceed cost

Which of the above forms of taxation is 51. The price of an article is usually high when
there is a -
45. imposed on goods produced in a country?
(A) large quantity for sale and few peo-
46. a refund on duty collected on goods im- ple wanting to buy
ported into a country for manufacture and (B) small quantity for sale and few
exported after manufacture? people wanting to buy
(C) small quantity for sale and many
47. a refund of taxes imposed on goods pro- people wanting to buy
duced in a country but subsequently ex- (D) large quantity for sale and many peo-
ported from it? ple wanting to buy

48. Which of the following is an example of 52. Browne· s store sells. pencils at 15¢ each.
indirect taxation? White has opened a store about 200 metres
away and sells the same brand of pencils at
(A) Income tax 12¢ each. What are the LIKELY effects on
(B) Consumption tax Browne's business?
(C) Estate duty
(D) Water rate · I. Customers will decrease.
II. Capital will decrease.
Ill. Ge'neral stock will increase.
49. Market equilibrium exists when IV. Turnover will increase.

(A) buyers pay reasonable prices for (A) I and II only

goods (B) I and III only
(B) sellers are satisfied with the price (C) I and IV only
paid for their goods (D) II and III only
(C) at the ruling market price, buyers
do not want to add to the stock of
goods they already have
(D) at current prices, the amount buyers
wish to buy equals the amount sell-
ers want to sell

·1 _A1 :: f:, ·-~ · ..

•
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 -.
--: '?-
.
•'
-9 -

53. Which of the following situaiions is NOT a 57. Most English speaking Caribbean territo-
benefit of international trade? ries are members of ALL of the following
organizations EXCEPT ··
(A) A greater variety of goods is ob-
tained from overseas. (A) COB
(B) Political links are developed with (B) OPEC
other countries. (C) CARI COM
(C) Import restrictions can be imposed (D) ACP
on foreign items.
(D) Producers are able to increase their
market size. 58. Which of the following types of business
environment is MOST typical of the Com-
monwealth Caribbean area?
54. International trade owes its origin to
(A) · Corporate state
(A) countries with large populations not (B) Mixed economy
having sufficient goo<j'.; (C) Centrally planned
(B) the varying resources of different (D) Perfectly competitive
·regions
(C) the fact that countries desired to
have greater contact with each 59. Which ofthefollowing trading agreements is
other Barbados promoting when itsel Is furniture to
(D) the great need for foreign exchange Jamaica?
by most countries
(A) OECS
(B) CARJCOM
55. Which of the following practices would NOT (C) GATT
contribute to the economic development and (D) NAFTA
growth ofa community?

(A) Increased use of the country's natu- 60. Which ofthe following services are national-
ral resources · ised in MOST CARI COM territories?
(B) Increased importation ofconsumer
goods I. Food production
(C) Provision of loans and technical IL Water
assistance for establishing local 111. Communication
businesses rv. Electricity
(D) Provision of more infrastructure
within the country (A) [and II only
(B) II and [([ only
(C) [, [([ and IV only
56. A country can raise foreign exchange by (D) IL [([ and IV only
ALL o~.the following EXCEPT

(A) foreign loan

(8) grants from foreign countries
(C) bilateral trade
(D) domestic trade

. ,. . '1,\:'~· ,' . ' .

IP' VOtl , . . . BtPQ'~ TIME IS CALLED, CHECK VOURWORK ON THIS TEST.
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 -2-
CSEC POB January 2004 P1
l. Which of the following is NOT a primary 6. A nationalized industry is owned and control-
industry? led by

(A) Mining (A) local businessmen ..

(B) Building (B) the State
(C) Fishing (C) the Chamber of Commerce
(D) Farming (D) the workers of the firm

7. The profits of 'limited liability companies' are

2.
!. In primitive societies the economic system shared
was characterized by
(A) equally among shareholders unless
(A) barter other arrangements were made in
(B) mechanization the deed
(C) specialization (B) equally among all preference share
(D) money exchange holders
(C) among all directors and managers in
the proportion ofpreference shares
3.
'• John works in a bakery where he makes all held
the decision~ and takes all the profits. What (D) among shareholders in the ratio of
category of business is he working in? shares held

(A) Joint Stock Company

8. Whattype ofbusiness organisation would you
(B) Partnership
recommend to a group of five lawyers and
(C) Co-operative
twelve accountants who want to work to-
(D) Sole trader
gether?

(A) Sole trader

4. In which ofthe following situations would the
(B) Partnership
individual named have limited liability?
(C) Private limited company
(D) Co-operative society
(A) Tom who has 200 shares in a com-
pany that produces beer
(B) Alfred who is running a business of 9. A partnership that requires additional capital
his own can legally do which of the following?
(C) Mary who is operating a hair salon
jointly with her sister (A) Advertise shares to the public.
(D) Lucy who owns a private secretarial (B) Borrow money from the bank.
school (C) Issue bonds.
(D) Issue debentures.

5. Which of thefollowing characteristics of the IO. In the formation of a company, the Memoran-
sole trader form of business enterprise is dum of Association states not only the name
NOT advantageous to the owner? of the company but also the

(A) Secrecy (A) amount of capital to be issued

(B) Unlimited liability __ (B) way_the directors are chosen

.-. (C)

(D)
Low cost of organisation and
~:· K~~:~ .:;· ·~ ~:~·~:_~)=·=-.!.~ ·~:;·~ o~s~ li~a.f:!:!:-Si:!~ Jt. .!."~ ~ :~:~n:. .·a.:.: . : :.:. d: . .:s.: .·~ : :.~u- .;.;-=-:_;_-.~·~--~~~~}~--~~:~i~~~i~~nw~·
dissolution
Ownership of all profits
~
.;/:.
(C)
(D) ~-~~~-:a.~_~be~1~!t~at!;~-~peri!~ ~ :~ie:z·:':fi: ~,,
dividends to be paid per share
expenses paid in the formation of the
business
: .......,·"··_..•. .,.,.~
1 r
'":.t
 -3-

11. The policies of a company are formulated by 15. A supervisor can be expected to be MOST
the effective on the job when he is given the

(A) shareholders (A) power to hire and fire employees

(B) managers who work in his department
(C) directors (B) right to increase the wages of his
(D) auditors staff
(C) necessary authority to carry out the
responsibilities assigned to him
12. The President of the Mount Pleasant Student (D) special fringe benefits such as use of
Council met with the members and planned a the company transport for his own
fund-raising fair. In order forthis occasion to use
materialize successfully the President has
given the Vice-President and Committee
Chairman special duties to perform. This 16. A hotel gives vouchers for meals to its em-
procedure js usually referred to as ployees. This form of incentive is BEST
described as a
(A) delegating
(B) directing (A) fringe benefit
(C) controlling · (B) bonus
(D) motivating (C) motivation scheme
(D) reward

13. Mr Gyma, the General Manager of Z Co.,

refuses to discuss problems with workers and 17. Which of the following contracts must be
to listen to suggestions from his employees. made by deed?
His leadership style can be described as being
(~) Bills of exchange
(A) authoritarian (B) Insurance contracts
(B) democratic (C) Transfer of shares
(C) laissez-faire (D) Conveyances ofland
(D) bureaucratic

18. In a recent conversation Ann asked Betty the

14. Which of the following management prac- price at which she would sell a book. Betty
tices would contribute to the success of a replied that she would sell it for $5.00. The
business? conversation constituted

I. Pricing at maximum mark-up (A) a contract between the parties

II. Paying attention to the quality ofgoods (B) an offer from Betty to sell the book
or Services sold for $5.00 to Ann
III. Communicating with employees (C) an enquiry and statement of the sell-
IV. Earning maximum profits forowners ing price of the book
(D) the sale of the book for$5.00

~. (A)
(B)
(C)
I and II only
II and III only
II and IV only .
~ '·~-''
(D) . II, ID and IV only

~-~

- ---~,
 -4-

19. An increase in the productivity oflabourin the 24. Which of the following LEAST affects the
Caribbean region means that location of an extractive industry?

(A) agreater number of the population is . (A) Proximity to large shopping areas
now employed. (B) Availability of an· abundant labour
(B) more factors ofproduction are avail- supply
able for production. (C) Proximity to sources of raw materi-
(C) both population and the value of out als
put are decreasing. (D) The presence of good roads and drain-
(D) the value of output per man is greater age
than before.

20. The term 'human resources' refers to 25. 'Mass production' refers to which of the
following?
(A) persons available forproducti ve and
professional services (A) A nation's annual output of goods
(B) raw materials used in the manufac- (B) Goods used to produce other goods
'ture of goods (C) Goods produced by nature
(C) materials and goods made by human (D) Goods produced in large quantities
beings
(D) capital invested by shareholdersin 26. For which of the following reasons is a small
a company retail outlet able to survive despite competition
from large department stores?
21.
?1. A, Band C have dissolved their partnership
which is worth$ l2000. Proceeds are divided I. It sells goods at cheaper prices.
in the ratio 3: 2: I respectively. How much II. It buys goods at lower costs.
does B get? III. It benefits from personal contact with
customers.
(A) $1500 IV. It has lower overhead costs.
(B) $3000
(C) $4000 (A) I and II only
(D) $6000 (B) II and III on I y
'• (C) III and IV only
22.
:2. Which of these is an extractive worker? (D) I and IV only

(A) A dentist 27. Which ofthefollowingactivitiesare involved

(B) A butcher in the field of marketing?
(C) Aminer
(D) A foundryman I. Sales promotion
II. Public advertising
23.
3. Under which of the following classifications III. Packaging and selling
of industry· would the assembling plant ofa IV. Distribution decisions
motor car industry fall?
(A) I and II only
(A) Extractive (B) III and IV only
(B) Construction (C) II, III and IV only
(C) Service (D) I, II, III and IV
(D)
. -~- ...
Manufacturing
..... ' . ...
~ ..... ·-
,..- .

-5-

28. Whichofthefollowingcan be described as a 32. In which of the following types of trade can
marketing activity? \he hire purchase method of buying be used?

(AJ Ensuring that workers are given fringe (A) Wholesale trade
benefits (BJ Retai 1 trade
(BJ Distributing the commodities to out- (CJ Import trade
lets (D) Foreign trade
(C) Publicising advertisements for new
staff
(D) Issuing bulletins on staff matters 33. Which of the following is NOT a retailer?

29. Which of the following documents gives the (AJ The peddler on the beach
name of the ship. and full particulars of the (B) The fruit vendor who has a cart by
shipment of goods is the the roadside
(C) The hairdresser located in a shopping
(A) BillofSale centre
(B) Bill ofLading (D) The owner of the small grocery store
(C) Way Bill on the comer
(D) Broker's Bill

30. A company wishes to introduce a new break- 34. A person who handles goods in the interme-
fast cereal aimed particularly at small chi!- diate stage between the producer and the
dren. Which techniques of advertising are retailer is referred to as a
LIKELY to make the children ask their par-
(A) businessman
ents to buy the cereal?
(B) wholesaler
(C) sole trader
I. Emphasize the nutritional value.
(D) commission agent
II. Package it in a brightly coloured box.
III. Enclose free gifts of toys and puz-
zles.
IV Compose attractive jingles and have 35. The abbreviation f.o.b. means
them played regular! yon the radio.
(A) fee on board
(A) (BJ freight on board
II, Ill and IV only
(C) free on board
(B) I, III and IV only
(D) freeze on board
(C) I, II and IV only
(D) I, II and III only
36. A furniture manufacturer in Dominica wants
31. A real estate agent was offered a commission to import a stock of paint to keep in storage.
of2 rercentqn thefirst$40000and 3 percent If he wants to keep costs down, what is the
ontheremainderofahousevaluedat$46000. BEST method of ti;ansporting the paint?
If the sale was made at $50000 how much did
the real estate agent receive? (A) Through a pipeline
(B) On a aeroplane
r
(A) $ 218 (C) By truck
h
(B)
(C)
$ 250
$ 980 -· '\.
(D) By ship
.r
-

j
~.
(D) $1100
' j
 ,, -

-6-

37. An invoice for $70 has been sent to a pur- 42. A customer of a commercial bank acquires a
chaser of a sewing machine which was priced sum of money which he will not need before
at $700. Which of the following documents a year's time. He is BEST advised to
should be sentto the purchaser to inform him
that he has been undercharged by $630? (A) lodge the amount to his savings ac-
count
(A) Credit note (B) lodge the amount to a fixed deposit
(B} Advice note account
(C) Debit note (C) purchase some preference shares
(D) Pro-forma invoice from the bank
(D) deposit the amount in his current
account . !
38. Money was introduced as a medium of ex-
change because it
43. Tom invests his savings by buying shares in a
(A) adds to the value of goods company. FromthisinvestmentTomexpects
(B') is ll scarce resource to receive
(C) facilitates trade
(D) is legal tender (A) dividends
(B) profits
(C) interest
39.
!9. The bank service which allows a customer to (D) revenue
make payments by cheques is the

(A) current account 44. Which of the following types of investment

(B) savings account carries a fixed rate of interest whether profit
(C) deposit account is made or not?
(D) capital account
(A) Participating preference
(B) Preference
40.
10. On which of the following bank accounts is a (C) Cumulative preference
customer normally charged service fee? (D) Debentures

(A) Savings
(B) Current 45. Which of the following types ofinsurance is
(C) Term Deposit a government like! y to require each employed
(D) Fixed Deposit individualtopay?

(A) National insurance

41.
I. A trader invests $18 750 in business and (B) Liability insurance
realises a ne.\ profit of $750 for the period. (C) Life insurance
What percentage return on capital is this? (D) Car insurance

(A) 4%
~--- (B) 6%
'"" (C) 7.5%
(D) 12.5%
.
' .. "•
.,;.

'
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·;:I
~
 • •

-7-

46. Which of the following is legislation designed Item 50 refers to the graph _below.
to protect the consumer?

(A) Negative List

(B) Hire Purchase Act y
$! 80
(C) Customs Ordinance f 70 L
(0) Banking Act u 60
=
- 50
~
·;:: 40
i:l.. 30
47. When a high property tax is levied in a country 20 x N
it is most likely t_o have all of the following
effects EXCEPT to 2 4 6 8 IO 12 14
Quantity in units
(A) reduce the number of new buildings
erected
(B) encourage business firms to set up
business elsewhere 50. According to the information given in the
(C) create additional revenue forthe gov- graph above, the equilibrium price in cents is
ernment
(0) entice citizens into buying more land (A) 20
(B) 50
(C) ro
48. Which of the following are examples of direct (0) 80
taxation?

I. Income tax 51. The price of an article is usually high when

II. Purchase tax there is a
III. Corporation tax
(A) large quantity for sale and few people
(A) I and II only wanting to buy
(B) II and III only (B) small quantity for sale and few peo-
(C) I and III only ple wanting to buy
(0) I, II and III (C) small quantity for sale and many peo-
ple wanting to buy
(0) large quantity for sale and many peo-
49. Which of the following conditions will NOT ple wanting to buy
affect consumer demand for fish?

(A) Prico of chicken 52. Which of the following actions of Government

(B) Disposable income is MOST likely to lead to an improvement in
(C) Taste and preference the standard ofliving?
(0) New fishing techniques
(A) Abolishing taxes on low incomes
, (B) Giving tax incentives to business
•
(C) Increasing the income tax rate

j
(D) Printingrrtoremoney
 -8-

53. Which of the following practices would NOT contribute to

the economic development and growth of a community?

(A) Increased use of the country's natural resources

(B) Increased importation of consumer goods
(C) Provision of loans and technical assistance for
establishing local businesses
(D) Provision of more infrastructure within the country

Item 54 is based on the following table.

Year Real Exports ($m) Real Imports ($m)

1991 72 70
1992 83 79
1993 80 86
1994 95 88

54. In what year was there an

unfavourable balance oftrade?

(A) 1991
(B) 1992
(C) 1993
(D) 1994

55.
)5. Which of the following is a visible export? Item56 refers to the following information.

(A) Shipping
(B) Raw materials 1976 Imports Exports
(C) Insurance $ $
(D) Technical advice 301 276 320400

56. The above table indicates which of the follow-

ing?

(A) A favourable balance of trade

(B) An adverse balance of trade
(C) A deficit in the balance of payment
(D) An excess of total payments to for-
eigners ,..
. .-•-~
. ·'-
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..
-9-

57. The purpose of CARI COM is to 59. The objectives of CARI COM for its member
states are
(A) foster interregional trade and com-
mon services I. Economic integration
(B) allow 13 member states to meet to- II. Co-ordination of foreign policy ar-
gether rangements
(C) allow for unrestricted movement of III. Removal of trade barriers
persons among the territories IV. Removal of immigration barriers
(D) encourage the transfer of technology
within the region (A) I and II only
(B) II and III only
(C) II and IV on! y
58. Which group of countries listed below are (D) I, II and III on! y
NOT full membersofCaricom?

(A) Barbados, Jamaica, Trinidad and 60. Which of the following usually has an adverse
Tobago effect on the supply oflabour?
(B) Antigua, St. Lucia, St. Vincent
(C) Bahamas, Haiti, Surinam (A) An increase in population
(D) Dominica, Grenada, Guyana (B) A reduction in small scale operations
(C) An increase in migration
(D) Areductionintheschool-leavingage

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST .

..
 category of business is he working in?

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CSEC POB June 2004 P1
Ot240010/F2004

~ . '.
 1

• •
-J -

10. MIS stands for 14. Wl1ich ofthe following policies adopted by
management is MOST LIKELY to ensure
(A) ManagementlnductionSystems worker morale?
(B) Managementlnformation Systems.
(C) ManufacturinglndicationSystems. (A) Employees should take part in
ID) Mannhcturinp: lnstP"~tional Systems decision-making on an ongoing
basis since every employee
has duties and responsibilities.
11. WhichofthefollowingisNOTaresponsibility (B) Supervisors should make decisions
ofmanagement to employees? when they have been directed to
do so by the general manager.
(A) Providingadequatewotkingfacilities (C) The general manager should make all
(B) Producinggoodsatreasonableprices the decisions because he is respon-
(C) Maintaining good communication sible for the performance of all
(D) Providing training employees.
(D) Decisions made by the top manager
and his advisers must be carried
12. The manager of ABC company has em" out by employees as directed to
barked upon sponsoring a school cricket team ensure that there will be no
in a Caribbean territory. Which responsibility break down in work procedure.
is the company fulfilling?

(A) Its obligation to maximise surpluses 15. .The MAIN function ofthe trade union is to
(B) ltsobligation to customers
(C) Its economic obligation (A) preventworkersfrom being dismissed
(D) Its social obligation (B) increase union leaders' popularity
(C) protect workers' rights
(D) train workers to be leaders
13. "The leader deliberately stands back and lets
the subordinates plan their own work and
make theirown decisions as far as possible." . 16 .. Which ofthe following describes an essential
feature of a valid contract?
Which word BEST describes the type of
administration referred to in the above state" (A) The offer has been communicated to
ment? the offeree.
(B) A counter offer has been made by
(A) Participative the offeree to the offeror.
(B) Laissez-Faire (C) The offer is made in writing by the
(C) Democratic offeror.
(D) Authoritarian (D) The offer has been accepted by the
offeree either in writing ororally .

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•

-4-

17. In a recent conversation Ann asked.Betty the 21. Which ofthe following' is a fixed asset for a
price at which she would sell a book. Betty business?
replied that she would sell it for $5.00., The
conver,ation ~or.ctituted (A) Bicycleforprivateusc
tB) Washingmachineiorresale
(A) a contract between the parties (C) Motorcarforfamilyuse
(B) an offerfromBettytosell the book (D) Motorlorry for delivery ofgoods
for $5.00 to Ann
(C) the sale ofthe book $5.00
(D) an enquiry and statement ofthe sell- 22. Whichofthefollowingareexamplesofservice
ing price of the book industries?

18. Felix Ward was offering his car forsaleat$ l 5 (A) Agriculture and construction
000. His friend, Frank Moore, stated that he (B) Banking and tourism
wanted the car and would pay $12 000. (C) Manufacturing and fishing
(D) Mining and transportation
Thi.s situation describes a

(A) contract 23. Primary production is concerned with the

(BJ statement ofintention
(C) counter-offer (A) distribution ofgoods
(D) misrepresentation (B) providing goods to meet essential
needs.
(C) provisionofrawmaterials
19. The money used for the day-to-day opera- (D) manufacture ofgoods
tions ofa business is called

(A) fixed capital 24." Which ofthe following are classified as pri-
(B) nominal capital mary industries?
(C) floating capital
(D) working capital I. Farming
11. Services (direct and commercial)
III. Manufacturing
20. What is the MOST LIKELY effect on a IV. Mining
developing economy when professional and
skilled labourmigrate to developed countries? (A) I and II only
(B) I and IV only
(A) Unskilled labourers can demand (C) II and IV only
'higher wages. (D) I, II, III and IV
(B) The demand for skilled labour and
professional services will decr¢ase. 25. Which of the following is an example of
(C) Unskilled labourers can work harder. extractive production?
(D) Production levels ofgoods and serv-
ices will decrease. (A) Agriculture
(B) Communication
(C) Manufacturing
(D) Tourism
 ~. "-

-5-

26. Whichofthefollowingproductiveactivitiesis 31. Which ofthe following describes capital-il'.-

LEAST likely to be conducted on a large tensive industry?
scale in the Caribbean region?
(A) Capital and labour in the same
(.A~) !'ac1<:05E·:g pPJp01i;, 1P
(B) Mining (B) Large amounts of labour and very
(C) Whaling little capital
(D) Building (C) All capital and no labour
(D) Large amounts of capital and very
27. Which one ofthe following activities can be little labour
BEST carried out as a cottage industry?
32. Which ofthe following documents gives the
(A) Smeltingofiron ore name of the ship and full particulars of the
(B) Manufacturingofleathersandals shipment ofgoods?
(C) Refining ofpetroleum
(D) G:anningofpigeon peas (A) BillofSale
(B) BillofLading
28. Which ofthe following conditionswould co.n- (C) WayBill
stitute a Iinkage between two industries? . (D) Broker'sBill

(A) The output of one industry of the

33. A machine whose cash price is $700 was
economybecomestheinputofan-
boughtonhirepurchasefor$784. Thecostof
other industry.
credit was
(B) Twofirmsmanufacturesimilargoods.
(C) Two firms are responsible for the
(A) $ 12
manufacture of different kinds
(B) $ 84
ofgoods.
(C) $700
(D) One firm shares the use ofmachin-
ery with another firm. (D) $784

29. 'Mass production' refers to which of the 34. In which ofthe followingtypesoftradecan the
following? hire purchase method ofbuying be used?

(A) A nation's annual output ofgoods (A) Wholesale trade

(B) Goods used to produce other goods (B) Import trade
(C) Goods produced by nature (C) Foreign trade
(D) Goods produced in large quantities (D) Retail trade

30. In which ofthe following situations would the A person who handles goods in the intermedi-
35.
individualnamedhavelimitedliability? ate stage between the producer and the re-
tailer is referred to as a
(A) Tomwhohas200sharesinacom-
pany that produces beer (A) businessman
(B) Alfred who isrunningabusinessof wholesaler
(B)
his own (C) sole trader
(C) Mary who is canying on a hairdress- (D) commission agent
ing shop jointly with her sister
{D) Lucy whoownsaprivatesecretarial
school

·-
 36. · Which ofthe following is NOT a function of 38. A post-dated cheque is one which
the retailer? ·
(A) was written no longer than six months

II (A)

((: /
Transporting goods to suitable Stor-
age facilities ·
p,.<~V iJi.,g ;.{ l~"J;:tl SUpplj Gf f;f•'.. d~
(8)
ago
is d.ated by the businessman to agree
v;ith th" elate of the dvcument re-
~ (C) Preparing goods for resale · questing payment
(D) Selling in small quantities (C) is dated by the bankdatesontheday
the cheque is presented for pay-
37. Which of the following documents w6uld ment
have been used by a ship owner who agreed, (D) is dated for payment at a future
fora sum ofmoney, toprovideashiptocarry date
ashipmentofcargo from one port to another?

(A) Import licence

(B) Billoflading
(C) Charter party
c0) Airway bill

Below is an illustration ofa cheque which has been returned by the bank as being
dishonoured.

·1
4th June 1987 •I 4th June 1987

:1 ABC Bank
:I Higlr Street
--,.....--:1 Low town
:I
I Joe Brown d
- - - - 1 Pay --~--- on or er
I ()()
. I _______
Seventy dollars x_x
1
I
$170.00 . I XJones
I

39. Which ofthe following BEST suggests the bank's reason for dishonouring it?

(A) The counterfoil has not been detached.

(B) The counterfoil has not been completely filled out.
(C) The amount in words and the amount in figures do not agree.
(D) Thesignatureis ilotl@gible.

..
OOONT01JIBNEXTPAOE j
 -7-

40. Whichofthefollowingisthequickestmethod 45. When the government deducts part of the

ofpayment for a businessman who is 20 000 workers' weekly or monthly salaries, the tax
kilometres away? is called

(A) Cash (A) income tax

(B) (.".0~"'T!?d )fl tax
'.B) Cheque
(C) Postal Order (C) capital gains tax
(D) Telegraphic money order (D) value added tax

41. The bank service which allows acustomerto 46. Which of the following forms of taxation
make payments by cheques is the could be classified as 'direct'?

(A) current account (A) Customs duty

(B) saviiigsaccount (B) Income Tax
(C) deposit account (C) Purchase Tax
(D) capital account (D) Excise duty

42. One ofthe major functions of a central bank 47. Which ofthe following BEST assists persons
is to in satisfying their basic needs?

(A) Money
(A) issue notes and coins
(B) Recreation
(B) accept deposit accounts
(C) Travel
(C) make loans and advances
(D) Education
(D) issue stocks and shares

48. When the demand for a commodity decreases

43. WhichofthefollowingCANNOTbeusedas
and the supply increases the price should
collateral forobtaining a loan from a financial
institution? · tA) increase
(B) decrease
(A) A mortgaged home with insurance (C) remain constant
coverage (D) exceed cost
(B) An insurancepolicywithacash vah1e
(C) Anamountinafixeddepositaccount
(D) Wive's/husband's legally owned prop- 49. Ifthere is a scarcity ofsupply in potatoes and
erty not covered by insuranC!" many people want to buy, the price is likely to
be

44. Which ofthe following types ofinsurance is (A) in equilibrium

agovemmentlikelytorequireeachemployed (B) variable
individual to pay? (C) low
(D) high
(A) Liabilityinsurance
(B) National insurance
(C) Life insurance
(D) Car insurance

' -
 .._. .
'

-8.

50. Barry decided to start his own clothing store. 54. Which bf the following is NOT a benefit of
Heishappyworkingforhimselfbecause . international trade?

(A) of the long hours helms to put in (A) Agreatervariety ofgoods is obtained
rB: anydecisionhemakescan be put into from overseas.
p. ··· · -~rnmediately rm Politicalli'.lks~redevelopedwithother

(C) hewantstowearbrandnamedothes. countries. "'

(D) he wants to meet many people (C) Import restrictions can be imposed
on foreign items.
(D) Producers are able to increase their
51. Which of the following measures must a market size.
country adopt to correct adverse Balance of
Payment problems?
55. A country has a favourable balanceoftrade
L Tariffs when
IL Quotas
Ill. Devaluation (A) it sells more than itbuys
IV~ Revaluation (B) it buys more than it sells
(C) there are no restrictions to trade
(A) I and II only (D) imported goods are cheaper
I (B) II and III only
'.,I (C)
(D)
I, Iii and IV only
I, II and III only 56. In trading, a licence involves having
!

52. When there is competition, the price of an (A) aspecificnumberofgoods to be sold

I articlewill depend on the (B) permission to bring in goods
l (C) money to be paid in foreign goods
(A) relationship between its de1mihdand (D) a ban on goods coming in to be sold
supply
(B) change in the cost 6fliving
(C) amount of money circulating in the 57. To correct an adverse balance of payments
country position, agovemmentmay
(D) changes in the value of money
(A) reduce income tax
(B) increase the money supply
53. Which ofthe following practices would NOT (C)' reduce credit
contributetotheeconomicdeveloprrientand (D) increase exports
growth ofa community?

(A) Increaseduseofthecountry'snatu- 58. Which ofthe countries listed below are NOT
ral resources full members ofCari com?
(B) Increased importation ofconsumer
goods (A) Barbados, Jamaica, Trinidad and
(C}. Provision ofloans and technical as- Tobago
sistance forestablishing loGal bµsi- (B) Antigua, St. Lucia, St.Vincent
nesses (C) Bahamas, Haiti, Surinam
(D) Provision ofmore infrastructure (D) Dominica, Grenada, Guyana
within the country

• . . 1. 5
OOQNTOTHENBXTPAGE
 -. -------~.--· ---------------· ------------·---~---~----·----------- ----------- -- - - - -

l
l' -9 -
\l
59. Which of the following types of business 60. A nationalized industry is owned and control- .
environment is most typical ofthe Common- led by
wealth Caribbean area? ·
(A) local businessmen
(A) Corporate state (B) thei,c,vc1ncnent
(B) Mixed economy (C) theChamberofCommerce
(C) Centrally planned (D) the workers of the firm
(D) Perfectly competitive

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.
r .

t AFFIX SEAL HERE t

CANPIDATE ,- PLEASE .NOTE!
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\W:Slie~if'!fiJJiirft1>·<1a:so:mo TEST CODE 01240010
FORMTP2005130 ./~;~,:':'.' ·~~~~~~'i:.~;i~~iJt'~)~~:·. MAY/JUNE 2005

CARIBBEAN EXAMINATIONS COUNCIL

SECONDARY EDUCATION CERTIFICATE
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01 - General Proficiency
75minutes
( 31 MAY 2005 (p.m.) )

READ THE FOLLOWING DIRECTIONS CAREFULLY

I. In addition to this test booklet, you should have an answer sheet.

2. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item you
are about to answer and decide which choice is best.

3. On your answer sheet, find the number which corresponds to your item and blacken the space
having the same letter as the answer you have chosen. Look at the sample item below.
Sample Item
The money a business receives from the sale
-
of goods or services is called its Sample Answer
(A)
(B)
assets
capital
@® •@
(C)
(D)
income
resources
The best answer to this item is "income", so answer space (C) has been blackened.
-
4. If you want to change your answer, be sure to erase your old hnswer completely and fill in your
new choice.

5. When you are told to begin, turn the page and work as quickly and as carefully as you can. If you
cannot answer an item,omititandgoon to the next one. You can return totheomitted item later. Your score
will be the total numberofcorrectanswers.

6. This test consists of 60 items. You will have 75 minutes to answer them.

7. Do not b~ concerned that the answer sheet provides for more answers than there are items in this
test.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

'~· _ _ _· _01_2400_•_·cw
__ 200S
_ _ _ _Copyri
_ _·_&ht_0_2004_All_Cari_"_·:'1_tuerved_
. ~--·
.._·_c_c._·•_c_,il.,....____,_·- - - - - - ;
 .•

-2-

1. Which of the following statements explain 5. Which of the following can have its shares
why a barter system restricts exchange? traded on the stock exchange?

I. There must be acoi ncidence of wants. (A) A partnership

II. The commodities used are not homo- (B) A private company
geneous. (C) A public company
III. It is difficult to divide certain com- (D) A co-operative society
modi ties.
IV. A rate of exchange must be deter-
mined. 6. One benefit of multinational corporations
to Caribbean countries is
(A) II and III on! y
(B) III and IV only (A) reduction of national ownership
(C) I, II and III only (B) depletion of material resources
(D) I, III and IV only (C) repatriation of profits
(D) employment

2. The functions of a business unit are

7. Which of the following is MOSTLIKELY to
I. . production of goods and services occur when a member of a partnership dies?
II. creation of jobs
III. maximization of sales (A) The business is closed down
IV. education of workers (B) A new partner is brought in
(C) The government takes over the busi-
(A) I, II and III only ness
(B) I, II and IV on! y (D) The business becomes a joint stock
(C) I, III and IV only company
(D) II, III and IV only

8. In a firm with a departmentalized structure,

3. Subsidised meals for employees would fall which department performs the four duties
under which of the following categories? listed below?

(A) Workmen's compensation I. Receiving the goods purchased

(B) Wages and salaries II. Giving a report on the quality of
(C) Duty allowance goods received
(D) Fringe benefits III. Applying the principles involved
in costing goods
IV. Keeping an inventory
4. Private enterprise is run MAINLY to
(A) Finance
(A). create profit (B) Stock control
(B) reduce inflation (C) Purchasing
(C) distribute goods and services fairly (D) Marketing
(D) provide jobs for more people
..
 -3-
.film.2.is based on the diagram below which shows a section of a typical vertical organisational chart
for a manufacturing company. ·

BOARD OF DIRECTORS

MANAGING DIRECTOR

GENERAL MANAGER

. I I
PRODUCTION MANAGER MARKETING .MANAGER CHIEF ACCOUNTANT
.

9. The relationship between the highest level

of management down to the various depart-
ments is known as the

(A) line
(B) rank
(C) .staff
(D) flow

10. The Manager of ABC company has em- Item 11 refers to the following statement:
barked upon sponsoring a school cricket
team in a Caribbean territory. Which re- "The leader deliberately stands back and lets
sponsibility is the company fulfilling? the subordinates plan their own work and
make their own decisions as far as possible."
(A) Its obligation to customers
Its social obligation 11. Which word BEST describes the type of
(B)
(C)
administration referred to in the above state-
Its economic obligation
(D) Its obligation to maximise surpluses ment?

(A) Partici pati ve

(B) Laissez-faire
(C) Democratic
(D) Authoritarian
 -4-

12. Good leadership is exemplified by which of 15. Which of the following features must a
the following activities? simple contract have?··

I. Motivating subordinate staff I. Offer

Il. Providing more goods at lower cost II. Acceptance
III. Giving direction to the organization III. Written
IV. Implementing established plans IV. Consideration

(A) I.II and Ill only (AJ I and II only

(B) I, II and IV only (BJ II and IV only
(C) I, III and IV only (CJ I, II and IV only
(D) n. Ill and IV only (DJ I, II, Ill and IV

13. Which of the following policies adopted by 16. If the sale of goods become void, the
management is MOST LIKELY to ensure
worker morale? I. prospective buyer becomes the
owner.
(A) Employees should take part in II. seller has the right to keep any
· decision-making on an ongoing money or goods which have been
basis since every employee given to him in this transaction.
has duties and responsibilities. III. prospective buyer does not become
(B) Supervisors should make decisions the owner.
when they have been directed to IV. seller must return any money or
do so by the general manager. goods given to him by the prospec-
(C) The general manager should make all tive buyer for the transaction.
the decisions because he is respon-
sible for the performance of all (A) II and III only
employees. (BJ III and IV only
(DJ Decisions made by the top manager (C) I and IV only
and his advisers must be carried (D) I, II and IV only
out by employees as directed to
ensure that there will be no
break-down in work procedure. 17. A contract may be discharged by

I. performance
14. A major role of a trade union is to encourage II. I apse of ti me
III. offer and acceptance
(A) staff to strike whenever they have IV. breach
problems at work
(B) management to pay higher salaries (A) I and II only
and give longer vacations to staff (B) III and IV only
(C) advancement of the welfare of its (C) I,H and IV only
members (D) II, HI and IV only
(0) · • stafftobecomemembersoftheunion

i
-- ""T 'T'll"'\- 'T"Tm ... YT'1V'T" n,. f"'l'C ·'
 -5-

Item 18 refers to the following diagram. 21. The term 'human resources' refers to

(A) materials and goods made by hu-

Fixed factor
man beings
Capital A (B) raw materials used in the manufac-
Land ture of goods
(C) capital invested by shareholders in a
company
(D) persons available for productive and
professional services

Variable factor 22. The supply oflabour is NOT affected by

Labour
(A) migration
The law of variable returns is represented (B) birth rate
in the•figure above. (C) population census
(D) school-leaving age
18. Point A.on the graph represents the

(A) main point 23. What is the MOST LIKELY effect on a

(Bl middle point developing economy when professional and
(Cl average point skilled labour migrate to developed coun-
(D) optimum point tries?

(A) Unskilled labourers can demand

19. A switch to capital intensive methods of higher wages.
production in a country mightin the short run (B) The demand for skilled labour and
result in professional services will de-
crease.
(A) increased unemployment (C) Unskilled labourers can work harder.
(B) increased output (D) Production levels of goods and serv-
(C) reduced output ices wiII decrease.
(D) reduced unemployment

24. Which of the following is the BEST example

20. Which of the following is NOT a natural of capital as a factor of production?
resource of the Caribbean?
(A) Machinery
(A) Gold (B) Shares
(B) Coal (C) Debentures
(C) Bauxite (D) Money
(D) Timber
 - 6-

Which of the following are examples of 29. Which of the following LEAST affects the
25.
extractive industries? location of an extractive i"ndustry?

(A) Proximity to sources of raw mate-

I. Mining
II. Refining rials
Fishing (Bl Availability of an abundant labour
III.
IV. Agriculture supply
(C) Proximity to large shopping areas
(A) I, II and III only (D) The presence of good roads and
(B) I, II and IV only drainage
(Cl I, Ill and IV only
(D) II, III and IV ~rnly
30. The standard of living is measured by

26. \\'.hi ch of the following productive activities (A) the index number
is LEAST LIKELY to be conducted on a (B) the per capita income
large scale in the Caribbean region? (C) the national product
(D) the national income
(A) Packaging
(B) Mining
(C) Whaling 31. Which of the following can be described as
(D) Building a marketing activity?

(A) Ensuring that workers are given

27. To which industry does a firm involved in fringe benefits
food processing belong? (B) Distributing the commodities to out-
lets
Extractive (C) Publicising advertisements fornew
(A)
(B) Manufacturing staff
Constructive (D) Issuing bulletins on staff matters
(C)
(D) Service

32. Which of the following factors will MOST

A cottage industry can BEST be described LIKELY affect a consumer's decision in
28.
as purchasing ham?

(A) a small scale industry centered at I. Taste

home II. Income
(B) an industry with pronounced use of III. Brand loyalty
manual processes IV. Cost of alternatives
(C) an industry where family members
are.involved (A) land II only
(D) an industry that sells to local consum- (B) II and IV only
ers (C) I, II and III only
(D) I, II, III and IV
 -7-
33. Which of the following isLEASTLIKEL Y to 37. A seller in Country Xsenta buyer in Country
be described as good public relations for a Ya Bill of Exchange for $10 000 which he
company? accepted. The Bill was later discounted at a
Bank at a rate of 8%.
(AJ The offering of scholarships
(B) Sponsorship ofasteel band What was the amount paid by the Bank
(C) Reduction in price to retailers subsequently?
(D) Hosting of an annual sport event
(AJ $ 8000

I 34. In which of the following types of trade can

(BJ
(CJ
$ 9 200
$ 9800
I (D) $10080
the hire purchase method of buying be used?

(A) Wholesale trade

(BJ Foreign trade 38. A post-dated cheque is one which
(CJ Import trade
(DJ ·Retail trade (A) was written no longerthansix months
ago
(B) is dated by the businessman to agree
35. Which of the following is NOT a function of with the date of the document re-
the retailer? questing payment
(CJ is dated by the bank dates on the day
(A) Transporting goods to suitable stor- the cheque is presented for pay-
age facilities ment
(B) Providingalocalsupplyofgoods (D) is dated for payment at a future
(C) Preparing goods for resale date
(D) Selling in small quantities

39. Which of the following allows an individual to

36. Before exporter B sent goods to importer A receive cash on demand?
he insured the consignment and paid the
captain of the vessel the charge for carriage. (A) Crossed cheque
Goods were shipped (B) Certified cheque
(C) Banker's cheque
(A) f.o.b. (D) Open cheque
(B) c.i.f.
(C) f.a.s.
(D) c.o.d. .40. Which of the following documents is required
for importing goods for which there are un-
der-quota restrictions on imports?

(A) Bill oflading

(B) Bank draft
(C) Bill of exchange
(D) Import licence

'

I~'- : -'"',..,-------------,-----~JI
 -8-
41. Mr. Jones has several bills of fixed amounts 45. The document given with th~. purchaseofan
to pay each month. His bank manager article stating that it will work for a specified
agreed to pay them month! y from Mr. Jones' period oftime under given conditions is cal led
account. This service, provided by the the
bank. refers to
(A) guarantee
(A) letters of credit (B) warranty
(B) standing orders (C) certificate
(CJ overdrafts (D) proof
(D) acting as trustees

46. Which of the following are the reasons for

42. The MA.TOR functions of a central bank a Government imposing taxes?
are
I. Promoting economic growth
I. acting as the government's bank II. Redistribution of income
II. keeping deposits of all commercial III. Increasing interest rates
banks IV. Improving the balance of payments
III. gi_ving loans to private individuals
and companies (A) I, II and IV only
IV. ·helping to regulate the money sup- (B) I, III and IV only
ply of a country (C) II and III only
(D) III and IV only
(A) I, II and III only
(B) I, II and IV only
(C) I, III and IV only ltem47 is based on the following informa-
(D) II, III and IV on I y tion.

Loleen lives in a country where the follow-

43. The monthly payments collected by an in- ing tax structure exists.
surance company on behalf of its policy
holders are known as TYPE OF TAX %

{A) premiums Stamp Du ti es 10

(B) instalments Capital Gains Tax 12
( C) deposits Corporation Tax 25
(D) endowments Customs Duties 30

44. Collateral is MOST needed when 47. Loleen bought a building and sells it to make
a profit. What type of tax is she required to
(A) taking out an insurance policy pay?
(B) ordering goods from a foreign manu-
facturer (A) Stamp Duties
(CJ · · borrowing from a financial institu- (B) . Corporation Tax
tion (C) Capital Gains Tax
(DJ buying stock and shares (D) Custom Duties

.,.
r------------=~~----_:_....1·•
,.• ...
-9-
48. Subsidies refer to 52. A 'market' in economic terms is defined as

(A) loans given to businessmen (A) a place where tangible goods are
(B) grants made to businesses by gov- bought and sold
ernment (B) a situation which exists when buyers
(C) taxes withheld by government and sellers influence the price of
(D) profits realised from investment goods
(C) a specific place where buyers and
sellers meet
49. Marketequilibrium exists when (D) the business centre of the community

(A) buyers pay reasonable prices for

goods 53. Which of the following are likely to affect
(B) selkrs are satisfied with the price the standard ofliving in a country?
paid for their goods
(C) at the ruling market price, buyers do I. Widespread pollution
not wantto add to the stock of goods II. A low literacy rate
they already have III. A high crime rate
(D) atcurrentprices, the amount buyers IV. Advertisements
·wish to buy equals the amount sell-
ers want to sell (A) I and III only
(B) II and Ill only
(C) I, II and III only
50. Wl1ich of the following features are associ- (D) I, III and IV only
ate.d with perfect competition?

I. Many buyers and sellers 54. Indices of economic growth indicate

II. Few buyers and sellers
III. Freedom of entry into the market I. increased production
IV. Barriers to entry into the market II. higher per capita income
!II. higherunemployment
(A) I and III only IV. improvement in living conditions
(B) I and IV only
(C) II and III only (A) I and II only
(D) II and IV only (B) II and III only
(C) II, III and IV only
(D) I, II and IV only
51. Which ofthefollowingcharacteristicsBEST
describes a competitive market?

(A) Few sellers and many buyers

(B) Production ofalmost identical goods
(C) Difficult entry to new markets
(D) ·Imperfect consumer knowledge of
•
pnces
 - I0 -

The features of a retail outlet are 58. · Which ONE of these methods may govern-
55.
ment use to reduce unemploymentry
I. selling in small quantities to the
consumer (A) Employment levy on firms
II. having many departments (B) Increases in income tax
III. involvement in sole trading (C) Deflation of the economy
IV. sometimes operating with relatively (D) Increased interest rates on bor-
little capital rowing

(A) I and II only

(B) II and Ill only 59. Adverse Balance of Payment problems can
(C) I, III and IV only be corrected by
(D) II, III and IV.only
I. tariffs
II. quotas
56. A government can correct an adverse For- III. devaluation
eign Exchange problem by IV. revaluation

(A) · increasingcustomsduties (A) I and II only

(B) implementing price floors (B) II and III only
(C) ·reducing severance payments (C) I, III and IV only
(D). improvingtherateofinflation (D) I, II and Ill only

Which of the following trading agreements is 60. Which of the following are nationalised in
57.
Barbados promoting when it sells furniture to most CARI COM territories?
Jamaica?
I. Food Production
(A) O.E.C.S. II. Water
(B) CARICOM III. Communication
(C) G.A.T.T. IV. Electricity
(D) N.A.F.T.A.
(A) I and II only
(B) II and III only
(C) I, Ill and IV only
(D) II, III and IV only

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.
1.
-2- ~ - --~-
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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I
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 ·

K
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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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1. When an economist says that a product has 5. A debenture holder is one who
utiiity, he means that it is
(A) has first claim on any profits and is
(A) desirable paid a fixed rate of dividend
(B) very useful (B) must be paid any amounts cviing in
(C) costlytoobtain the following ye"ar
(D) able ro satisr; a want (C) is paid a fixed rate of interest if the
company makes profits
(D) is entitled to a fixed rate of interest
2. Productivity can be measured by whetherornotthecompany makes
profits
(A) Jn2uts
Outputs
6. A partnership that requires additional capital
(B) Revenue can legally do which of the following~
Outputs
(A) Issue bonds
(C) Outouts (B) Issue debentures
Inputs (C) Borrow money from the bank
(D) Advertise shares to the public
(D) ln2uts
Revenue 7. In the formationofacompany, the Memoran-
dum ofAssociation states notonly the name
ofthe company but also the
..). Subsidised meals for employees would fall
under which ofthe following categories') (A) amount of capital to be issued
(B) way the directors are chosen
(A) Fringe benefits (C) dividends to be paid per share
(B) Duty allowance (D) expenses incu1Ted in the-formation u ;·
(C) Wages and salaries the company
(D) Worker's compensation

8. The PRIMARY role of the personnel

4. The MAIN reasons for the existence of the department of a firm is to
public sector are to
(A) compile a magazine highiighting
I. piovide essentiai services outstanding workers
l I. regulate business activity (B) promote recreational activities for
I II. compete with the private sector ·workers
rv. promote economic growth and ( L;
~,

assist employees in understanding

development industrial relations
(D) hire, recruit, train. and motivate
(P..J I, II and III only workers
(B) i, II and l'i only
(C) L III and I\/ only
ff>\
,~, II, III and IV only

CSEC POB June 2007 P1

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9. Which of the following is LEAST likely to 13. Which one ofthe following is NOT a function
result from growth in an organization? ofmoney?

(A) Greaterproductivity .(A) Measure ofvalue

(B) More division oflabour (B) Medium of exchange
(C) Increased communication (C) Indivisibility
(D) Increased capital investment (D) Storeofvaiue

14. What do workers aim to achieve by coilective

10. Which of the foliowing statements BEST bargaining?
describes an authoritarian leader?
I. Improvement and maintenance of
(A) Makingdecisionswithoutconsultation working conditions
(B) Allowing workers to plan theirown rr. Greater opportunities for promotion
work ill. More capital intensive methods of
(C) Consulting those Iikely to be affected production
by the decision rv Education and training foremployees
(D) Willingness to take suggestions
(A) [,II and !Vonly
(B) [,II and lII only
IL Good leadership is exemplified by which of (C) lII and IV only
the following activities? (D) [and IV only

I. Motivating subordinate staff

15. Which of the following features niust a
l l. Providing more goods at lower cost
simple contract have?
Ill. Giving direction to the organization
IV. Implementing established plans
[_ Offer
I I. Acceptance
(A) I, II and Ill only
Ill. Documentation
(B) !, II and IV only
IV. Consideration
(C) I, Ill and IV only
(D) Il, Ill and IV only
(A) I and fl only
(B) rr and rv only
(C) l, lI and JV only
12. Which o fthe fo!lowingmanagementpractices
(D) I, I!, lII and IV
would contribute to the success o fa business?

!. Pricing atn1axi1num mark-up 16. Which of the following practices are

IL Paying attention to the quality ofgoods characterjstic of a free economy?
or services sold
l fl. Cotnmunicating with employees I. Private ownership of assets
IV. Earning maxim um profits forowners II. Central planning
III. Price fixing ·
(A) i and II only IV Freedom to contract
(B) II and m only
CC) {!and JV only (A) I and III only
(D) JI, III and r'I oniy (B) I and IV only
(Cl !land III o'nly
(0) ll and IV only

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 -4 -

The policies ofacompany are formulated by 22. An increase in the productiviry oflabourin the
17.
Caribbean region means that
fr1e

shareholders (A) agreaternumberofthepopulacion is

(A)
managers nowempioyed
(B)
directors (B) in ore factors ofproduction are 3.'v"ail-
(C)
ab ie for production
(D) auditors
(C) both population and the value ofout
put are decreasing
A contract may be discharged by (D) the value ofoutput perrrian is greater
18
than before
L performance
!I. lapse of time
offer and acceptance Which of the following practices may be
Ii L
breach MOST appropriate in solvii1g the
lV
unemployment problem in developing
(A) land II only countries where the labour force is large?
(B) !I{ and IV only
l, ll and IV only I. Greaterproduction through increased
(C)
(D) JI, Ill and IV only labour
II. Increased mechanisa1ion
Ill. Increase in vocation3-l training
The MAIN purpose of production is to progran1mes
19.
IV. Increase in salaries
(A) make profits
(3) provide jobs (A) I only
(C) build more factories (B) I and Ill only
(D) satisfy people's wants (C) !I and !II only
(D) !I and IV only

20. The money used fortheday-to-day operations

ofabusiness is called 24. Which otthe following are functions of the
entrepreneur?
(A) fixed capital
(B) nominal capital r. Providing finance needed for
(C) floating capital production
working capital II Co-ordinating the fac1ors of
(D)
production
lll. Undertaking risks by nnticipating
To which industry does a firm involved in food demand
21.
IV. Ensurlngthat
- workers.are. unionised
processing belong?

(A) Extractive (A) I and II only

(B) !'vf?J1ufacturing CB) II and IV oniy
(C) co'nstructive (C) I, II and III only
(D) L III and IV oniy
(D)

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25. '-1Vhich ofthe fOllcwing isthesimplestformof 29. Which ofthe following practices does NOT
production? result from mechanization?

(A) Subsistence (A) Production is increased

(8) Domestic consumption (B) Goods are produced to a standard
(C) Surpiusandexport pattern
(D) Cottage industry (C) People may be needed for manual
work
(D) The speciaiist becomes more skilled
Prirnary production is concerned with the in his work

(A) distribution ofgoods

(8) provision ofgoods to meet essential 30. The standard o fliving ofacountr~y is measured
needs by the
(C) provision ofrawrnate1ials
(D) manufacture of goods (A) index number
(B) per capita income
(C) national product
27. Which of the following LEAST affects the (D) national income
iocation ofan. ext~active industry'!

(A) Proxi111ity io large shopping areas 3 R. The variables ofa marketing mix can easily
(8) Availability of an abundant labour be remembered by referring to the tOur P's
supply which are:
(C) Proximity to sources ofraw mate1ials
(D) The presence of good roads and (A) Product, price, place. promotion
drainage (B) Product, publicity, purchase. price
(C) Product, prornotion, package, prici.::
(D) Product, package, place, pro1TJotion
23. VJhich ofthe foliovving are disadvantages of
sn1all firms?
32. ALL persons can be called consun1ers because
!. Ernpioyees feel a sense of belonging they
Il. They have unlimited liabilil"f
rIL ft is difficulttoarrange financing (A) use goods
IV. They have personal ties \Nith (B) have wants
customers (C) sell goods
(D) buy goods
(A) I 3.nd Ii only
(B) I and m on!y
IC) I! and !II only 33. Businessmen usually employ ·1oss leaders' to
(J) iII and TV only
(A) give a free gift with each cash
purchase
(B) reclaim losses made in the saie of
goc"'Cis
(C) attract more customers by sei ling a
few items at a loss
(D) promote new products 1n the
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34. Which of the fol1ov1ing must be taken into 38. Which ofthefollmving documents would give
account when packaging goods for retail? title to goods?

[. Cost L
r Bill ofsale
I I. Brand IL Bill ofmaterials
!II. Protection III. Bill ofiading
!V. Attractiveness IV. Bill ofsight

(A) I and Ill only (A) I only

(B) I and IV only (B) Ill only
(C) III and !V only (C) II and IV only
(D) !, ll, Ill and IV (D) IllandlVonly

35. Which of the following contracts must be 39. Whichofthefollowing instrumentsofpayment

rriade by deed? would a firm use to effect the speediest
0
transferoffunds from one country to another"
(A) Billsofexchange
(B) Insurance contracts (A) Cheque
(C) Transferof shares (B) Bank draft
(D) Conveyances ofland (C) Money order
(D) Telegraphic transfer

36. Which of the following is NOT a fonction of

the retailer? 40. A post-dated cheque is one which

(/\) Transporting goods to suitable stor- (A) vvas written no longer than six
age facilities months ago
(B) Providing a local supply ofgoods (B) is dated to agree with the date of
(C) Preparing goods for resale the document requesting payment
(D) Selling in small quantities (C) is dated by the bank dates on the
day the cheque is presented for
payment
37. A' purchase order' is a (D) is dated for payment at a future
date
(A) statement offering to buy goods
(B) notification ofgoods received
(C) statement of debts outstanding 41. The bank service which allows a customer to
(D) request for additional goods make payments by cheques is the

(A) current account

(B) savings account
(C) deposit account
(0) capital account

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42_ The monthly payments collected by an 47. Which ofthe following measures are used by
insurance company on behalf of its policy government to redistribute in~.ome?
holders are known as
(A) Custom duties and levies
(A) deposits (B) Consumption tax and tariffs
(B) premiums (C) PA YE and National Insurance
(C) instalments (D) Excise duties and Value added tax
(DJ endowments

48. Which form oftaxation is imposed on goods

43. Which of the following forms of payment is produced in a country?
legal tender?
(A) Excise duty
(A) Cheque (B) Preference duty
(B) Banknote (C) Excise drawback
(C) 0
Money order (D) Customs drawback
(D) Postal order

49. Which ofthe following are MAJOR functions

44. Collateral is MOST needed when of the Central Bank?

(A) taking out an insurance policy I. Acting as the goverr1rnent' s bank

(B) ordering goods from a foreign manu- II. Keeping deposits ofall commercial
facturer banks
(C) borrowing from a financial institution lll. Giving loans to private individuals
(D) buying stocks and shares and companies
IV. Helpingtoregulatethe money supply
of a country
45. Which ofthe following is legislation designed
to protect the consumer? (A) I, Il and III only
(B) I, fl and IV only
(A) Negative List (C) I, lII and IV only
(B) Hire Purchase Act (D) II, fII and JV only
(C) Customs Ordinance
(D) Banking Act
50. Market equilibrium exists when

46. Export licences are issued mainly to
(A) encourage the local businessmen to
produce more goods for export
(B) indicate to the importing country that
'· the goods are ofahigh standard
(C) enable the government to control the
flow ofgoods being exported
(D) indicate to the importing country the
price at which the goods are to be
sold
•'
(A) buyers pay reasonable prices for
goods
(B) sellers are satisfied with the price
paid fortheir goods
(C) attheruiingmarketprice, buyers do
not want to add to the stock of
goods they already have
(D) at current prices, the amount of
goods buyers v,rish to buy equals
the amount sellers want to se11
r:
!
-8-

51. Whichofthe following features are associated

with perfect com petition? Item 55 refers to the fo 11 owing tab le.
Real Exports Rii:ai lrn ports
y<)•a•
........
L Many buyers and sellers (Sm) fSm)
II. Fewbuyersandseilers -----i
III. Freed om ofentry into the market i991 72 7(J
''
IV. Barriers to entry into the market 1992 83 79
1993 80 86
(AJ [and lII only 1994 95 88
(BJ [andiVonly 55. In what year was there an unfavourable
(C) ll and !ll only balance oftrade 9
(D) II and IV only
(A) 1991
(B) 1992
52. Which ofi:he following characteiistics BEST (C) 1993
describe a perfectly competitive market? (D) 1994

(A} Few sellers and many buyers

(BJ Difficultentry to new markets 56. ff a Caribbean country should devalue its
(C) Production ofalmost identical goods currency, it is MOST likely that
(D) Imperfect consumer knowledge of
prices (AJ its imports would becon1e cheaper
and its exports would become more
53. expensive
Which ofthe fo Ilowing actions ofgovernment (8) its impot1s ·wouid becoine more
is MOST likely to lead to an improvement in
expensive and its exports ·..vou ld
the standard ofliving?
become cheaper
(C) both its i1nports and expotl:s vvould
(A) Abolishing taxes on low incomes become more expensive
(8) Giving tax incentives to business (D) both its imports andexpons would
(CJ Increasing the income tax rate become cheaper
(DJ Printing more money

57. The MAJOR aims ofrhe Eurnpean Union

54. Which ofthe following is NOT a benefit of (E.U .) are free moven1ent of
international trade?
L Goods
(A) Agreatervarietyofgoods is obtained [J. Capital
from overseas. I I 1. People
( 8) Political linksaredevelopedwithother IV. Services
countries.
IC) Tm port restrictions can be imposed (A) I and II only
on foreign it~ms. (B) rand m only
(D) ·. Producers are able to increase their (C) I, II and III only
market size. (D) I. II, III and rv

GOONTOTHENfXTPAOE
•

-9 -

58. Which ONE ofthe following methods may 60. Which ofthe following car\ be classified as
government use to reduce unempioyment? benefits ofnationalisation? I

(A) increase interest rates on borrowing I. Profits will remain in the country
(B) Increase income tax II. Essential industries will be state-
(C) Deflation ofthe economy owned
(D) Employment levy on fin:ns Ill. Employment will be provided for
citizens
IV. The enterprise will have joint
59. Investment can be defined as ownership

(A) a stock of goods existing at a given (A) I, II and Ill only

time (B) I, II and IV only
(B) an addition to the capital stock of a (C) 1, Ill and IV only
country (D) II, Ill and IV only
(C) a stock of raw materials which
have fallen
(D) 'a stock of goods owned by the
governn1ent

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

·.

0
.
-';>< ....~ . . .
•
Principles of Business MCQ 2008.qxd 16/10/08 15:22 Page 1

CARIBBEAN EXAMINATIONS COUNCIL

SECONDARY F.DCCATION CERTIFICATE

EXAMINATION

SPECIMEN
MULTIPLE CHOICE QUESTIONS
FOR

PRINCIPLES OF BUSINESS

READ THE FOLLOWING DTRF.CTIONS CAREFULLY

Each item in this test has four sugg~~t~d amwers lettered (A), (B), (C), (D). Read ea~h item you
are about to answer and decide whichehoice is best.

Sample Item

The money a business receives from the sale

of goods or services isealled its Sample Answer

(A) assets
(B) capital
(C) income

+ +
(D) resources

The best answer to this item is ·'income", so answer space (C) has hccn shaded.

Copyright© 2008 Caribbean Examinations Council.

All rights reserved.

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-2-

I. A system involving the exchange ofgoods 5. Which oflhe following are the functions ofa
depending on the 'double coincidence of a business unit~
wants' i.'known as
I. Creation ofjobs
(A) money II. Education of workers
(B) barter Ill. Maximization ofsales
(C) specialization IV. Production of goods and services
(D) equal exchange
(A) I, II and lll only
(B) I, !land IV only
2. \\/hich ofthe following is1\"0T a function of (C) 1,111 and IV only
money? (D) IL Ill and IV only

(A) Notdivisible
(B) Storeofvalue 6. In which department of a manufacturing
(C) \!Ieasure of value business would you MOST likely find an
(D) Medium ofexchange engineer"

(A) Production
3. From which o fthe following commercial or- (R) Personnel
ganizationsrnight any mernberoflhe public be (C) Marketing
allowed ro purchase shares? (D) Financial

(A) Co-operatives
(B) 'f he Central Bank
(C) PrivateCompanies 7. A hotel gives vouchers for meals to its

+ +
(D) Gov~mmen!ugency cmp loyees. This fonn ofi ncentive is BEST
dcscri bed as a

... Which of the following practices are (A) reward

charactcristi c ofa tree economy? (13) bonus
(C) fringe benefit
I. Private ownership ofassets (D) motivation scheme
II. Centmlplanning
!II. Price fixing
IV. Freedomofcontract 8. James wins a sum ofmoney in a lottery and
decides to invest it in a business. James buys
(A) I and Ill only fruit and se lis them to earn money. In which
(B) I and IV only typ~ ofprodu~tion is he in valved?
(C) ll and Ill only
(0) Hand IV only (A) Secondary
(B) Subsistence
(C) Primary
(0) Tertiary

GO 0'1 TO THFNF.XT PAGF

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-3 -
9. Which of the tollowing exemplify good 13. The purpose of a business plan is to
leaclersh ip?
I. measure the perfonnancc of the
l. \1 otivating subordinate staff business
II. Providing more goods at lower cost II. attract financing to the business
lJL G ivingdirection to the organization Ill. communicate the business ideas to
IV. [m plementing established plans others
IV. provide direction for the business
(A) !,II and Ill only opemtions
(D) [, Il and IV only
(C) I, I[[ and IV only (J\) I and II only
(D) n, []J and IV only (B) I and!Vonly
(C) I, II and III only
(D) II, ][J and IV only
W. An authoritarian leaderisonewho

(A) makcsdccisionsv.ithoutconsultation 14. Which ofthc followingdocumcnts should be

(B) allows workers to plan their own used to ind icatc to a business department that
work supplies of certain goods are needed?
(C) consults with those likely to be
affe\;ted by the decision (A) Invoice
(D) takes suggestions fmm employees (B) Quotation
(C) Stock card
(D) Requisition order
11. l'he workers in a large organization are
dissatisfied with the working conditions.
The trade union representatives' FIRST 15. The advantages which a !irrn may achieve by

+ +
likely action will be to significantly increasing the sizeofits output
are knov,-n as
(A) have discussions with the personnel
otliccr (A) economies ofscale
(B) encourage employees to adopt go (13) risk-bearing economies
slow tactics (C) economies ofconcentration
(C) encourage the workers to take strike (D) effectsoflarge scale production
oction
(D) request a meeting with the board of
directors 16. Which ofthe following should a feasibility
study include?

12. A trait associated with entrepreneurs is I. An overview ofthe business

II. l"he profitablityofthe business
{A) takingrisks IlL The growth potential ofthe business
(13) fearoffailure IV. The family background ofthepartners
(C) acceptaneeofloss
(D) opposition to chang e (A) I and ll only
(B) II and][[ only
(C) I, II and [[I only
(D) l, II and l Vonly

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-4-

17. Which ofthe following situations would 21. "Cap ita[ as a factor ofproduction" refers to
occur if a contract for the sale of goods
becomes void? (A) money that is used to purchase goods
(B) goods that are used to produce other
1. The prospccti ve buyer becomes the goods
owner. (C) assets that are owned by a finn
II. The seller has the right to keep any (D) goods purchased for resale
money or goods which have been
given to him in this transaction.
lll. The prospective buyer does not 22. Primary production isconcemedwith the
beeom e the owner.
IV. The seller must return any money or (A) distribution ofgoods
goods given to him by the prospec- (B) provision of services
tive buyer for the transaction. (C) manufacture of goods
(D) provision ofraw materials
(A) IT and II\ only
(13) Ill and IV only
(C) land IV only 23. Which of the following are features of a
(D) I, II and IV only cottage industry?

L Family help
18. The abbreviation f.o.b. means IL Mass production
TIL Minimal investment
(A) fee on board IV. Production ofexports
(B) freighton board
(C) free on board (A) I and lii only
(D) freeze on hoard (13) land IV only

+ 19, A posh.laled cheque is one which is dated

(A)
(B)

(C)
no later thansixmonthsago
to agree with thedateofthedocumcnt
requesting payment
by the bank on the day the cheque is
24.
(C)
(D)
II and IV only
[(]and IV only

Whichofthe following is NOT a primary

industry?

(A) !\·fining
+
presented fur payment (R) Fishing
(D) for payment at a future date (C) Building
(D) Fanning

2 0. What should a bank teller dowhenacustomer

presents a cheque with a general crossing?

(A) Ask for identification

(!3) Pay the amounlslaled
(C) Requestthatthecheque be deposited
(D) Refer the customer to the drawer' s
bank

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-5-
25. Which ofth~ following actions would allow a 29. Which of the following documents gives the
cigarette m unu fudurer vertical integration of name of the ship and full particulars of the
business activities~ shipment ofgoods?

I. Buying a tobacco estate (A) DillofSale

11. Pure has ing a competitor's cigarette (B) BillofLading
factory (C) Airway Bill
Ill. Fstablishing a retail outlet for (D) Broker'sl3ill
cigarettes
IV. Acquiring vehicles to be used for
delivery of cigarette.~ 30. Which ofthe to Bowing are characteristics of
a 'perfect market'?
(A) land II only
(B) ll and IV only I. There are many buyers and se Hers
(C) !, ll and Ill only II. The buyers arc aware ofthc price of
(D) I, Ill and IV only the goods
IlL The price ofthe goods must be fixed
26. \Vhich ofthe +allowing l.EASTaftectsthe by supply or demand
location ofan industry? IV. There must be several types of the
commodity on sale
(A) Proximity to sourc.es of raw
materials (A) I and II only
(B) Availability ofan abundant labour (H) II and IV only
supply (C) I, 11 and III only
(C) Proximity to large shopping areas (D) II, Ill and IV only
(0) The presence of good roads and

+ +
drainage
31. Which ofthe following BEST describes the
term 'loss leader'?
27. Which ofthe followingar~;: functions ofsmall
finns? (A) An item which thcrctai lcr gives away
to customers
I. The provision ofgoods and services (8) A product which is sold cheaply to
II. rhcotlclingofpcrsonaliscdservices attract customers
IlL rheproduction ofexclusivc atticlcs (C) A good which has no real market
IV. The reduction in the demand for value
l;~bour
{D) A product which the retailer is unable
to locate
(A) I, II and III only
(R) 1, IT and IV only
(C) 1, lll and IV only 32. Which ofthe following is aMAJORfunction
(0) 11, Ill and IV only ofconsurnerorganist1tions?

28. Whichofthefollowingactivities carried out in (A) Providing goods and services tor
a tinn will NOT be under the supervision of consumers
the marketing manager? (B) Educating consumers about their
rights and privileges
(A) Packaging (C) Setting price controls for certain
(B) Advertising commodities
(C) Distribution (D) Acting as price inspectors
(D) Pun;hasing

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- 6-

33. Which of the following BEST describes a bill 37. Which ofthe follow ingcan a government sell
of sale? tu raise revenue?

(A) Anadve1tisement forsaleofa client's I. Shares

property by the bank in settlement ll. Bonds
of a debt TIL Debentures
(B) A notice that a list of items overdue IV. T reasUJ)' Bills
for cu~toms clearance will be
auctioned (A) IV only
(C) A document drawn up by a bus inc.~s (B) I andfVo11ly
to infom1 import control authorities (C) I, II and Ill only
of its export activities (D) II, Ill and IV only
(D) An agreement between buyers and
seller regarding title of ownership
of goods 38. W eallh sel aside for the production offurther
wealth is referred to as

34. A housewife buys meat from a local butcher (A) saving

in her neighbourhood. What type of (B) capital
distribution docs thisrcprcscnt? (C) banking
(D) commerce
(A) A retail outlet
(B) A single channel
(C) A dired channel 39. One of the MAJOR functions of a central
(D) An indirect channel bankistu

+ +
(A) issue notes and coins
35. Which ofthc following is a function of a (R) issue stocks and shares
commercial bank'! (C) acccptdcpositaccounts
(D) make loans and advances
(A) Refusal ofdeposits
(B) LendingurJepositur's fumb
(C) Barring oflong tenn financing 40. Which of the following describes a 'stock
(D) Making the various curriencies market'?

r. A type of warehouse
36. On which ofthe following bank accounts is a II. A placcwherc brokers and jobbers
service fee charged? maybe found
III. A place where shares are bought
(A) Current undsuld
(B) Savings JV. The most perfect competitive
(C) Tenn Deposir market
(D) FixedDeposit
(A) I, II and Ill only
(B) 1,11 and l V only
(C) ll.llland IV only
(D) Jl.llland!Vonly

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- 7-

41. The respons ib iIities ofgovernment in dude 45. Which of the following can be classified as
the "indirect taxation"?

I. preservationoflaw and order I. Tariff

H. encouragement and promotion of II. Land Tax
investment Ill. Sales Tax
I11. provision ofproper infi"a5tructure IV. Inheritance Tax
IV. cstablishmentotbusinessenterprises
(A) I only
(A) I and II only (B) I and !II only
(B) 11 and Ill only (C) II and IVnnly
(C) T, II and lii only (D) IV only
(D) 11, Ill and IV only

46. A tax lev icd in excess ofthe standard rate on

42. A government can protect consumers by
camcd in com cis called
I. enacting laws
(A) surtax
IT. publishing standards
(13) purchase tax
Ill. pros<X:uti ng inrringements
(C) corporation tax
IV. communicatingwith consumerswatch
{D) capital gains tax
groups

(/\) I only
47. Governments establish "'ational Insurance
(B) I, Hand III only
Schemes in order to
(C) Il, III and IV only
(D) I, II, III and IV only

+ +
(A) prevent devaluation of a nation's
currency
43. Which of the following measures may be (B} provide benetits to employees after
used by govemment to control business retirement
activity'! (C) protect employees from victimisation
at the workplace
I. Legislation (D) provide benefits tu employees in the
n. Regulation event of unforseen circumstances
Ill. Valuation
IV. Taxation 48. Which of the following may be used as
indicators of a country's standard ofl ivi ng?
(A) 1I1 only
(B) J and II only l. "'ational income
(C) I, II and Ill only II. Level of taxation
(D) I, II and lVonly Ill. Distribution of wealth
IV. Level ofconsumer;;pending

44. Govcmment'sdeductionsofpartofworkers'
(A) 1 and 11
weekly ormonthly salaries is call cd
(B) I and IV
(C) I, III and IV
(A) income tax
(D} H. Ill and IV
(B) corporation tax
(C) capital gains tax
(D) value added tax

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-8-

49. Gross :'>lational Product may be defined as Hem 52 is based on the following table.
the total goods and services
Payment in Payment out
(A) exported by a country over a
(+) (-)
specified period
$m Sm
(8) owned by a country over a specitied
period
Goods 300 190
(C) imported by a country over a I
Services 170 220 I
specified period Capital 40 130 I
(D) produced by a country over a
specified period TOTAL 510 540 I

50. Which of the tollowing indices is tbc RFST

measure of the economic growth of a 52. The current account balance when the
country? ti gures above are extracted is

(A) Population (A) -$30m

(13) Leve 1ofexports (13) +$50m
(C) Standard ofliving (C) +$60m
(D) Gross domestic product (D) +$110m

53. Which ofthe following would NOT be used

51. \Vhich of the following clearly defines the by the government in an attem pl to decrease
term 'balanceofpaymen!5'? the imports ofa country?

(A) The total monetary transactions of (A) Ran

+ +
a country with the rest of the (B) Quota
world (C) Subsidy
(B) The total value ofall the goods sold (D) Licence
by one country to another
(C) The total value of all the goods
54. A quota can REST be described as a
produced in a country
(D) The total value ofall the goods and
(A) ban on the sale offoreign goods
services consumed by a country
(B) tariffonextraregional goods
(C) restriction on the quantity imported
(D) licence to import unlimited foreign
goods

55. The Caribbean Development 13ank functions

PRIMARILY to

(A) assist Caribbean territorie s in their

economic development
(H) assistterritoriesengaged in large
manufacturing industries
(C) aid territories seeking to develop
their tourist trade
(D) expand cummunicdtion.s among
Caribbean territories

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- 9-

56. Which ofthe following are \-IAJOR economic 59. N AFT A is a region-wide trade agreement.
problems facing many Caribbean countries Whichofthe following groups ofcountries
tuday? ar·e membersofNAFTA~

I High Ieve Is of unem ploymcnl (A) C aribhea 11, Canada, USA and United
II. Adverse balance of payments Kingdom
Ill. Low productivity in manufacturing (B) Caribbean, Mexico. Canadaand USA
IV. Lackofcapital for investrn<:nt (C) Carihbcan,Canada.USAand Brazil
(0) Mexico, Canada, !JSA and United
(A) I and 11 only Kingdom
(B) II and III only
(C) 1,11 and IV only
(D) I, HI and IV only 60. Which of the following are the MAJOR
arguments in favourofforeign investment?

57. The tercn 'economic dualism' defines an I. Reduction oflocal employment

economy in which one sector !I. Provision oftechnical expertise
Ill. F:stabl ishrnent ofmarkets
(A) imports more goods and services that IV. In flow ofcapital
it exports
(H) exports more goods and services than (A) I, II and Ill only
it imports (B) I, II and IV only
(C) is overpopulated while the other is (C) I, Ill and IV only
underpopulated (D) II, III and IV only
(D) is technologically advanced whilethe
other is technologically retarded

+ 5!1. \\1 h ich oft he to II owing does '-JOT enhance

economic growth?

(A)
(B)
(C)
([))
Political im;tability
Foreigninveslment
Improved technology
F.ducationandtraining
+
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOlJK WORK ON THIS TEST.

012400 I O/SPEC2008
Principles of Business MCQ 2008.qxd 16/10/08 15:22 Page 10

CARIBBEAN EXAMINATIONS COU~CIL

SECONDARYEDUCATION CERTIFICATE
EXAMI~ATION

PRINCIPLES OF BUSINESS

SPECIMEN PAPER 2008

Item No. Key Item No. Key

1 B 31 13
2 A 32 R
3 A .B D
4 B 34 c
5 c 35 R
6 A 36 A
7 c 37 D
8 D 38 B
9 c 39 A
10 A 40 D
11 A 41 c
12 A 42 D
13 D 43 D

+ 14
15
16
17
18
19
20
21
D
B
c
B
c
f)

c
A
:
44
45
46
47
48
49
50
51
A
B
A
D
c
D
D
A
+
22 D 52 c
, ~
_j A 53 c
24 c 54 c
25 D 55 A
26
---··
i c 56 c
27 ----+-----___1_\__ _ 57 D
28 i D 58 A
29 B 59 c
:3() ____.] c
· ·--···-------
60 D
 \
,, '
, ;

! t AFFIXSEALHERE t

TEST CODE 01240 [) l 0

FORlVI TP 2008117
CARIBBEAN EXAMINATIONS COUNCIL
SECONDARYEDUCATION CERTIFICATE
EXAMINATION
PRINCIPLESOFBUSINESS
PaperOl -GeneralProficiency
75minutes
( 27MAY2008(p.m))

READ THE FOLLOWING DIRECTIONS CAREFULLY

l. ln addi.tion to this test booklet, you should have an answer sheet.

Each item inlhis test has four suggested ans\¥ers lettered \A), (B), (C), (D). Read ead1 item) 0u ar~
ab0ut to answer and decide which choice is best.

~. On your answer sheet, find the number which corresponds to your item and blacken the space i '" ·. •ng
the same letter as the answer you have chosen. Look at the sample item below.

Sample Item
The money a business receives from the sale
ofgoods or services is called its Sample Answer

(A)
(B)
assets
capital
@®•@
(C) income
(D) resources
The best answer to this item is "income", so answer space (C) has been blackened.

4. Ifyou wantto change your answer, be sure to erase your old answer completely and fill in ye .ir " " "
choice.

5. When you are told to begin, turn the page and work as quickly and as carefully as you can. lfyou cannot
I answer an item, omit it and go on to the next one. You can come back to the harder item late1. Y uur
1r
score~ will be the total number ofcorrect answers.
!
6. · This test consists of60 items. You will have 75 minutes to answer them ..

7. Do not be concerned that the answer sheet provides for more answers than there are items in ti 1i s test

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

01240010/F2008
; ;
 -2-

I. Which of the following is NOT a function of 6. Which of the following is LEAST liko.y to
money? result from growth in an organization'!

(A) Indivisibility (A) Greaterproductiv ity

\B) Store of value (B) More division oflabour
(C) iv1~a.su.r~ ofvulue (<:) Increased communication
\0) Medium ofexchange {D) Increased capital investment

2. In a comperitive market situation, which of 7. Which ofthe following characteristics ot' the
the following is LEAST likely to influence sole trader form of business enterprise is
consumer demand? NOT advantageous to the owner?

\Al Taste (A) Secrecy

\B) Price (B) Unlimited liability
( C) Brand loyalty (C) Ownership ofall profits
\0) • Consumers' income (D) Low operational cost

8. The MAIN purposeofinstalling a suggestion

3. Subsidised meals for employees would fall box in a company is to get workers' view
under which ofthe following categories? about

(A) Fringebenefits (A) each other

(B) Duty allowance (B) other companies
(C) Wages and salaries (C) ways of improving the workplace
\D) Workmen' scompensation (D) ways of improving t:conomic

r
'
conditions in the country

' Private enterprise is runMAINL Y to

9. ln a public limited company, the losso:s are
(A) provide jobs for more people borne by the
(B) distributegoodsandservices
(C) reduce inflation (A) staff
(D) create profits for owners (B) directors
(C) community
(D) shareholders
5. Which of the following are functions of a
business unit?
10. Which of the following is MOST likely'''
1. Production of goods and services occurwh.:namemberof a partnershi1i dies''
ll~- Creationofjobs
IIL Maximization ofsales lA) The busint:ss is dosed down
lY. -. Educationofworkers (B) A new partner is brought in
(C) The government takes O\ er the
\A) !, II and III only business
(B) I, II and IV only (D) The business becomes ajointsrock
(CJ !, Ill and IV only company

. (D) ll, Ill and IV only

f GO ON TO THE NEXT PA.GB

 -3-

ll. ln a finn with a departmentalized structure, 15. J:he condensation of the business plan ts
which department performs the four duties contained in the
listed below?
(A) feasibility plan
l. Receiving the goods purchased (B) marketing plan
l l. Reporting on the quality of goods (C) key note summary
received (D) executive summary
Ill Applying the principles for costing
gcxxis
IV. Keeping an inventory 16. Which ofthe following is NOT a feature ofa
business plan?
\A) Finance
\B) Purchasing (A) Demonstratesaclearcompellingvision
1.C) Stock control (B) Provides clear and realistic projections
tD) Marketing (C) Gives infomrntion about the target
market
(D) Outlines financial institution frcm
12. Pro tit may NOT be the main objective ofa which business may get funding
business which is

(..\ J finding cheaper raw materials 17. Which ofthe following desc1ibesan essential
(Bl increasing the salaries of its feature ofa valid contract?
directors
increasing the price of goods and (A) The offer has been communicated to
services ·the offeree.
(D) expanding factory space to increase (B) A counter offer has been made by
production the offeree to the offeror.
(C) The offer is made in writing by the
offeror.
l3. An entrepreneur may reduce his riskofloss (D) The offer has been accepted by the
by offereeeitherin writing or orally.

\A) planning ahead

(BJ securing bank loans 18. Which of the following are functions of
\C) cleaning offices regularly management?
(DJ purchasing additional fixed assets
I. Co-ordinatingtheworkof employees
II. Delegating work to subordinates
l-1. Cash used to secure a loan at the bank is refered III. Controlling employees and raw
lO .J.S materials
IV. Ensuring that employees join a trade
\f\) coiiaLerai W110n
(B) fixed assets
(C) '·currentasset (A) I and llonly
\D) fixed deposit (B) 1land lll "" ly
(C) I, II and Ill only
(0) II, Ill and JV only

..
 -4-

L9. Which of the following factors prevents an 23. Which ofthe following isa fixeq asset?
cigreement from being considered a valid
>2011tr<:1ct? (A) Bi eye le for private us~
(B) Motorcarforfamily use
1 A\ Offer and acceptance (C) Washing machine for resale
( B) Misrepresentation (D) Motor lorry for delivery of goods
(C) Legal purpose
\1)) Consideration
24. Thete1m 'hun1anresources' refers to

20. Which ofthe following situations would occur (A) materials and goods made by hum'rn
it' a contract for the sale of goods becomes beings
\0id'~ (B) raw materials used in the manufacture
ofgoods
!. The prospective buyer becomes the (C) persons available for productive linJ
owner. professional services
! l. The seller has the rightto keep any (D) capital invested by shareholders in a
money or goods which have been company
·given to him in this transact ion.
Ill. The prospective buyer does not
become the owner. 25. The movement ofeducated, skilled peopk to
IV. Thesellermustreturnanymoneyor settle in other industrialised countries is cal kd
goods given to him by the
prospective buyer for the (A) migration
transaction. (B) brain drain
(C) unemployment
\A) I and I Vonly (D) underemployment
(Bl II and llI only
(C) Ill and IV only
(D) I, II and IV only 26. Which ofthe following is the BEST exam pk or
capital as a factorofproduction?

21. ll1e money used fortheday-to-day operations (A) Money

ofa business is called (B) Shares
(C) Machinery
(A) fixed capital (D) Debentures
(B) nominal capital
(C) floating capital
(D) working capital 27. To which of the following industries .Jues a
firm involved in food processing belun.~'/

22. The factqrof production which earns interest (A) Service

IS (B) Extractive
(C) Constructive
(A) land (D) Manufacturing
(B) labour
(C) capital
(D) enterprise

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2!1. Which ofthe following can be described as a 33. Which ofthe following is NOT a function ot
marketing activity? the retailer?

(A) Issuing bulletins on staffmatters (A) Transporting goods to suitable

(8) Distributing commodities to outlets storage facilities
,. IC\ Pub! icising advertisements for new <Bl Providing a local su!'.mlv of goods
' staff (C) Preparing goods for resale
Ensuring that workers are given (D) Selling in small quantities
fringe benefits

34. The variables of a marketing mix can easily

2i.i. .'\ll persons can be called consumers because be remembered by referring to the four P's
they . which are

(A) use goods (A) product, price, place, promotion

(Bl buy goods (B) product, publicity, purchase, price
(C) have wants (C) product, pr0motiof!, p~ckage. price
(DJ satisfy themselves (D) product, package, place, promotion

JO. Which of the following BEST describes the 35. A court order requmng an employer to
1
tenn 'loss leaders ? deduct money from an employee for payment
ofhis debts is kno\vn as
\A) A.n item which the retailer gives away
to custon1ers (A) demand
1l:l J A pruduct which is sold cheaply to (B) revenue
artractcustomers (C) withdrawal
(C) A good which has no real marketvalue (D) garnishment
(0) A product which the retailer is unable
to locate
\ 36. A post-dated cheque is one which
j '
1 Jl. Which ofthe fol lowing activities carried out in (A) was written no longer than six
a ti rm will NOTbeunderthesupervision ofthe months ago
marketing manager? (B) is dated to agree with the date of the
documentrequesting payment
(A) Packaging (C) is dated by the bank on the day it is
(B) Advertising presented for payment
\ C) Distributing (D) is dated for payment at a future date
lD) Purchasing

37. Oneofthe tvtAJOR functions ofacentral banK

32. \\ hichofthe following isLEASTlikelytobe is to
Jcscribi:d as good public relations for
a company? (Al issue notes and coins
(B) issue stocks and shares
v\) The offering of scholarships (C) accept deposit accounts
(l:JJ Sponsorshipofasteel band (D) make loans and advances
"-------··- \CJ Reducrion in piiceto retailers
~D) Ho~ting ofan annual sport event
 -6-

38. The monthly payments collected by an 42. Governments can infuence businessactiv iry
insurance company on behalf of its policy positively by
holders are known as
(A) reducing taxes
(A) deposits ,_,
fl>\ rPrh icing grants
(B) premiums (C) reducing spending
(C) instalments (D) budgeting fora surplus
(D) endo"ments

43. Whichofthe following measures are used by

J'}. Which of the following CANNOT be used government to redistribute incorne?
as collateral for obtaining a loan from a
financial institution9 (A) Customs duties and levies
(B) Consumption tax and tariffs
(:\) A mortgaged home with insurance (C) PA YEandNationallnsurance
coverage (D) Excise dut~e'S and Yalu~ added t<.LX
(B) An insurancepolicywithacashvalue
(C)' Money in a fixed deposit account
(D) Property not covered by insurance 44. Tax paid on wages and salaries is rd"ecred to
as

40. The MOST important use of collateral (A) excise duty

security to the lender is that it (B) income tax
(C) customs duty
(A) can be sold if the borrower fails to. (D) corporation tax
pay
(B) gives the banker an idea ofthe state
ofthe business 45. Which of the following forms of taxatil>n
(C) establishes the financial position of could be classified as "direct'?
the borrower
(DJ improves the borrower's chance of (A) Excise duty
gening a loan (B) Income tax
(C) Customs duty
(D) Purchase tax
41. A country will restrict importation of
certain items in order to
46. Which of the following is included 111

I. assist local industries. protection of the environment?

II. prevent similar items from being
consurn~d by its citizens. (A) Food legislation
Ill. encourage use oflocal resources. (B) Social insurance
IV. alter the life style ofits citizens. (C) Competition policy
(D) Deforestation laws
(A).. !only
(8) I and Ill only
(C) II and Ill only
(D) II and IV only
•
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~7. Which ofthe following can be considered as 51. Which ofthe following are likely to aftect the
incentives to industries? standardofliving in a country?

Increasing coporation tax L Widespread pollution

Increase in insurance premiums IL A low literacy rate
i I~\
,_ ...._ J !!!. A hinh f"rimP ~t""
- ----e-- ------- ----
The devaluation of the local currency IV. Advertisements

(A) I and III only

.. is. A. country has a favourable balance oftrade (8) II and lII only
when (C) I, II and III only
(D) I, lII and IV only
(A) it sells more than it buys
\8) it buys more than it sells
(Cl imported go6ds are cheaper 52. In National Income Accounting, students'
ID) there are no restrictions to trade grants and retirement pensions are exampks
of

Which ofthe following practices would NOT (A) national income

contribute to the economic development and (8) transfer income
growth ofa community? (C) personal income
(D) disposable income
\A) lncreaseduseofthecountry'snatural
r~sources

Increased importation ofconsumer 53. Which of the following indices is the BEST
goods measure of the economic growth of a
Provision of loans and technical country?
assistance for establishing local
businesses (A) Economic stability
Provision of more infrastructure (8) High standard ofliving
within the country (C) Ghangesinthegrossnational product
(D) Changes inthegrossdomesticproduct

50. To co meet an adverse balance of payments

p0sition, agove111n1ent may 54. The balance ofpayments account comprises

IA) reduce credit I. current account

(BJ increase exports II. total currency tlow
IC) reduce income tax III. gross national income
(D) increase the money supply IV. official financing

(A) I and lII only

(8} II and III only
(C) l, II and lI I only
(D) I, II and IV only

•
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SS. WhichofthefollawingareMAJOR econ0mic 58. The PRIMARY function of the Caribbean

problemsfacingCarlbbeancountries? Basin Initiative is to give concessions on

I. Highlevelsofunemployment (A) traditional products entering the

II. Adversebal.-ofpayments Canadian market
Ill. Lowproductivityinrnanufacturing (B} traditionalproductSenteringthe US
IV. Lackofcapitalfurinvestment market
(C} non-traditional productsenteringthe
(A) land II only US market
(B) lland!Ilonly (D) non-traditionalproductsenteringthe
(C) I, II and IV only Canadian market
(D} I, !I, III, and JV

S9. Investmentcanbedefmedas
56. Which of the following methods may
govemmlontusetoreduceunemploymentin (A) the stock ofgoods in acountry
the long run? (B) additions to the capital stock of a
countcy
W Employment levy on firms (C) theamountofmoneyavailableata
(B) Increases in income"" given time
(C) Deflationoftheeconomy (D) the amount of capital owned by the
(D) Increased interest rates on borrowers government
\

57. The following policies are barriers to 60. .· Whichofthe following can beclassiftedas
international trade EXCEPT · benefltsofnationalisation?

(A) quotas I. Profits will remain in the country.

(B) subsidies II. Essential industries will be state
(C) embargoes owned.
(D) custom duties III. Employment wil I be provided for
citi7.lllls. ·
·N. The enterprise wiH have joint
ownership.

(A} I, II and III only

(B) I, n and IV only
(C) I, JU and IV only
(D) II, IIIandIVonly

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

01240010/F2008

I
I.
 t AFFIXSEALHERE t

TESTCODE 01240010
FORMTP2009108 MAY/JUNE2009

CARIBBEAN EXAMINATIONS COUNCIL

SECONDARYEDUCATIONCERTIFICATE
EXAMINATION
PRINCIPLESOFBUSINESS
PaperOl-General Proficiency
75minutes

I
( 28MAY2009(p.m.))

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This test consists of 60 items. You will have 75 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

3.

4.
Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item you
are about to answer and decide which choice is best.

On your answer sheet, find the number which corresponds to your item and shade the space having
-
the same letter as the. answer you have chosen. Look. at the sample item below.

Sample Item

The money that a business receives from the sale

of goods or services is called its

(A) assets
Sample Answer

@®•@
-
(B) capital
(C) income
(D) resources

The best answer to this item is "income", so answer space (C) has been shaded.

5. If you want to change your answer, erase it completely before you fill in your new choice.

6. When you are told to begin, tum the page and work as quickly and as carefully as you can. If you
cannot answer an item, omit it and go on to the next one. Your score will be the total number of correct
answers.

---= DO NOT TURN TIDS PAGE UNTIL YOU ARE TOLD TO DO SO.

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1. Which of the following types of business 7. S4bsidised meals for employees would fall
environment is MOST typical of the under which of the following categories?
Commonwealth Caribbean area?
(A) Workers' compensation
(A) Corporate state (B) Wages and salaries
(B) Mixed economy (C) Duty allowance
(C) Centrally planned (D) Fringe benefits
(D) Perfectly competitive

2. A MAJOR function of the Public Sectoris to 8. The MAIN purpose of installing a suggestion
box in a company is to get workers' views
(A) inspire competition among about
businesses
(B) serve the interest of the shareholder (A) each other
(C) serve the entire population (B) other companies
(D) ,make a profit (C) ways ofimproving the workplace
(D) ways of improving economic
conditions in the country
3. Which of the following is the MOST popular
type of cooperative existing in the Caribbean?
Which of the following involves selecting the
(A) Service
objectives and procedures for achieving
(B) Fmancial
goals?
(C) Consumer
(D) Agriculture
(A) Planning
(B) Organising
4. Private enterprise is run MAINLY to (C) Controlling
(D) Motivating
(A) reduce inflation
(B) create profits for owners
(C) distribute goods and services 10. Which of the following responsibilities
(D) providejobsformorepeople must be assumed by the management of a
company?
5. The policies of a company are formulated by
the I. Maximising efficiency and creating
surpluses
(A) shareholders II. Maintaining good communication
(B) managers and human relations
(C) directors III. Producing goods of a marketable
(D) auditors quality
IV. Determining dividends to be paid to
6. The PRIMARY role of the Personnel shareholders
1 Department of a firm is to
(A) I only .
(A) hire, recruit, train and motivate (B) I and IV only
workers (C) I, II and IV only
(B) promote recreational activities for (D) I, II, III and IV
workers
(C) compile magazines highlighting
outstanclio&wodc,ers
(D) assist employees to understand
inck 7 Wreletions
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11. A MAJOR role of a trade umon 1s to 16. Which of the following is NOT a feature of a
/ encourage J
business plan?

(A) staff to strike whenever they have (A) Identifies financial institutions from
problems at work which business may get funding
(B) management to pay higher salaries (B) Provides clear and realistic
and give longer vacations to staff projections
(C) advancement of the welfare of its (C) Gives information about the target
members market
(D) staff to become members of the (D) Demonstrates a clear compelling
union vision

12. An entrepreneur may reduce his risk ofloss

17. Which of the following describes an essential
by
feature of a valid contract?
(A) purchasing additional fixed assets (A) The offer has been communicated to
(B) cleaning offices regularly
the offeree.
(C) securing bank loans (B) A counter offer has been made by
(D) planning ahead
the offeree to the offeror.
(C) The offer is made in writing by the
13. Cash used to secure a loan at the bank is offeror.
refered to as (D) The offer has been accepted by the
offereeeitherin writing or orally.
(A) collateral
(B) fixed asset
(C) current asset 18. A contract may be discharged by
(D) fixeddeposit
I. breach
·IL performance
14. The condensation of a business plan is III. lapse of time
. contained in the IV. offer and acceptance

(A) feasibility plan (A) I and II only

(B) marketing plan (B) III and IV on!y
(C) key note summary (C) I, II and III only
(D) executive summary (D) II, III and IV only

15. The MOST important use of collateral

. .1 19. A post-dated cheque is one which
security to the borrower is that it /
(A) was written no longer than six
(A) establishes the financial position of
months ago
the borrower
(B) is dated for payment at a future
(B) improves the borrower's chance of
date
getting a loan
(C) is dated by the bank dates on the
(C) gives the banker an idea of the state
day the cheque is presented for
of the business
payment
(D) can be sold if the borrower fails to
(D) is dated to agree with the date of
pay

;,~
thedon1meutrequestingpayment
.

'
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 ... • •

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20. A 'purchase order' is a 25. Which of the following factors does NOT
affect the supply of labour?
(A) request for additional goods
(B) notification of goods received (A) Migration
(C) statement of debts outstanding (B) Birthrate
(D) statement offering to buy goods (C) Population census
(D) School-leaving age

21. To which industry does a firm involved in

I food processing belong? 26. Which of the following conditions would
constitute a linkage between two industries?
(A) Manufacturing
(B) Extractive (A) The output of one industry of the
(C) Constructive economy becomes the input of
(D) Service anotherindustry.
(B) Two firms manufacture similar goods.
(C) Two firms are responsible for the
22. The term 'human resources' refers to manufacture of different kinds of
goods.
(A) materialsandgoodsmadebyhuman (D) One firm shares the use of machinery
beings with another firm.
(B) raw materials used in the manufacture
of goods
(C) persons availableforproductive and ~7. Which of the following is LEAST likely to
professional services result from growth in an organization?
(D) capital invested by shareholders in a
company (A) Greaterproductivity
(B) Moredivisionoflabour
(C) Increased communication
The money used for the day-to-day (0) Increased capital investment
operations of a business is called

(A) fixedcapital 28. In which of the following types of trade can

(B) nominal capital the hire purchase method of buying be used?
(C) floating capital
(D) working capital (A) Retail
(B) Import
(C) Foreign
24. What is the MOST likely effect on a (D) Wholesale
developing economy when professional and
skilledlabourmigratetodevelopedcountries?

(A) Unskilled labourers can work harder.

(B) Unskilled labourers can demand
higher wages.
(C) Production levels of goods and
services will fall.
(D) The demand for skilled labour and

~
professional services will "
' decrease. ~
:. ' .1
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29. Which of the following must be taken into 33. Market equilibrium exists when
account when packaging goods for retail? /
(A) buyers pay reasonable prices for
I. Cost goods
II. Brand (B) sellers are satisfied with the price
III. Protection paid for their goods
IV. Attractiveness (C) at~ ruling market price, buyers do
not want to add to the stock of
(A) I and III only goods they already have
(B) I and IV only (D) at current prices, the amount buyers
(C) III and IV only wish to buy equals the amount
(D) I, II, III and IV sellers want to sell

30. The PRIMARY function of advertising is to 34. Which of the following factors is LEAST
likely to influence consumer behaviour?
(A) promote brand loyalty
(B) promote public relations (A) Place of residence
(C) communicate information (B) Quality of goods
(D) ensure wider distribution of goods (C) Product price
(D) Brand loyalty

31. The price of an article is usually high when

there is a 35. Which of the following functions is NOT
performed by the stock exchange?
(A) large quantity for sale and few people
wanting to buy (A) Providing a market in old securities
(B) small quantity for sale and many (B) Advertising security prices
people wanting to buy (CJ Examining the standing ofcompanies
(C) smallquantityforsaleandfewpeople seeking a quotation
wanting to buy (D) Providing opportunities for new
(D) large quantity for sale and many companies requiring capital
people wanting to buy

36. Which of the following institutions is NOT

32. In a competitive market situation which of regulated by the Central Bank?
the following LEAST influences consumer
demand? (A) Credit Unions
(B) StockExchange
(A) Price (C) Commercial Banks
(B) Taste (D) Joint Stock Companies
(C) Brand loyalty
(D) ·.Consumers' income

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37. Investment can be defined as 41. Which of the following measures may be
u~ed by govermentto protect consumers?
(A) the stock of goods in a country
(B) additions to the capital stock of a I. Taxation
country II. Label laws
(C) the amount of money available at a III. Price controls
given time IV. Provision of subsidies
(D) the amount of capital owned by the
government (A) I and IV only
(B) I, II and III only
(C) I, II and IV on!y
38. One of the MAJOR functions of a Central (D) II, III and IV only
Bank is to

(A) issue notes and coins 42. Export licences are issued MAINLY to
(B) issue stocks and shares
(C) accept deposit accounts (A) encourage local businesses to
(D) 'illakeloansandadvances produce more goods for export
(B) indicate to an importing country that
the goods are of a high standard
39, A debenture holder is one who (C) enable government to control the
flow of goods being exported
(A) has first claim on any profits and is (D) indicate to an importing country the
paid a fixed rate of dividend price at which the goods are to be
(B) is entitled to a fixed rate of interest sold
whetherornotthecompanymakes
profits
(C) is paid a fixed rate of interest if the 43. Which of the following measures are used
company makes profits by government to redistribute income?
(D) must be paid any amounts owing to
him in the following year (A:) Customs duties and levies
(B) Consumption tax and tariffs
(C) PAYE and National Insurance
40. Which of the following services are provided (D) Excise duties and Value Added Tax
by commercial banks?

I. Accepting deposits from customers 44. Which of the following BEST describes
II. Offering Joans to small businesses subsidies?
III. Acting as bankers to the government
IV. Controllingthesupplyofmoney (A) Loans given to businesses
(B) Profits realised from investment
(A) I andII only (C) Taxes withheld by government
(B) III and IV on!y (D) Grants made to businesses by
(C) I, II and III only government
(D) II, III and IV only

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01240010012009
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45. Governments can infuence business activity 50. Which of the following is NOT a benefit of
by international trade?

(A) reducing taxes (A) A greater variety of goods is obtained

(B) reducing grants from overseas.
(C) reducing spending (B) Political links are developed with
(D) budgeting for a surplus other countries.
(C) Import restrictions can be imposed
on foreign items.
46. Which of the following are reasons for a (D) Producers are able to increase their
govemmentimposingtaxes? market size.

I. Promoting economic growth

II. Redistribution ofincome 51. Which of the following practices would
ill. Increasing interest rates NOT contribute to the economic development
IV. . Improving the balance of payments and growth of a country?

(A) II and III on!y (A) Increased use of the country's natural
(B) III and IV only resources
(C) I, II and IV only (B) Increased importation of consumer
(D) I, III and IV only goods
(C) Provision of Joans and technical
assistance for establishing local
. 47. Which of the following forms of taxation can businesses
beclassifiedas 'direct'? (D) Provision of more infrastructure
' within the country
(A) Excise Duty
(B) Income Tax
(C) Customs Duty 52. \Yhich of the following are LIKELY to affect
(D) Purchase Tax the standard ofliving in a country?

I. Widespread pollution
48. To correct an adverse balance of payments II. A low literacy rate
position, a government may ill. A high crime rate
IV. Advertisements
(A) reduce credit
(B) increase exports (A) I and III only
(C) reduce income tax (B) II and ill only
(D) increase the money supply (C) I, II and III only
(D) I, III and IV only

49. A country has a favourable balance of trade

when 53. Education contributes to economic growth by
ensuring that the workforce is highly
(A) it sells more than it buys
(B) it buys more than it sells (A) mobile
(C) imported goods are cheaper (B) efficient
(D) there are no restrictions to trade (C) classified
(D) structured

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 l. ,.,
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~ 8-

54. The availability of health, education and 57. \\'.hich of the following methods can be used
recreational facilities will determine a by governmenttoreduceunemployment?
country's
(A) Employment levy on firms
(A) quality oflife (B) Increases in income tax
(B) rate of growth (C) Deflation of the economy
(C) standard ofli ving (D) Increased interest rates on
(D) social programmes borrowers

55. Which of the following practices may be 58. Which of the following is a feature of
MOST appropriate in solving the economic dualism in the Caribbean?
unemployment problem in developing
countries with a large labour force? (A) Small farming sector
(B) Rural-urbanrnigration
I. Increase in salaries (C) Urban-rural migration
II. .'Increased mechanisation (D) Large manufacturing sector
III. Greater production through
.increased labour
IV. Increase in vocational training 59. A government can correct an adverse foreign
programmes exchange problem by

(A) Ionly (A) increasing customs duties

(B) I and ill only (Bl implementingpricefloors
(C) II and III only (C) improving the rate of inflation
(D) ill and IV only (D) reducing severance payments

56. Which of the following are MAJOR Which of the following trading agreements
1 economic problems facing many Caribbean is Barbados promoting when it sells furniture
countries today? to Jamaica?

I. High levels of unemployment (A) OECS

II. Adverse balance of payments (B) NAFTA
m. Lackofcapitalforinvestment (C) GATT
IV. Lowproductivityinmanufacturing (D) CARICOM

(A) IandIIonly
(B) II and III only
(C) I, III and IV only
(D) I, II, III, and IV

IF YOU FINISH BEFORE

. .
TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.
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PIUl\C il•Lt:s OF BUSlNF.SS
Pnpc:r Ol-l~1 ,er.llPr otlcl>: I> 'r

.,5 mrtt.iC J

C27 \lAV2010 (p.m.i)

READ THEF OU0\1 /ll'<G 1:-;c,TRt CTIOI ' SCARE I'l:1..,1 Y

nu~ teSl ons.:.ts of60 items. '< .:-1.. vfll ! vc 1S n:.~::::.1 tc. =wer th=

rh i
\C/111r':1-in fhis,cs l uas fou,· s.igge,,l-,J ar:.:rwi- i, lellc-n; d(,\ (Jl), IC), (D) l{eru:h:,
re ,..jyJut to t.1l W"'I' &1:d tl,:cir!e- whi\:lt C'.'IC'lC Ill b::ll'

,lteet. tu:d thcnurn hc1 .vl,1 !i •;011 c,-1>.mcbt:> ,rml?'1tem •..ndsh:l:letl1e,;puv· l•

l
fl,1yut.1, :UL.We:"
fat! s.1me l.;,ttcr as the t9s,v:r you t,uv,: <:hMe.i Lo,,k ;lt lh,. :,:mipl.:
Jt~m below

Tl::~m11ll!:ya b•,s~s s 1ece -.e~ i'roni u,u~l.

t goods o, Se'?Viccs is c ..Ucd its

ll~Ct.
p:tal
I~
(C$()UIC ~S

~be31, .,1swe, ·t.Jthis ittrn1s "incom e'.fi m~w rsp:1ce (C')h sl>e·'i hi
Jed

115WM',Cr.lS ,, .:l,llplett> vbcf.>r c)' lll tlhtl!,O ll 'll"\\ ct, le

I\ kWAfl tlocrum g~fO"

1u1okl nda~C11,',ull;, ,s} 1,,. Hl, r \O

w~,..n~ou1Jr1;;1i !dt, iJce 111 111•-nthcp111iec.n,lw,,,·kns 'l:01u "o
",tM,,..,c.-ron1ccrn ~ ,nt..1thc11exto11~ 'lioqc.11, on. ba kto,l ti.ta11. !tt:
l·r Iota! ru rnlx:ru vorrecl 1ri•we1-s

ro ~() so.
_00 NOT TU:RN '! us 1• \ E -JN A11 \'OU ARE I 01 D
. -· ~-----~-!
( V J',Tiglll '.:!00•.I < uribb~.n•1 "m,1t,,1 ti w ( ou 1<'.•;
.2 All nr.;litsre<:. ,,·cd
 I \\ 1ch ftl: i II , gt,~c1T I l\ull:JJ~ll••f
,. Whit I llui ~ llow n,a Ill NO'T Ult It
l\.1 ina cinenl l I rm•tH,~' S n
WO<l<')

\) Ab mtc ,rated di.ta! ,

A) Jr&vt~bl) n
tll "S • \lllLw.
n, In tJ h w
a.t t!.S
( ,ie11 w,o nh,s.Juc
C) C" 1tcnnl!C, •o • Ill I
D :I. ,:J,u .,fc'\ hn:i
nll levcls nl , 11 agcmcn_
1D1 ca~n1nn p, (4,,::
1:1.,k
Z W,ll~h or 1ltc follo,,111g REST d,-..rnbeo
bar.er?

A) Thcpr~c;;.>ofcx.:h1mge 1uvc..,t 111~ 7. Sele, 1111& th<l ohJe<:IIVCS u,1 !he prn ,,,
t'"i~ 1L._C O(ffl<OJ.cy
fbrad1icHngg,13b i,rcJ,rn:t to ,
HJ P11n:hll..,Dg i;oo<lnml sc,..,u,e~ u,ing
cheque<; lA) pi,ualll1!l
hcc,d :uii.cofg,,.,d :md5el'\l,;c<J "El I org.mi.smg
u~m.» nott·~ uo,lcouts ( C) cOU1Jt1lhn;
(DJ fhce.u.hsngt vi gooJ. w1dscr,'lcC'~ (0 l mnllVIIIID8
,.._ tt :iout th• u1taoftno~c

A 'I. \JORrolc,,fo u ~de ,~uor• "-' n .u-

l ltcpohc:u:sot"., ,m1 1n• ,1rcfonnu!J1ed h> age

"' (A) emrlo)'C:CS 1c1 t,e(,ome members of

Ilic un10H
(A I IWci It.-"'
(!3 l tlin.'<.1,)C,; 1B) c-mplu:,~ "IOJ>tl)'highc"1lane Md
IC) INll'lllSC:S
&1" ~ longer ,•a..--anon:, t" n
(iJ) slwrhDldct, (C) cU'.pluyees 111 •tri\..e w hene""r I c
hjve problem, at work
ro mlvmcc.mcnt of \lie ,. ctfare 11.\
Prive cc:n~rpris.: i, n.n M ~'I.'{,.., mctnbcrs

t \) cicutc:prulil~
Tbe.l\,iA.11' pu.rpo>e ul'u ,WL.u~ ,~ugi; u
(B) rc.1uce inll.io<>n
IC} d1 tnbutc good., und ,er,. ices bot,, u, .a compau) 1 to p.et \\ 01k ••>·vie"
fD) pto\ 1dcJOb~ formore people nbout

{f'\) enchlllher
the l)pc 01 busmc::. c1n1ro111n~nt MOST (D) oUlcrcomp."lla,s
typ1calof1heCoruno11wcalth C11:'ibbc11n is (C) Wct)'s ufinprovins tl•e w kpl -~
er,, ways of lmprm11nll ecm o 1
A) c.,rpurute .iotc conctitlOlb
(B) JT.r"WCconum:,,
C) Cffltrally planned
(0) pert,,c,i) cttn pcllt ,,e

(1(') 01' rr 1 11 If r,. F X 1 PAO

 \•l...al11 rlhmt 1<,,.,1r1,g.,.,,,,""'"'
. 1bi1it,os IC!.JStb,e
c.'Tlcd yu u , ll •\n cntrr:pr u
1 H a I )'' 'J'J
ll. 8.\.1 'I :\g
51Uplu,,n cuul "11.' 1111 \)

' nmram,nggOOdcns.,,,..~~,.. 11(,11 B

hum 111n,Jct: n
n Produc u, G Is )

·~
ll,> ketnnl
CjlttLly
I} '=•n11 gdrvtrlcti\1' nbop,t1dt.:, Thc.M Ullp&. •nseo(
,hru hr Ide,
:o 1hc ,ender u n ...r 1.
! 1ly
sold f •he b,.:
dfVonl>
I,11 nrni i' 0111~
\I -ant,;,
p:, "'"·
Bl gives du, banktr an I > ~

tD) I 11 lll and l\ ,,r hd,u" ncs:, "' lf

) b be., I r=
thcbum,wer
II M:in ,g ru,:ol lnfnrnnu ,n Sy<ie!ll ('1IS)1S ('O J1fOVc.• II "be> ti\\; I
de c I ~ ~ ....
,. mr.g 1oru1

\ Utcl1! ,;QttlpU[e ~'- 1}0~ , gatheJ

mt<'tr. l.iti,,n for "'""' in m:tltin g - c;
•• ·he ,·on ~ns,mon r th" .,
~ori, wllhh1ar1011::muauoo • ,1mi.:11net: 1n th.:
re IC' I •tological bcnoliu gninerl f>y•r
org.miz.ttlt>!l ·l.l1"bcinzJ'Unofa ,, cU \ lea! , ..1ul}'pL<-m
organ.ized llldll.>U)' rn mru"c11 1g pl n
tL"tC of\ m"U!t fact ,rs" n.'ti n H ht. lllC5'S fCJ k~yn~1l.0surn...,:-aar)"
tc,rcduce1:0sl~and,m·•~aserr fi:s (01 .'1ec1HI\ summar~
ma.,ugcn1cncproce,s i:..1" ns,hlcfi 1
11Jont1 (y1 ng. unuclp,u ml( anu
s,:u~fym(l co115lu rn:r n:qwr--ir...-uts I> A ti.."nl ma): r Jtttle---. the uwn IVC

I 11 pr<>hl rv111 ,.. mm t h 1I th:

\ \l<:C.,=.! L p,:ttu 11 ti "I,

B Au, C I Jl:>fl) :.le<:1d,.d 1, exj><.111 c:ar pace
cngin,;:;fro1t1B.'U·b.1,:los 10T11 IWd \Vhicl!of ffi) ucreas,::u ,OIi f u 1r

'! tollo , ng 1. Ule BES m1Jlhud L•f ovcrbc..\ds

illllpo.r._,g th~ c,n~u 1c.1 1 r~=d ,,~
DJ uic ntrodu.:tion
I Au
m:11:I r.,
e, s~B
RJul
D RJSd

\'
 I•

,., Willl:h of'1i<' 101 11ti 11 Zl 1.VJu~ hf

TT':Uth tt11 pr,,,

fcJ!Un' o , •lid
:ucdto (/\)
I'\)
(B) IVt
11 t 1,CJl Jc (C)
D

cc,
I , the
, J
111i:ror
I v,u,ug bv lhe
{Pl
" p

f'c:r ha t~'C!l accepted by tile lJ Prod tll\1ty .. bn~~c-mtA arcd

D)
Cf'tt! I ~ 1" rtbng ()I (fr.11Jy
(A) Il~•A
• uuq,ut,
18 • 1.:un t n:t b\; ch ,r ~dby
(B) I lo!J1UIS
JnpUIS
r t,rcucli
n pc'f,1:mnnc,
Rtven•M!
ITl tars t>l i.mc 1C)

'.., ffc, nJ CL pta• ce l)UIJ'Ul•

I I)) ll!e_!I
(A I antJ ll onl
(Bl lJlAndTVonh
RC'\'i:tlU(' •
<•~) I n b<.d 11 ,rJ
(D) II 111 II IV oz,I 2..a. The tc~ f'lll.rn.,!1ue:$nur1we:r 1e?~r:; l

~ pun:tu.s.: nrdcr , 1 (A) nrntorinband{lovi!sn~• ·l,yhu

1
reir:g'
( ") d ta ,oonl go,><I' (13) I'"-'~"""' JI • 5C<1 mlh:m.-u.ufio:
(U) nouf ,_au O U,.::.S r.:ce I \ cd of~ ods
cbll Olllal nJmg (C) pa,oJ.o.j.L\,u[&ble f.r.p;-oducU\'C':llld
(Cl "a men
{D) :, Jg 10 buy g,in..i ~ pro· ·:-.bh~1l SC:r'\'1CC!t
(D c~ii t.,I ir,,el'1edby~c•hold ,
compa.rt)
V.h .h ol th uh _, ryp.:. of cheque
lows 111 tnd• 1d, rccc e ca,h on
<lan8Dd? l~. Wh.u ,rupacl would an 1riroducl1
rn,·cba11iLAtiuu111i.hc rnxlu~IJO!lpro<C!S
( )p<:11
Cro,;s,:d onlhc,soettty?
C en1fi.:d RaiULeJot,,; foru ti,k,llc:J" rk
Bw~ Iucrca.•<' brain di oti.1 II the cc 1
Rnlu•o pvllu.;on c,f •he • u
t I n~u: cl. tu ,pe,ation.• uuc..,
Q 1bU.llll
tDJ Provide u,, •re Job• fi ,n.,
work<"f

I Ji

.;a. 'a l,.

llf
• 5.
\\ l1kh nfthe following is , product ,
,piJnufacwruig mtlusirv"'
. .
ot the 31. V.1uch of th-e followmg mcasu:'!:$ • BBS T
fort>omblltu::igll!ec,·011ou11cprob"cn i Lile
Cwib~n'>
A) C ~
B v)i(l
(A) lner.:a5e th expc
C Tourist e::.u1. ocn
D Lumber Dccrl!ase l I. expc 1d1 re
lR)
tCllCll'IOD
(C) lncresse the I?, el oibCll:'O'' ~5 trom
Th<' su mlv nf1.1beur 1s NOT a,_""fccrcd by • s\ic-rsea
Dei.:1.ias· ;he le..-c( of'>Cll trotn
1A) n11.;i11uon
{D)
overseas
"
rs) !;lirtl r:ne
(C) populatic-,n ccnsu!\
(!JI s.,hool-leovi.ng:lr(e 32. 'Nh1cb. o( the folio\, mg S"C" ictcnu,Y 1.:. ,,
speci lie pnxlucer's good,;·>

'l\'hich o[tli.., 1nJ10,\·ing .,an be d"scribed ru.a lA) Lube!

rearkeu ng ,:,. ci v, r:- (BJ Brc1nd
(C) ?:nc:nt
(A) Eosurir.g that workers are given fringe (D) Copyright
~,.nctits
(Bl r:1\!llhUPJl g COn1.."tlCxiities to out!elS
33 Whi1,;h ofllle fo[lov• ll1~ b ]':OT .1 li.utC11Cn ot
lC) Pu' hcising 11dverrisements for new
i.taff lhe reu,iler7
(D) l6s1111.1~ ht11leuo1< ~n sta L'fmatte-rs
(A) Sellingin ;m:tll qua, lilies
(B) Prepnringgovds forre:-ate
(C) Providinga l~ul!,urply ofgcocL
l~ fu which oftre ~ol'o\\c,ng ;:ypes c:,ftr:idc can
(D) 'Trnnspoui11!!, gooJs to ,1.111 bl
thehire1,w • ...,,:m.:tbod oibu:, ingbeused?
storage fa.ci.hties
(A) \Vlnl snle tradi!
CB) ore1gp • 1 le The market ~lrw:tun.: when: a fc,, tn '°'
(C) 1.mpurtJ o,. 3-1.
douiliiate lhc mnrket i!> r<"ferro,;J t,, as
(1)) l<.i=wu rra,ie
(A) .t ca1"tel
lO ih<~l'Rl'-A. ~y f •Lil tiou oti.dvcrt1s1ng
' • • 1s
• to (LI) anK•nr,roly
•u-u-:
(C) anoligopt>I:,
(A1 p II lr.b tD,l a prefo.:1 111.1 ket
,d <>y.tlty
(13 pr I •t, V,.
IC: n.lul IOI\:,
re w n
DJ fl.intlltliOil
r istr,bu1•.-:i1of~ci<Jds
 Wl1ich .,1 I I , foll m
rs tr. Jone., hns ,cv :ral blh1offi xcd ,unou,ttis iO NOT oc rcgL1lutcd
5
to pa:, each month. Hts bank mnnagc
agi ·:d\c, :, ti em mo titl;, fri>1U Mr Jone • (/\
'lccounl I b1 service pro, ,Jed bv the 1B)
bn 1'<, 1s rc:fc1red 10 1~ • ,,C)
(IJ) Jo111t 1ockC01TP::m ~5

u\:Un' as trus cc
standing r&r V. l i.:h of the I l1ov.1fl
\cttcrofc1e dit 11,overun1enl ,rni:osmg
c,vcrdratt 41
h1crc:1s1ug interest r •e
1 Rcd1s1nb111.io11 f n ...ome
\V .1,ch o"'the following c in b,.we its sh res 11. J>r,,111011J1;,;ec om1cgr wt..
36
tralted 011 · he stock ex.:hange'l IJI ftt1rro,U1g the bJlll .:co pa
1V.
A) A partnr:rs hip l , lI ,u1d IV only
(B) A pubhe comp.lIIY (A)
l I II nnc.H \' ,n y
lC) A pri\'utecom pail) (B)
11 md !il on y
(11 A co-opP.rat1v c ~oc1e:; (CJ
(D) lll '-nd I\' 0 111)

One of the MAJOR rim uoos ot a .::cnu:ul

Go,·crome n·~c 10 mfucuceb ismcs ,
benklSlO -42.
posin~elyby
( A) ,~sue l}()ll,:l,!lfld CO IJ) ~
(B) 1 ucstock, and shllfl!s (A\ reu11ci11g11J7.e-.i
(C) .,cccC'l depos1tucco unts 03) 1edu.."lllggrunts
(D) makelOa.'lS llildad\ 31....eS , C> rcciic:n~i;;,enduis
(D, bu.!g.cnn~ for ni.1 :-p\u.s

Tom lllVeblS hlS ¾\V'Jl8S b) buyingsh1u·es in(\

con party Fromthhinvestr,1e111Tc roe:-.pects fa.'< patd on,.., ag:!5 a::i,\ $al11r1cs 1, refdI
43.
W JVC as
f A' prc,fil, (A) ., exc1,edut)'
13) U1ll,1L'e>l (B) u1t·,.in,~ tax
(C) r vc11Ue (C) custnrr:sd1tt;,
'D) clivicl'!Dds (D) co ranoo t3

3 ln"c tmentc1uib edcfincd 1s

m J counrcy
A
(B cap l 11 sto k of a

t( ) m, nc:y avtu lublc nt a

J.)) tal wn d by the

 • -
I •

41/ rt,e bu> ll)8111Jcl eUtn •01 goO<Uand

tunon •c ,, tnc,ls~llcd
c courage lo,.-al businesses to
,,roduce more goods ror expon
(A/ b-.ilaru:c a rr.ide
J;cat.: 101.bem1po1tmgC(>Untry that
B) lflll!fl"' I 1 ll U'llde
tl'lfl ~ood!i are of" hlgh <itandard (lj bahmceofpll}'lr.en
~1 .Ille go.,,cmmerntocontrol the flo,,
{D) in'l!l!l.llIOnnJ:narkc:mg
,,fgood., bemgex.porLeJ
n ind.•,~ate10the11.1f'(1rt1nl!\counll) lhe
pnce at which U,c i.100'1~ .t.re to bt.> 50
sold
1 tn(1 ea•t'<i pro ucncm
II haj!het unmip.oyuicn•
11. ,l' 1•'•he lol owing forms -,f taxnuori IIT higher per cap,: 1 u .• omc
ccch,-1fi.?(1t1s · direct.., IV 11npr n:mcnt In mgco "
=-xc:-eduty A) land lil only
B lncomi: 1ax hi II ~nd Hf onl)'
C) CU5'0m,duty c,
[ I
' 11 ,d V onlv
l'urcbasc tl.'t rv· n LU and rv nl
•
S b • ·~T>!fe1 lo Wh,~!iof c ,, 'lng 11:rl_vro,.wc,;
-s:ancl.,rd nl, , S r-1 .. wnr ?
.;rant.,; gn en b_, ,;o, ca urncnl
t •l<•·sv.ul ho\tlb> government 1 \VH!.:,q,n:.,Jp(.1;'01,_uco
lO n:;tz:iven1osmstlbu~u1c.s.1es 11 \lo 1 1wi,cy.-.ic
1 fit!'reah,cd trorn uwcstrm·nt tl! Ahogl, nmcr c
l\ \ ~

"hi '" ,j,~ ollo

11i:r:1e4S1,,11:,nrew..:db, lnnJn
i"U ::nuno,,110,cd1>tt1but.-ir,cmn:e7 n I 11.,,ll
C'I I u
(A C-., t m I "' a..~, vie> I. I I 11
tS <.:.on~arop111>n a.~ u.: J ta..,n,
J PA I nridNt ,...,tn~ur•ru:o
l"'l) F • u.c.<.lut. ...._ and val 1c: .id.JU..., "12

t ,.a r;un,bl b~I nee (lf'ld l '

 .s.
u,i: 1 UowU\QUfl!,llltution.; would
\'v hiClt -,f
~J. \\t,, ~ntU1• r,,l10\\i11g1mh(CS1 thcRT:ST :e d,sp\\t.: among b~111\1ia prcducing
1011 II
mc4Sur~ of Ilic euonom,c °""'''th of 11 countries or the Cftnb\.e,m end Central
COUJ1U)'• ·\nicnrn ovc:T preferentl al ••~«eeme:nt 111 ~
. ) 13':cmoou, ~11tbilll)
l:'.uropoan ,~ommU111ty'I

. l
')
lhgh ,UlJULu<l\lll1vl11g
Ch lfl,i;~8

p11'l<lua
in th,: sr-os~ n..l,.I tonal
IA t
\B)
Wor:a Tn1deOrgaru:,uiou
C.mbt-c1U1Devcluvm"11tB•mk
(C) CAKirOM Single ~•arkct II.Id
(t \ l h ,n cs in the: gross uome,tic
F.coo•>llll
produe:t (fl) Qrgamznuun ol1'drolcurn E~Jll41ll,;:
C ..a111r,cs
S4 A •o, '1Um<:nt.MCO=<.."t<lt11W\1!1'Clorcign
i:xcbllngc prob1:mb>
f be purpo.-.: o, C1\R1COM is to
58
(A) 11nplem.:nm11!,pncc {loon, encourage the: l!Urt~fer of·ecl.nolOQ'
(R) ,IICa::<S.iJ ng Cll~l()tQ., du11~-s
w1thmtt.ercsion
(C) 1mr,n Mng 11 •ni1rofinflatinn
,tllo\\ rru:·mber ,tate., tocoll:ib.:mttc
(D) rcdu, 111 ''"•..!rancep.t)IJl~nts (B)
(C) a.Ito-, tor unrcsu ,cu:u movemcntuf
per;;ons r.mnn~ the trmtonl!"
l,lh1c\J ol lhe follc, ... mg _,,., \l.~JLlR (I)) fostL"!" intcrregi<Jnal trarle and
C0trL"1Qn~I \/\Ce-,
~r.:onn,mc r,robkrns fllcmg Carlhn~an
c(Jllllt.1e~

• l Ilg!: •c~i:bofunempl~m ·UI 59 Wlm;hofthe 10,•l" JU>/ n1c1r.ooscllnt-.•t:3Cd

11 <Iver..<: bolauceofpayrr, ,ni.- l ) go, c,urn-:nt r. ' lu,:c m:employment"
.II Lack u1c:1p,1.1l for Im :~u:,.,n1
I La,wproducuvn) mruu1ufucturi11p; lA1 lm:reas¢., 111 m~mnt.: la."
(B) l>c:Jlannnofl.heeoo::iomy
A I and Jl ,,,I" t C) Errrk>)menllevy "n fum5
m .I nJ Ji OI' ( 0'1 l11.:rca'4<.I Ullt.:ft!Slmtc, l•:l 1'0m1'1 mi
() l, ti ru1, V onl)
tJ) l, Ji 1n, I\
60 \\ \uch,,flhc ~,•l1owing1J·.1wn~ugi,:,cmcnl.,i,
8111 b.,.to~ r1omnung whenit•~ll,;funut.:relO
•Vil!.h or th~ follo\\ 111g BJ:.<: I oulhnll~ 1h11 lllll'UIIOl'l
ob c,c;u,·-, o rhc lnmr-,\meracao n~vdop•
IYnl 13ack" v\) OECS
1B) C.ARlCO'il
rAl ?re,,. ,do:. s11m.iu:es 1o pro,luc·.:rs tC\ GAIT
~,w.bh~hc:5 1mpon and expo L \l)) '1,\FT A
regultu 111r., in Omhb.:an c,,untn,s
,nu <;C:..i I ll!ldtng I •r developing
counmc5 to ,,...,.1 in n1,1r1cuhur1:
nn,1 oui ism
I~ llf,.r loens incl n;s•st •nee in
·arrvm1: (J11t res~1d1 to m1prove
:e" un1ry's<>VC1"JII wclf.,11:

I \ lU fl",lSH \l'f.F<JRE TIMI•" IS t 'i\ l l ~~I>. c,u LC-I-.\ <.tl'R \\<ORK OJ\, Uh IJ'' r.

:;l. "l c:.

 ,
-2-

Which of the following is NOT a function of 4. Ip a public limited company, the losses are
money? borne by the

(A) Indivisibility (A) staff

(BJ Store ofvalue (B) directors
(C) Measure ofvalue (C) community
(D) Mediumofexchange (D) shareholders

2. Which of the following are functions of a 5. Which of the following types of business
business unit? environments is MOST typical of the
Commonwealth Caribbean?
I. Creation ofjobs
II. Education of workers (A) Corporate state
III. Maximization of sales (B) Mixed economy
IV. Production of goods and services (C) Centrally planned
(D) Perfectly competitive
(A) I, II and III only
(B) I, II and IV only
(C) I, ·m and IV only 6. Which ofthe following responsibilities MUST
(D) II, III and IV only be assumed by the management of a
\ company?

3. Which of the following characteristics of the I. Producing goods of a marketable

sole trader form of business is NOT quality
advantageous to the owner? IT. Maximizing efficiency and creating
surpluses
(A) Unlimited liability III. Determining dividends to be paid to
(B) Low operational costs shareholders
( C) Ownership of all profits IV. Maintaining good communication and
(D) Rapport with customers hnman relations with staff

(A) II only
(B) II and III only
(CJ II, III and IV only
(D) I, II, III and IV

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Item 7 refers to the diagram below which shows a section ofa typical vertical organizational chart
for a manufacturing company.

[joARD OF DIRECTORsl
I_ MANAGING DIRECTO~

GENERAL MANAGER

[ PRODU<;:TION MANAGER ] MARKETING MANAGER [QnEF ACCOUNTANT

7. The relationship between the highest level of

management down to the various departments
is known as the

(A) line
(B) rank
(C) sfuff
(D) flow

8. Setting objectives and the procedures for 10. The PRIMARY role of the Human Resources
achieving goals are referred to as Department of a firm is to

(A) motivating (A) hire_,, recruit, train and rnotivatc

(B) controlling employees
(C) organising (B) promote recreational activities for
(D) planning employees
(C) compile magazines highlighting
outstanding employees
9. A MAJOR role of a trade union is to (D) assist employees in understanding
encourage industrial relations

(A) staffto become members oftheunion

(B) staff to strike whenever they have 11. Which of the following organizations is
problems at work LEAST likely to use a Manangement
(C) advancement of the welfare of its Information System?
members
(Dj management to pay higher salaries (A) A department store
and give Ianger vacations to staff (B) The National Bank
(C) A shoe-shine shop
(D) A beauty supplies outlet

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12. Which of the following are functions of the 16. An overview of a business plan is contained
entrepreneur? in the

I. Providing finance needed for (A) feasibility plan

production (B) marketing plan
II. Co-ordinating the factors of (C) key note summary
production (D) executive summary
III. Undertaking risks by anticipating
demand
IV. Ensuring that workers join a union 17. Which of the following factors prevents an
agreement from being considered a valid
(A) I and II only contract?
(B) II and IV only
(C) I, II and.III only (A) Consideration
(D) I, Ill and IV only (B) Legal purpose
(C) Misrepresentation
(D) Offer and acceptance
13. Cash usell to secure a loan at the bank is
referred to as
18. The monthly payments collected by an
(A) fixed deposits insurance company on behalf of its policy
(B) current assets \ ho Iders are known as
(C) fixed assets
(D) collateral (A) deposits
(B) premiums
( C) instahnents
14. Which ofthe following situations illustrates (D) endowments
entrepreneurship?
19. Which of the following desclibes an essential
(A) A secretary who uses a computer feature of a valid contract?
applicationtodoherjob
(B) Afarmerwhousestheforktoplough (A) The offer has been communicated to
his land the offoree.
(C) An assistant who developed a (B) The offer is made in writing by the
software application for his job offeror.
(D) An employee who goes to work on cc) A counter offer has been made by
time and does his work well the offeree to the offeror.
(D) The acceptance is made in writing to
theofferor
15. An entrepreneur may reduce his risk ofloss
by
20. A post-dated cheque is one which
(A) planning ahead
(B) securing bank loans (A) is dated for payment at a future date
(C) cleaning offices regularly (B) 'was wlittenno longerthan six months
(D) purchasing additional fixed assets ago
(C) is dated to agree with the date ofthe
document requesting payment
(D), isdatedbythebank'sdateontheday
the cheque is presented for payment
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21. ·The money used for the day-to-day 26. Which of the following factors does NOT
operations of a business is called affect the supply of labour?

(A) fixed capital (A) Migration

(B) nominal capital (B) Birthrate
(C) floating capital (C) Population census
(D) working capital (D) School-leaving age

22. Which of the following is LEAST likely to 27. Which of the following is a product of the
result from growth in an organization? manufacturing industry?

(A) Greaterprodnctivity (A) Gold

(B) More division oflabour (B) A car
(C) Increased communication (C) Lumber
(DJ Increased capital investment (D) A house

23. WhatistheMOSTlikelyeffectonadeveloping 28. Which ofthe following can be described as a

economy when professional and skilled labour marketing activity?
migrate to developed countries?
(A) Issuing bulletins on staffmatters
(A) Unskil!edlabourerswillworkharde~ (B) Distributing commodities to outlets
(B) Unskilled labourers will demand (C) Publicising advertisements for new
higher wages. staff
(C) Production levels of goods and (D) Ensuring that workers are given
services will decrease. fringe benefits
(D) The demand for skilled labour and
professional services will
decrease. 29. The PRIMARY function ofadvertising is to

(A) communicate information

24. In the Caribbean, many people are hired for (B) promote brand loyalty
sugarcane farming and veiy little equipment (C) ensure wider distribution ofgoods
isused. TitisindustrycanBESTbedescribed (D) promote public relations
as

(A) labour intensive 30. Which ofthe following market situations is

(B) capital intensive typically found where there is alargenumber
(C) having low capital input ofproducers and consumers 0
(DJ having high capital input
(A) Imperfect market
(B) Perfect market
25. Which ofthe following factors ofproduction (C) Monopoly
ea!11s interest? (D) Oligopoly

(A) Land
(B) Capital
(C) Labour
(D) Enterprise

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31. Which ofthe following characteristics BEST 36. ~f 01n m vests his savings by buying .shares in a
describes a perfectly competitive market? company. From ibis investment, Tom expects
to receive
(A) Fewsellersandmanybuyers
(B) Difficult entry to new markets (A) profits
(C) Production ofalmost identical goods (B) interest
(D) Imperfect consumer knowledge of (C) revenue
prices (D) dividends

32. The price ofan item is usually high when the 37. Which of the following are responsibilities of
numberof people wanting to buy it is commercial banks?

(A) large and the quantity forsale is small I. Controlling the supply ofmoney
(B) large and the quantity for sale is large II. Offering loans to small businesses
(C) few and.the quantity for sale is small III. Accepting deposits from customers
(D) few and the quantity for sale is large IV. Acting as banlcers to the government

(A) I and II only

33. Which ofthe following is NOT a function of (B) II and III only
the retailer? (C) I, II and III only
(D) II, III and IV only
(A) Selling in small quantities
(B) Preparing goods for resale
(C) Providing a local supply ofgoods ~8. One of the MAJOR functions of a Central
(D) Transporting goods to suitable storage Bank is to
facilities
(A) issue notes and coins
(B) accept. deposit accounts
34. Whichoft.hefollowingMUSTbetakeninto (C) issue stocks and shares
account when packaging goods for retail? (D) make loans and advances

I. Cost
IL Brand 39. Investment can be defined as
III. Protection
IV. Attractiveness (A) the stock of goods in a country
(B) .additions to the capital stock of a
(A) I and III only country
(B) II a.-id IVoniy .-{C) the amount of money avaiiable at a
(C) III and IV only given time
(D) I, II, III and IV (D) the amount ofcapital owned by the
government

35. Which ofthe following can have their shares

ti:aded on the stock exchange?

(A) co:operative societles

(B) Private companies
(C) Public companies
(D) Partnerships

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40. Which ofthe following institutions are NOT 42. The term 'subsidies' refers to
regulated by Central Banks?
. (A) grants given by government
(A) Credit unions (B) taxes withheld by g,ovemment
(B) Stock exchanges (C) loans given to small businesses
(C) Commercial banks (D) profits realized from investment
(D) Joint stock companies

43. Which ofthe foll owing measures are used by

41. Which of the foll owing graphs shows government to redistribute income 7
regressive taxation?
(A) Custom duties and levies
(A) (B) Consumption tax and tariffs
(CJ FA Y--G an<l11alionain1::,u1an~e
(D) Excise duties and value added tax
O/o.
of
Tax
44. Tax paid on wages and salaries is referred to
as

0 (A) income tax

(B) corporation tax
(B) (C) value added tax
(D) consumption tax
\
%
of Which ofthe following is NOT regarded as a
Taxf--~--~~~~~~- 45.
role oftaxation?

(A) Raising revenue for government

0 Income (B) Influencing the distribution of inc~mes
and wealth
(C) Influencing total expenditure on
(C)
goods aod services
(D) Influencing the investment decisions
% of publicly owned enterprises
of
Tax
~-.

46. Which of the following forms of taxation can

be classified as 'direct'?
Income
(A) Excise duty
(B) Income tax
(D)
(C) Customs duty
(D) Purchase tax
. % ""

~
of ""
Tax

0 Income

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47. \Vhich ofthe following institutions is involved 51. Which of the following is "10T a benefit of
in protecting the consumer? international trade?

(A) Bureau of Standards (A) Political links are developc,"d with other
(B) Forestry Department countries.
(C) IntemationalMonetaryFund(IMF) (B) Producers are able to increase their
(D) Natural Resources Conservation market size.
Authority (NRCA) (C) Agreatervarietyofgoodsisobtained
from overseas.
(D) Import restrictions can be imposed
48. A government can correct an adverse on foreign items.
foreign exchange problem by

(A) implementing price floors 52. Export licences are issued MAINLY to
( B) increasing customs duties
(C) reducing severance payments (A) enable the government to control the
(D) improving the rate ofinflation flow ofgoods being exported
(BJ encourage local businesses to
produce more goods for export
49. Which ofthe following are UK.ELY to affect (C) indicatetotheimportingcountrythat
the standard ofliving in a country? the goods are of a high standard
(DJ indicate to the importing country the
I. A high crime rate price at which the goods are to be
II. A low literacy rate sold
\
III. Widespread pollution
IV. Poor advertisements
53. A country has a favourable balance oftrade
(A) II and III only when
(B) II and IV only
(C) I, II and III only (AJ it buys more than it sells
(D) II, III and IV only (BJ itsellsmorethanitbuys
(CJ imported goods are cheaper
(DJ there are no restrictions to trade
50. Which ofthe following practices would NOT
contribute to the economic development and
growth of a country? 54. The buying and selling ofgoods and services
among countries is called
(A) Increased importation ofconsumer
goods (A) balance of trade
(B) Increaseduseofthecountry's natural (BJ international trade
resources (C) balance of payment
(C) Provision of more infrastmcture (D) international marketing
within the country
(D) Provision of loans and technical
assistance for establishing local
businesses

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55. Which of these methods can a government 59. Which of the following are MAJOR
use to reduce unemployment? arguments in favour of free trade?

(A) Increases in income tax I. Protectionism

(B) Deflation ofthe economy II. Trade specialization
(C) Employment levyonfums III. Increase in world output
(D) Increased interest rates on borrowing IV Comparative cost advantage

(A) I and IV only

56. To correct an adverse balance of payments (B) II and III only
position, a government may (C) I, II and. III only
(D) II, III and IV only
(A) reduce credit
(B) increase exports
(C) reduce income tax 60. Which of the followmg countries are NOT
(D) increase the money supply members of the Organization of Eastern
Caribbean States?

57. Whicnofthefollowingtradingagreementsis (A) Anguilla, Grenada

Barbados promoting when it sells furniture to (B) Antigua and Barbuda
Jamaica.? (C) Barbados} Jamaica
(D) Dominica, St. Lucia
(A) CARI COM
(B) NAFTA
\
(C) GAIT
(D) OECS

58. Which of the following practices may be

MOST appropriate in solving the
unemployment problem in a developing
country with a large labour force?

I. Increase in salaries
II. Increased mechanisation
III. Increase in vocational training
programmes
IV. Greater production through ...
increased labour

(A) Ionly
(B) IandIIonly
(C) II and III only
(D) IIIand IV only

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

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C:ANDIDATE-...: PJ,EASE NOTE! -

PRINT your nanie on tbe.Uil~ .belo"'. and retQm

th&· booklet with yOur aaiw~ sheet.· Failure-to
do1omay,...!'ltln4~ualltl""don; TEST CODE 01240010
..
FORM TP 2012108 '--~~~~~-'--~~~----'
MAY/JUNE 2012

CARIBBEAN EXAMINATIONS COUNCIL

SECONDARY EDUCATION CERTIFICATE
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01 - General Proficiency
75 minutes

( 25 MAY 2012 (p.m.) )

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

I. This test consists of60 items. You will have 75 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

3. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to answer and decide which choice is best.

4. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen.. Look at the sample item below.

Sample Item
The money that a business receives from the sale
of goods or services is called its Sample Answer
(A) assets @@•@
(B) capital
(C) income
(D) resources
The best answer to this item is "income'', so answer space (C) has been shaded.

5. If you want to change your answer, erase it completely before you fill in your new choice.

6. When you are told to begin, turn the page and work as quickly and as· carefully as you can.
If you cannot answer an item, go on to the next one. You may return to this item later. Your
score will be the total number of correct answers.

DO NOT TURN THlS PAGE UNTIL YOU ARE TOl,.D TO DO SO.

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Copyrl&ht C 2009 Caribbean Examinatjons Council

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 -2-

1. Barter is BEST described as a the 4. Private enterprise is run MAINLY to

(A) process of exchange involving the (A) create profits

use of money (B) reduce inflation
(B) purchase of goods and services (C) distribute goods and services
using cheques (D) provide jobs for more people
(C) exchange of goods and services
without the use of money
(D) exchange of goods and services 5. Which ofthe following is NOT an objective
using notes and coins of the public sector?

(A) Maximizing profits

2. Which of the.following is NOT a function (B) Providing essential services
of money? (C) Regulating business activity
(D) Promoting economic growth and
(A) Indivisibility development
(B) ' Store of value
(C) Measure of value
(D) Medium of exchange 6. The PRIMARY role of the human resource
department of an organization is to

3. Which of the following types of business (A) promote recreational activities for
environment is MOST typical of the workers
Commonwealth Caribbean area? (B) hire, recruit, train and motivate
workers
(A) Corporate state (C) assist employees in understanding
(B) Mixed economy industrial relations
(C) Centrally planned (D) produce magazines highlighting
(D) Perfectly competitive outstanding workers

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Item 7 refers to the following diagram which shows a section ofa typical vertical organizational
chart for a manufacturing company.

BOARD OF DIRECTORS

MANAGING DIRECTOR

GENERAL MANAGER

.
PRODUCTION MANAGER MARKETING MANAGER CHIEF ACCOUNTANT

7. The relationship between the highest level of management down to the various departments is
known as

(A) line
(B) rank
(C) staff
(0) flow

8. Which of the following involves selecting 10. ·Which of the following statements BEST
theobjectivesand procedures for achieving describes an authoritarian leader?
goals?
(A) Willing to take suggestions
(A) Planning (B) Allowing workers to plan their own
(B) Motivating work
(C) Organizing (C) Making decisions without consulta-
(0) Controlling tion
(D) Consulting those likely to be
affected by the decision
9. The MAIN purpose ofinstall inga suggestion
box in a company is to get workers' views 11. A MAJOR role of a trade union 1s to
about encourage
(A) each other (A) staff to become members of the
(B) other companies union
(C) ways of improving the workplace (B) advancement of the welfare of its
(D) ways of improving economic condi- members
tions (C) staff to strike whenever they have
problems at work
(D) 11-ipment to pay hiaher saleriet
and give longer V11Cations to staff ·
 -4-

12. Which of the following are functions of 16. Which of the following CANNOT be used
the entrepreneur? as collateral for obtaining· a loan from a
financial institution?
I. Ensuring that workers are unionised
II. Co-ordinating the factors of (A) An amount in a fixed deposit account
production (B) An insurance policy with a cash
III. Undertaking risks by anticipating value
demand (C) Legally owned property not covered
by insurance
(A) I and II only (D) A mortgaged home with insurance
(B) I and III only coverage
(C) II and III only
(D) I, II and Ill
17. A post-dated cheque is one which

13. An entrepreneur may reduce his risk of {A) is dated for payment at a future date
loss by (B) was written no longer than six
months ago
{A) planning ahead (C) is dated to agree with the date of the
(B) hiring more staff document requesting payment
(C) securing bank loans (D) is dated by the bank's date on the
(D) purchasing additional fixed assets day the cheque is presented for
payment

14. The MOST important use of collateral

security to the lender is that it 18. A contract may be discharged by

(A) establishes the financial position (A) breach

of the borrower {B) change of mind
(B) can be seized ifthe borrower fails {C) inconsideration
to pay (D) misappropriation
(C) improves the borrower's chance of
getting a loan
(D) gives the lender an idea of the state 19. The monthly payments collected by an
of the business insurance company on behalf of its policy
holders are known as

15. The condensation of the business plan is (A) deposits

contained in the (B) premiums
(C) instalments
(A) feasibility plan (D) endowments
(B) .. marketing plan
(C) keynote summary
(D) executive summary

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20. Which of the following types of cheques 25. The introduction of mechan.ization in the·.
allows an individual to receive cash on production process may affect society by
demand?
(A) reducingjobs for unskilled workers
(A) Open (B) increasing brain drain in the
(B) Crossed economy
(C) Certified (C) reducing pollution of the country's
(D) Banker's cities
(D) providing more jobs for unskilled
workers
21. Which of the following types of capital
is used for the day-to-day operations of a
business? 26. Which ofthe following is a feature ofperfect
competition?
(A) Fixed
( B) · Floating (A) Few buyers and many sellers
(C) Nominal (B) Many buyers and few sellers
(D) Working (C) Many buyers and many sellers
(D) Barrier to entry into the market
22. Which of the following businesses may
BEST be classified as a cottage industry? 27. Which of the following is LEAST likely to
result from growth in an organizsation?
(A) JMN Superstore, located in the rural
area
(A) Greater productivity
(B) Mary's Craft Supplies, located at (B) More division of labour
home
(C) Increased communication
(C) People's Cooperative Bank, located
(D) Increased capital investment
in Trinidad
(D) Peter and John's Company, located
in Jamaica 28. Which of the following can be described
as a marketing activity?
23. The movement of educated, skilled people
(A) Issuing bulletins on staff matters
to settle in other industrialised countries is
referred to as (B) Distributing commodities to outlets
(C) Publicising advertisements fornew
(A) migration staff
(B) brain drain (D) Ensuring that workers are given
(C) unemployment fringe benefits
(D) underemployment

24. The holding of jobs for which employees

are overqualified is referred to as

(A) migration
(B) brain drain
(C) unemplo1meftt
(D) underemployment
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29. A 'market' in economic terms is defined as 34. Market equilibrium exists when

(A) the business centre of the (A) buyers pay rea~onable prices for
community goods
(B) a specific place where buyers and (B) sellers are satisfied with the prices
sellers meet paid for their goods
(C) a place where tangible goods are (C) at current prices, the amount buyers
bought and sold wish to buy equals the amount
(D) a situation which exists when buyers sellers want to sell
and sellers influence the price of (D) at the ruling market price, buyers
goods do not want to add to the stock of
goods they already have
30. Which pf the following is NOT a function
of the retailer?
35. Which of the following can have its shares
(A) Selling in small quantities traded on the stock exchange?
(B) Preparing goods for resale
(C) Providing a local supply of goods (A) Partnerships
(D) Transporting goods to suitable (B) Public companies
storage facilities (C) Private companies
(D) Co-operative societies
31. The term 'loss leader' is BEST described as
a product which
36. Mr. Jones has several bills offixed amounts
(A) has no real market value to pay each month. His bank manager
(B) the retailer is unable to locate agreed to pay them monthly from Mr.
(C) is sold cheaply to attract customers Jones' account. This service, provided by
(D) the retailer gives away to customers the bank, refers to

(A) overdrafts
32. Which of the following gives identity to a (B) letters of credit
specific producer's goods? ( C) standing orders
( D) acting as trustees
(A) Label
(B) Brand
(C) Patent 37. With which of the following is a stock
(D) Copyright market identified?

33. Which of the following factors are likely (A) Costs and prices
to influence customers when choosing a (B) Risks and benefits
toothpaste? (C) Rent and investment
(D) Premium and reward
!-, Size
II. Brand
Ill. Flavour

(A) I and II only

(B) I and Ill only
(C) II and Ill only
(D) I, II and III
.,j

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 -7-

38. Tom invests his savings by buying shares 43. Tax paid on wages and salaries is referred
in a company. From this investment Tom to as
expects to receive
(A) excise duty
(A) profits (B) income tax
(B) interest (C) customs duty
(C) revenue (D) corporation tax
(D) dividends

44. Which of the following actions by

39. One of the MAJOR functions ofa Central government is MOST likely to lead to an
Bank is to improvement in the standard of living?

(A) issue·notes and coins (A) Printing more money

(B) issue stocks and shares (B) Increasing the income tax rate
(C) accept deposit accounts (C) Abolishing taxes on low incomes
(D) • make loans and advances (D) Giving tax incentives to businesses

40. Which ofthe following services is provided 45. Which of the following measures are used
by commercial banks? by government to redistribute income?

(A) Printing money (A) Consumption tax and tariffs

(B) Selling stocks and bonds (B) Customs duties and levies
(C) Controlling the supply of money (C) PAYE and National Insurance
(D) Accepting deposits from customers (D) Excise duties and value added tax

41. Which of the following measures may be 46. Which of the following forms of taxation is
used by goverment to protect consumers? imposed on goods produced in a country?

I. Taxation (A) Excise duty

II. Price controls (B) Preference duty
III. Provision of subsidies (C) Excise drawback
(D) Customs drawback
(A) I and II only
(B) l and III only
(C) ll and III only 47. Which of the following forms of taxation
(D) l, ll and III requires every employee to pay the same
PERCENTAGE of his salary in taxes?

42. Governments can influence business activity (A) Indirect

positively by reducing (B) Regressive
(C) Progressive
(A) taxes (D) Proportional
(B) grants
(C) spending
(D) disposable income
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 -8-

48. A country has a favourable balance of trade 52. Which of the following is NOT a feature
when of free trade?

(A) it sells more than it buys (A) Protectionism

(B) it buys more than it sells (B) Trade specialization
(C) imported goods are cheaper (C) Increase in world output
(D) there are no restrictions to trade (D) Comparative cost advantage

lt 49. The buying and selling ofgoods and services

among countries is called
53. A government can correct an adverse
balance of payments problem by

I. (A) balance of trade (A) implementing price floors

(B) international trade (B) increasing customs duties
(C) balance of payment (C) reducing severance payments
(D) international marketing (D) improving the rate of inflation

50. 'Which of the following practices would 54. Which of the following is NOT a benefit
NOT contribute to the economic develop- of international trade?
ment and growth of a country?
(A) Producers are able to increase their
(A) Provision of more infrastructure market size.
within the country (B) Political links are developed with
(B) Increased use of the country's other countries.
natural resources (C) Import restrictions can be imposed
(C) Increased importation of consumer on foreign items.
goods (D) A greater variety of goods is
(D) Provision of loans and technical obtained from overseas.
assistance for establishing local
businesses
55. Which of the following methods can
government use to reduce unemployment?
51. Which of the following are LIKELY to
affect the standard of living in a country? (A) Increases in income tax
(B) Deflation of the economy
I. A high crime rate (C) Employment levy on firms
II. A low literacy rate (D) Increased interest rates on
Ill. Widespread pollution borrowing

(A) I and II only

(B) I and III only 56. Which of the following is a feature of
(C) II and III only economic dualism in the Caribbean?
(D) I, II and III
(A) Small farming sector
(B) Rural-urban migration
(C) Urban-rural migration
(D) Large manufacturing sector

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57. Which of the following organisations would 59. In periods of inflation, the ability to raise
settle a dispute among banana-producing . additional capital for expansion is MOST
countries of the Caribbean and Central likely to be a problem for
America over preferential agreement in the
European Community? (A) sole traders
(B) partnerships
(A) World Trade Organization (C) public companies
(B) Caribbean Development Bank (0) multi-national corporations
(C) Caricom Single Market and
Economy
(0) Organization of Petroleum 60. Which of the following agreements
Exporting Countries is Barbados promoting when it sells
furniture to Jamaica?

58. Which of the following are MAJOR (A) OECS

economic problems facing many Caribbean (B) GATT
cOUl\tries today? (C) NAFTA
(0) CARI COM
I. High levels of unemployment
II. · Lack of capital for investment
III. Low productivity in manufacturing

(A) I and II only

(8) I and III only
( C) II and III only
(0) I, II and III

END OFTEST

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

Iri. 01240010/F 2012

*
 · ~ST CODE 01240010
FORM TP 201310~ MAY/JUNE 2013

CARIBBEAN EXAMINATIO~s- COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01 - General Proficiency '
1 hour 15 minutes

c 29 MAY 2013 (p.m.))

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This test consists of 60 items. You will have 1 hour and 15 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

3. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to answer and decide which choice is best.

4. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample Item

The money that a business receives from the sale

of goods or services is called its Sample Answer

(A)
(B)
assets
capital
0® II@
(C) income
(D) resources
The best answer to this item is "income", so answer space (C) has been shaded.

5. If you want to change your answer, erase it completely before you fill in your new choice.

6. When you are told to begin, tum the page and work as quickly and as carefully as you can.
If you cannot answer an item, go on to the next one. You may return to this item later. Your

--==
-
--
score will be the total number of correct answers.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

--===- Copyright © 2012 Caribbean Examinations Council

----
!!!!!!!!!
All rights reserved.

01240010/F 2013
 - 2-

1. Private enterprise is run MAINLY to 6. Which of the following responsibilities

must be assumed by the management of a
(A) create profit company?
(B) reduce inflation
(C) provide jobs for more people I. Producing goods of a marketable
(D) distribute goods and services fairly quality
II. Maximizing efficiency and creating
surpluses
2. Which of the following types of business III. Determining dividends to be paid
environment is MOST typical of the to shareholders
Commonwealth Caribbean? IV. Maintaining good communication
and human relations with staff
(A) Corporate state
(B) Mixed economy (A) I and II only
(C) Centrally planned (B) II and III only
(D) Perfectly competitive (C) II, III and IV only
(D) I, II, III and IV

3. Which of the following features is NOT a 7. Selecting the objectives and the procedures
function of money?
for achieving goals is referred to as

(A) Indivisibility (A) planning

(B) Store ofvalue (B) orgamzmg
(C) Measure of value
(C) controlling
(D) Medium of exchange (D) motivating

4. In a public limited company, the losses are 8. The PRIMARY roleoftheHumanResources

borne by the Department of a firm is to

(A) staff (A) hire, recruit, train and motivate

(B) directors workers
(C) community (B) promote recreational activities for
(D) shareholders workers
(C) assist employees to understand
industrial relations
5. A MAJOR function ofthe Public Sector is (D) promote magazines highlighting
to outstanding workers

(A) make profits 9. A MAJOR role of a trade union 1s to

(B) serve the country encourage
(C) serve the interest of the shareholder
(D) inspire competition among busi- (A) staff to become members of the
nesses umon
(B) advancement of the welfare of its
members
(C) staff to strike whenever they have
problems at work
(D) management to pay higher salaries
and give longer vacations to staff

GO ON TO THE NEXT PAGE

01240010/F 2013
 -3-

10. Which ofthe following activities carried out 15. The condensation of the business plan is
in a firm will NOT be under the supervision contained in the
of the marketing manager?
(A) feasibility plan
(A) Packaging (B) marketing plan
(B) Purchasing (C) keynote summary
(C) Advertising (D) executive summary
(D) Distributing

16. A firm may change the main objectives from

11. Which ofthe following departments is NOT profit to market share if there is increased
a functional area of a business?
(A) government regulation
(A) Finance (B) cost of utilities and overheads
(B) Production (C) competition in the market place
(C) Public Relations (D) use of technology in the organiza-
(D) Human Resources tion

12. JB Auto Company decided to export 17. Kiki sustained bums while at work at a
car engines from Barbados to Trinidad. local fast food restaurant. Under which
Which of the following modes is BEST for of the following insurance policies is she
transporting the engines? LIKELY to be compensated?

(A) Air (A) Public liability

(B) Sea (B) Fidelity guarantee
(C) Rail (C) Property guarantee
(D) Land (D) Employers' liability

13. An entrepreneur may reduce his risk ofloss 18. A 'purchase order' is a
by
(A) request for additional goods
(A) planning ahead (B) notification of goods received
(B) securing bank loans (C) statement of debts outstanding
(C) sponsoring community projec!s (D) statement offering to buy goods
(D) purchasing additional fixed assets

19. Which of the following ways is NOT

14. Cash used to secure a loan at the bank is legitimate for terminating a contract?
referred to as
(A) Breach
(A) collateral (B) Performance
(B) fixed assets (C) Lapse of time
(C) fixed deposit (D) Change of mind
(D) current assets

GO ON TO THE NEXT PAGE

0 1240010/F 2013
 -4-

20. The monthly payments collected by an 24. The price of an article is usually high when
insurance company on behalf of its policy there is a
holders are known as
(A) small quantity for sale and few
(A) deposits people wanting to buy
(B) premmms (B) small quantity for sale and many
(C) instalments people wanting to buy
(D) endowments (C) large quantity for sale and few people
wanting to buy
(D) large quantity for sale and many
21. The term 'human resources' refers to people wanting to buy

(A) materials and goods made by

human beings 25. To which of the following industries does
(B) capital invested by shareholders in a firm involved in food processing belong?
a company
(C) raw materials used in the manufac- (A) Service
ture of goods (B) Extractive
(D) persons available for productive (C) Constructive
and professional services (D) Manufacturing

22. Which of the following results is LEAST 26. Producing, pricing, promotion and place are
likely to occur from growth in an components of
organization?
(A) market study
(A) Greater productivity (B) marketing mix
(B) More division of labour (C) market research
(C) Increased communication (D) sales promotion
(D) Increased capital investment

27. Which of the following commodities is a

23. Which of the following types of capital product of the manufacturing industry?
is used for the day-to-day operations of a
business? (A) Cars
(B) Gold
(A) Fixed (C) Lumber
(B) Floating (D) Houses
(C) Working
(D) Nominal

GO ON TO THE NEXT PAGE

01240010/F 2013
 -5-

28. Which of the following activities is NOT 32. Which ofthe following property rights gives
a function of the retailer? identity to a specific producer's goods?

(A) Selling in small quantities (A) Label

(B) Preparing goods for resale (B) Brand
(C) Providing a local supply of goods (C) Patent
(D) Transporting goods to suitable (D) Copyright
storage facilities

33. A 'market' in economic terms is defined as

29. Which of the following activities can be
described as marketing a product? (A) the business centre of the commu-
; nity
(A) Issuing bulletins on staff matters (B) a specific place where buyers and
(B) Distributing the commodities to sellers meet
outlets (C) a place where intangible goods are
(C) Publicising advertisements for new bought and sold
staff (D) a situation which exist when buyers
(D) Ensuring that workers are given and sellers influence the price of
fringe benefits goods

30. Which of the following operations is an 34. Which of the following factors is LEAST
example of sales promotion? likely to influence consumer behaviour?

(A) Warehousing (A) Product price

(B) Free sampling (B) Brand loyalty
(C) Servicing goods (C) Quality of goods
(D) Gathering information (D) Place of residence

31. Which of the following characteristics 35. Which of the following entities can have
BEST describes a perfectly competitive their shares traded on the stock exchange?
market?
(A) Partnerships
(A) Few sellers and many buyers (B) Public companies
(B) Difficult entry to new markets (C) Private companies
(C) Production of almost identical (D) Co-operative societies
goods
(D) Imperfect consumer knowledge of
pnces 36. Tom invests his savings by buying shares
in a company. From this investment, Tom
expects to receive

(A) profits
(B) interest
(C) revenue
(D) dividends

GO ON TO THE NEXT PAGE

01 24001 0/F 2013
 - 6-

37. Mr Jones has several bills of fixed amounts 41. Governments ccim influence business activity
to pay each month. His bank manager positively by reducing
agreed topaythemmonthlyfromMr Jones'
account. This service, provided by the bank, (A) taxes
is referred to as (B) grants
(C) spending
(A) overdraft (D) subsidies
(B) fixed deposit
(C) standing order
(D) letter of credit 42. A 'price control' may be defined as a

(A) tax on goods and services

38. Which ofthe following may cause the bank , (B) government ban of imports
to dishonour a cheque? (C) grant given to producers to reduce
their prices
I. Irregular signature (D) government limit on the price of
II. Cheque is postdated goods or services
III. Cheque is crossed
IV. Amount in words and figures do
not agree 43. Governments impose taxes for which of
the following reasons?
(A) I and III only
(B) II and IV only I. To encourage spending
(C) I, II and IV only II. To redistribute income
(D) II, III and IV only III. To promote economic growth ·
IV. To improve the balance ofpayments

39. The MAJOR role of the central bank is to (A) II and III only
(B) III and IV only
(A) issue notes and coins (C) I, III and IV only
(B) issue stocks and shares (D) II, III and IV only
(C) accept deposits accounts
(D) make loans and advances
44. Which of the following types of taxes is
paid on wages and salaries?
40. Investment can be defined as
(A) Income
(A) the stock of goods of a country (B) Corporation
(B) additions to the capital stock of a (C) Value added
country (D) Consumption
(C) the amount of money available at
a given time
(D) the amount of capital owned by the 45. Which of the following measures can be
government considered as incentives to industries?

(A) Increasing insurance premiums

(B) Devaluing local currency
(C) Increasing corporation tax
(D) Training employees

GO ON TO THE NEXT PAGE

01240010/F 2013
 -7-

Which of the following forms of taxation 51. Which of the following actions of
can be classified as 'direct'? government is MOST likely to lead to an
improvement in the standard of living?
(A) Income tax
(B) Excise duty (A) Printing more money
(C) Purchase tax (B) Increasing the income tax rate
(D) Customs duty (C) Abolishing taxes on low incomes
(D) Giving tax incentives to business

47. Which of the following forms of taxation

requires every employee to pay the same 52. Inflation can BEST be described as
PERCENTAGE of his salary in taxes?
(A) fluctuations in the general pnce
(A) Indirect level
(B) Regressive (B) a fall in the level of prices of goods
(C) Progressive and services
(D) Proportional (C) a general and sustained rise in the
level of prices
(D) changes in the level of prices of
.t8. A government can correct an adverse foreign goods and services
exchange problem by

(A) increasing customs duties 53. Education contributes to economic growth

(B) implementing price floors by ensuring that the workforce is highly
(C) improving the rate of inflation
(D) reducing severance payments (A) mobile
(B) efficient
(C) classified
49. A country has a favourable balance of trade (D) structured
when

(A) it sells more than it buys 54. Which of the following will NOT form part
(B) it buys more than it sells of a country's balance of trade?
(C) imported goods are cheaper
(D) there are no restrictions to trade (A) Remittances from abroad
(B) Earnings from the exportation of
rum
50. Which ofthe following practices would NOT (C) Payments for the importation of
contribute to the economic development and tobacco
growth of a country? (D) Payments for the purchase of over-
seas equipment
(A) Increased importation of consumer
goods
(B) Increased use of the country's 55. Which of the following methods can a
natural resources government use to reduce unemployment?
(C) Provision of more infrastructure
within the country (A) Increases in income tax
(D) Provision of loans and technical (B) Deflation of the economy
assistance for establishing local (C) Employment levy on firms
businesses (D) Increasedinterestrates on borrowing

GO ON TO THE NEXT PAGE

OL 010/F 2013
 -8-

56. Which of the following trading agreements 59. Which ofthe following economic problems
is Barbados promoting when it sells are prevalent in the Caribbean?
furniture to Jamaica?
I. High levels of unemployment
(A) OECS Ii. Adverse balance of payments
(B) GATT III. Lack of capital for investment
(C) NAFTA IV. Low productivity in manufacturing
(D) CARICOM
(A) I and II only
(B) II and III only
57. To correct an adverse balance of payments (C) I, II and IV only
position, a government may (D) I, II, III and IV

(A) reduce credit

(B) increase exports 60. Which ofthe following organizations would
(C) reduce income tax settle a dispute among banana-producing
(D) increase the money supply countries of the Caribbean and Central
America over preferential agreement with
the European Union?
58. The term 'economic dualism' defines an
economy in which one sector is (A) World Trade Organization (WTO)
(B) Caribbean Development Bank
(A) highly dependent on local capital (CDB)
(B) highly dependent on foreign capital (C) CARICOM Single Market and
(C) overpopulated while the other is Economy (CSME)
under-populated (D) Organization of Pe trole um
(D) technologically advanced while the Exporting Countries (OPEC)
other is technologically retarded

END OF TEST

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

0124001 0/F 2013

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 TEST CODE 01240010
FORM TP 2014105 MAY/JUNE 2014
CARIBBEAN EXAMINATIONS COUNCIL
CA~BBEAN SECONDARY EDUCATION CERTIFICATE®
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01 - General Proficiency
1 hour 15 minutes

( 28 MAY 2014 (p.m.))

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This test consists of60 items. You will have 1 hour and 15 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

3. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to answer and decide which choice is best.

4. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample Item
The money that a business receives from the sale
of gt>ods or services is called its Sample Answer
(A)
(B)
assets
capital
0® II®
(C) income
(D) resources
The best answer to this item is "income", so answer space (C) has been shaded.

5. If you want to change your answer~ erase it completely before you fill in your new choice.

6. When you are told to begin, tum the page and work as quickly and as carefully as you can.
If you cannot answer an item, go on to the next one. You may return to this item later. Your

--
i iiiii
score will be the total number of correct answers.

::::::: DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

---== Copyright © 2012 Caribbean Examinations Council

-- All rights reserved.

 -2-

1. Barter is BEST described as the 5. In a public limited company, the losses are
borne by the
(A) process of exchange involving the
use of money (A) staff
(B) purchase of goods and services (B) directors
using cheques (C) community
(C) exchange of goods and services (D) shareholders
without 1\le use of money
(D) exchange of goods and services
using notes and coins 6. The PRIMARY role of the human resoul'ce
department of an organization is to

2. Labour is BEST defined as the (A) hire, recruit, train and motivate
workers
(A) physical and mental capabilities (B) promote recreational activities for
used to perform tasks workers
.(B) ability to carry out ~anagement (C) assist employees in understanding .
functions effectively industrial relations
(C) level of skills training received by (D) produce magazines highlighting
individuals who are working outstanding workers
(D) total number of persons who hold
jobs in government ministries

.3. Which of the following is NOT a trading

' instrument?

(A) Cheques
(B) Credit cards
(C) Bills of exchange
(D) Money remittance

4. The term 'trade' refers to

(A) ·the selling of goods and services

on the stock market
(B) the movement of immigrants from
one country to another
(C) any commercial activity involving
the exchange of goods and
services
(D) the negotiation process between ·
trade unions and management
 - 3-

Items 7-8 refer to the following diagram.

I
CEO
'
-
T
I

I
Sales
I I I I
Production Finance
r- ~

Manager Manager Manager

HR Purchasing
'-- f--
Supervisor Supervisor

7. The purchasing supervisor reports directly 9. Which of the following departments is

to which of the following? LIKELY to use its Management Information
System (MIS) to manage information about
(A) CEO customers and their response to the products
(B) HR Supervisor they sell?
(C) Finance Manager
(D) Production Manager (A) Finance
(B) Marketing
(C) Production
8. Which of the following positions would be · (D) Human Resource
BEST suited at 'X'?

(A) Chief Advisor 10. Subsidised meals for employees would fall
(B) Board of Directors under which of the following categories?
(C) Managing Director
(D) Human Resource Manager (A) Fringe benefits
(B) Duty allowance
(C) Wages and salaries
(D) Workmen's compensation
 - 4-

11. A MAJOR role of a trade union is to 15. The synopsis of the business plan 1s
encourage the contained in the

(A) unionization of workers (A) feasibility plan

(B) advancement of the welfare of its (B) marketing plan
members (C) keynote sm:runary
(C) sacking ofworkers whenever they (D) executive summary
haye problems at work
(D) incr~ase of salaries and vacations
16. A post-dated cheque is one which

12. An entrepreneur who wants to maintain (A) is dated for payment at a future date
control of the business would be advised (B) was written no longer than six
to register the business as a months ago
(C) is dated to agree with the date of the
(A) Sole Trader document requesting payment
(B) Partnership (D) is dated by the bank on the dfl.Y the
(C) Limited Company cheque is presented for payment
(D) Private Limited Company

17. Which of the following factors prevents an

13. Which ofthe following is NOT an example agreement from being considered a valid
of collateral? contract?

(A) Bonds (A) Consideration

(B) Stocks (B) Legal purpose
(C) Property (C) Misrepresentation
(D) Money orders (D) Offer and acceptance

14. The MOST important use of collateral 18. A contract may be discharged by which of
security to the lender is that it the following?

(A) can be seized if the borrower fails I. Breach

to pay II. Performance
(B) establishes the financial position III. Lapse of time
of the borrower ·
(C) improves the borrower's chance of (A) I and II only
getting a loan (B) I and III only
(D) gives the lender an idea of the state (C) II and III only
of the business (D) I, II and III

19. A 'purchase order' is a

(A) request for additional goods

(B) notification of goods received
(C) statement of outstanding debts
(D) document offering to buy goods

nr. r\1\.T 'lYI TUH' l\TRYT PAITF

 - 5-

20. Which of the following types of cheques 25. Which of the following conditions would
allows an individual to receive cash on constitute a linkage between two industries?
demand?
(A) Two firms manufacture similar
(A) Open goods.
(B) Crossed (B) One firm shares the use ofmachinery
(C) Certified with another firm.
(D) Banker's (C) Two firms are responsible for the
manufacture of different kinds
of goods.
21 . Which of the following types of capital (D) The output of one industry of the
is used for the day-to-day operations of a economy becomes the input of
business? another industry.

(A) Fixe~ ·
(B) Floating 26. Which ofthe following is a feature ofperfec~
(C) Working competition?
(D) Nominal
(A) Few buyers arid many sellers
(B) Many buyers and few sellers
22. Which ofthe following factors ofproduction (C) Barrier to entry into the market
earns interest? (D) Many buyers and many sellers

(A) Land
(B) Capital 27. Which of the following is an example of
(C) Labour service-type production?
(D) Enterprise
(A) Oil mining
(B) Pottery making
23 . The term ' human resources' refers to (C) Communication
(D) Newspaper printing
(A) materials and goods made by human
· beings
(B) capital invested by shareholders in 28. The PRIMARY function of advertising is to
a company
(C) raw materials used in the manufac- (A) promote brand loyalty
ture of goods (B) promote public relations
(D) persons available for productive (C) communicate information
and professional services (D) ensure wider distribution of goods

24. Which of the following items is a product 29. Which ofthe.following is NOT a function
of the manufacturing industry? of the retailer?

(A) Gold (A) Preparing goods for resale

(B) A car (B) Selling in small quantities
(C) Wood (C) Providing a local supply of goods
(D) A house (D) Transporting goods to suitable
storage facilities
 -6-

30. Which of the following market situations 34. Market equilibrium exists when
is typically found where there are a large
number of producers and consumers? (A) buyers pay reasonable prices for
goods
(A) Oligopoly (B) sellers are satisfied with the prices
(B) Monopoly paid for their goods
(C) Perfect market (C) at current prices, the amount buyers
(D) Imperfect market wish to buy equals the amount
sellers want to sell
(D) at the ruling market pric~, buyers
31. Which of the following gives identity to a do not want to add to the stock
specific producer's goods? of goods they already have

(A) Label
(B) Brand 35. Which of the following may cause the bank
(C) Patent to dishonour a cheque?
(D) Copyright
I. Cheque is crossed
II. Irregular signature
32. In which of the following types of trade III. Cheque is post-dated
can the hire purchase method of buying be
used? (A) I and II only
(B) I and III only
(A) Retail (C) II and III only
(B) Import (D) I, II and III
(C) Foreign
(D) Wholesale
36. Which of the following is a function of
the commercial bank and NOT the central
33. The price of an article is usually high when bank?
there is a
(A) Providing personal loans
(A) large quantity for sale and few (B) Carrying out monetary policy
people wanting to buy (C) Giving advice to government
(B) small quantity for sale and few (D) Managing the financial sector
people wanting to buy
(C) large quantity for sale and many
people wanting to buy 37. Which of the following are characteristics
(D) small quantity for sale and many of a stock market?
people wanting to buy
(A) Costs and prices
(B) Risks and benefits
(C) Rent and investment
(D) Premium and reward
 -7-

38. Tom invests his savings by buying shares 43 . Which of the following is NOT regarded
in a .company. From this investment Tom as a role of taxation?
expects to receive
(A) To raise revenue for government
(A) profits (B) To influence the distribution of
(B) interests incomes and wealth
(C) revenues (C) To influence total expenditure on
(D) dividends goods and services
(D) To influence the investment deci-
sions of publicly owned enter-
39. One of the MAJOR functions of a Central prises
Bank is to

(A) issue notes and coins 44. Which of the following actions by
(B) issue stocks and shares government is MOST likely to lead to an
(C) accept deposit accounts improvement in the standard of living?
(D) make loans and advances
(A) Printing more money
(B) Increasing the income tax rate
40. Investment can be defined as (C) Abolishing taxes on low incomes
(D) Giving tax incentives to businysses
(A) the stock of goods in a country
(B) additions to the capital stock of a
country 45. Which of the following forms of taxation can
(C) the amount of money available at be classified as 'direct'?
a given time
(D) the amount of capital owned by the (A) Income tax
government (B) Excise duty
(C) Purchase tax
(D) Customs duty
41. Which ofthe following forms oftaxation is
imposed on goods produced in a country?
46. Governments offer subsidies to businesses
(A) Excise duty to
(B) Preference duty
(C) Excise drawback (A) force them to pay corporation tax
(D) Customs drawback (B) increase costs and ultimately prices
(C) reduce the costs and ultimately
pnces
42. A price control may be defined as a (D) increase the price ofimported goods

(A) tax on goods and services

(B) government ban on imports 47. Which of the following forms of taxation
(C) government limit on the price of a requires every employee to pay the same
good or service percentage ofhis salary in taxes?
(D) grant given to producers to reduce
their prices (A) Indirect
(B) Regressive
(C) Progressive
(D) Proportional
 -8-

48. In calculating Net National Product, 52 . Which of the following is NOT a feature
. depreciation refers to the of free trade?

(A) increase in the price level (A) Protectionism

(B) decrease in the price level · (B) Trade specialization
(C) decrease in capital stock value (C) Increase in world output
(D) increase in capital stock value (D) Comparative cost advantage

49. Inflation can BEST be described as 53. The total value of goods imported minus
the total value of goods exported is referred
(A) fluctuations in the general price to as
level
(B) a_ general and sustained rise in the (A) balance of trade
level of prices (B) total currency flow
(C) a fall in the level of prices of goods (C) balance of payments
and services. (D) current account balance
(D) changes in the level of prices of
goods and services
54. A quota can BEST be described as
.
50. Export licences are issued MAINLY to (A) a ban on the sale of goods
(B) a licence given to import goods
(A) encourage local businesses to (C) an external tariff among countries
produce more goods for export (D) a restriction on the quantity
(B) enable the government to control imported
the flow of goods being exported
(C) indicate to the importing country
that the goods are of a high 55. The term 'economic dualism'defines an
standard economy in which one sector is
(D) indicate to the importing country
the price at which the goods are (A) highly dependent on local capital
to be sold (B) highly dependent on foreign capital
(C) overpopulated while the other is
underpopulated
51. ·The term 'trade in securities' refers to (D) technologically advanced while the
other is technologically retarded
(A) the selling of goods and services
on the stock market
(B) the movement of immigrants from 56. To correct an adverse balance of payments,
one country to another a government may
(C) the negotiation process b~tween
trade unions and management (A) reduce credit
(D) any commercial activity involving (B) · increase exports
the exchange of goods and (C) reduce income tax
services (D) increase the money supply
 -9-

57. The purpose ofCARJCOM is to 59. In periods of inflation, the ability to raise
additional capital for expansion is MOST
(A) allow member states to collaborate likely to be a problem for
(B) foster interregional trade and
common services (A) sole traders
(C) encourage the transfer of tech- (B) partnerships
nology within the region (C) public companies
(D) allow for unrestricted movement (D) multi-national corporations
of persons atnong the territories

60. Which of the following countries are NOT

58. The MAJOR aim of the European Union members of the Organization of Eastern
(EU) is free m~wement of Caribbean States (OECS)?

I. goods (A) Anguilla and Grenada

II. people (B) Guyana and Bahamas
III. capital (C) Barbados and Jamaica
(D) Dominica and St. Lucia
(A) I and II only
(B) I and III only
(C) II and III only
(D) I, II and III

ENDOFTEST

IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

01240010/F 2014
 %,
rcoDE 012400t 0
FORM TP 201510s MAY/JUNE 2015

CARIBBEAN EXAMINATIONS COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTItr'ICATE@
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01 - General Proficiency
I hour 15 minutes

27 MAY 201s (p.m.)

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

t. This test consists of 60 items. You will have t hour and l5 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet.

3. Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to answer and decide which choice is best.

4. On your answer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample Item

The money that a business receives from the sale

of goods or services is called its Sample Answer
(A) assets
@@o@
(B) capital
(C) income
(D) resources

The best answer to this item is "income", so (C) has been shaded.

5. If you want to change your answer, erase it completely before you fill in your new choice.

6. When you are told to begin, turn the page and work as quickly and as carefully as you can. If
ffi
WT you cannot answer an item, go on to the next one. You may return to that item later.
3=S
crtt
ffi-
sffi:
. : DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.
===
I
:!!- Copyright @ 2013 Caribbean Examinations Council
I All rights reserved.
I
- 0r240010/F 2015
-
 -2-

1. Barter is BEST described as the 6. The policies of a company are formulated

by the
(A) purchase of goods and services
using cheques (A) auditors
(B) process of exchange involving the (B) directors
use of money (C) managers
(C) exchange of goods and services (D) shareholders
using notes and coins
(D) exchange of goods and services
without the use of money 7. Selecting the objectives and the procedures
for achieving goals is referred to as

2. Which of the following types of business (A) planning

environment is MOST typical of the (B) organizing
Commonwealth Caribbean? (C) controlling
(D) motivating
(A) Corporate state
(B) Mixed economy
(C) Centrally planned 8. Which of the following are benefits of
(D) Perfectly competitive written communication?

I. Instant feedback
3. WhichofthefollowingisNOTanobjective II. Provides evidence
of the public sector? IIL Useful for detailed messages .

(A) Maximizing profits (A) I and II only

(B) Providing essential services (B) I and III only
(C) Regulating business activity (C) II and III only
(D) Promoting economic growth and (D) I,II and III
development

9.
Which of the following organizations
4. Theterm'divisionoflabour'canbedefined is LEAST likely to use a management
as the information sYstem?

(A) organization oftasks in production (A) The national bank

(B) assemblingofgoodsfordistribution (B) A shoe-shine shop
(C) separation of tasks to complete a (C) A deparhnQnt store
job (D) AbeautY suPPlies outlet
(D) employment of different types of
workers

5. Which of the following is NOT a function

of money?

(A) Indivisibility
(B) Store of value
(C) Measure of value
(D) Medium of exchange

GO ON TO THE NEXT PAGE

 -3-

Item l0 refers to the following diagram which shows a section of a typical vertical organizational
chart for a manufacturing company.

10. The relationship between the highest level of management down to the various departrrents is
known as

(A) line
(B) rank
(c) staff
(D) flow

11.. TheMAlNpurposeofinstallingasuggestion 13. Which of the following individuals benefit

box in a company is to get workers'views from having 'limited liability status'?
about
(A) Franchisees
(A) each other (B) Shareholders
(B) other companies (C) Ordinary parfirers
(C) ways of improving the workplace (D) Debenture holders
(D) ways of improving economic
conditions
14. Which ofthe following are functions ofthe
entreBreneur?

12. JB Auto Company decided to export I. Ensuringthatworkersareunionized

car engines from Barbados to Trinidad. U. Co-ordinating the factors of
Whichofthe following modes is BEST for production
transporting the engines? m. Undertaking risks by anticipating
demand
(A) Air
(B) Sea (A) I and II only
(C) Rail (B) I and III only
(D) Land (C) II and III only
(D) I, II and III

GO ON TO THE NEXT PAGE

 -4-

15. The condensation of the business plan is 20. Which of the following factors prevents an
contained in the agreement from being considered a valid
contract?
(A) feasibility plan
(B) marketing plan (A) Consideration
(C) keynote summary (B) Legalpurpose
(D) executive summary (C) Misrepresentation
(D) Offer and acceptance

16. Cash used to secure a loan at the bank is

referred to as 21. The term 'human resources'refers to

(A) collateral (A) materialsandgoodsmadebyhuman

(B) fixed assets beings
(C) current assets (B) capital invested by shareholders in
(D) fixed deposits a company
(C) raw materials used in the
manufacture of goods
17. The monthly payments collected by an (D) persons available forproductive and
insurance company on behalf of its policy professional services
holders are known as

(A) deposits 22. The movement of educated, skilled people

(B) premiums to settle in other industrialized countries is
(C) instalments referred to as
(D) endowments
(A) migration
(B) brain drain
r8. Which of the following types of cheques (C) unemployment
allows an individual to receive cash on (D) underemployment
demand?

(A) Open 23. The amount of labour available for

.(B) Crossed productive activity is known as
(C) Certified
(D) Banker's (A) employment
(B) labour force
(c) labour movemgnt
19. Kiki sustained burns while at work at a (D) efficiency of labour
local fast food restaurant. Under which
of the following insurance policies is she
LIKELY to be compensated?

(A) Public liability

(B) Fidelity guarantee
(C) Properfy guarantee
(D) Employers'liability

GO ON TO THE NEXT PAGE

 -5-

24. Productivity can be measured by 28. Which of the following terms describes
a market consisting of a large number of
(A) Inputs producers and consumers?
Outputs
(A) Oligopoly
(B) Inputs (B) Monopoly
Revenue (C) Perfect market
(D) Imperfect market
(C) Revenue
OutputS
29. Which of the following is an activity
(D) Outputs involved in marketing a product?
lnputs
(A) Issuing bulletins on staffmatters
(B) Distributingcommoditiestooutlets
25. Which of the following is a product of the (C) Publicizingadvertisementsfornew
manufacturing industry? staff
(D) Ensuring that workers are given
(A) Car fringe benefits
(B) Gold
(C) Tourist
(D) Lumber 30. Market equilibrium exists when

(A) buyers pay reasonable prices for

26. Product, price, promotion and place are goods
components of a (B) sellers are satisfied with the prices
paid for their goods
(A) market study (C) at the ruling market price, buyers
(B) marketing mix do not want to add to the stock
(C) market research of goods they already have
(D) sales promotion (D) at current prices, the amount buyers
wish to buy equals the amount
sellers want to sell
27. In the Caribbean, many people are hired
for sugar cane farming and very little
equipment is used. This industry can BEST 31. Which of the following is NOT a function
be described as of the retailer?

(A) labow intensive (A) Preparing goods for resale

(B) capital intensive (B) Selling in small quantities
(C) having low capital input (C) Providing a local supply of goods
(D) having high capital input (D) Transporting goods to suitable
storage facilities

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 -6-

32. Which of the following gives.identity to a 37. MrJones has several bills offixed amounts
specific producer's goods? to pay each month. His bank manager
agreed to pay them monthly from Mr Jones,
(A) Label account. This service, provided by the bank,
(B) Patent refers to
(C) Brand
(D) Copyright (A) overdrafts
(B) letters of credit
(C) standing orders
33. A'market'in economic terms is defined as (D) acting as trustees

(A) the business cenft e ofthe community

(B) a specific place where buyers and 38. Which ofthe following services is provided
sellers meet by commercial banks?
(c) aplace where intangible goods are
bought and sold (A) Printing money
(D) a situation which exists when buyers (B) Selling stocks and bonds
and sellers influence the price of (C) Controlling the supply of money
goods (D) Accepting deposits from customers

34. Which of the following operations is an 39. A debenture holder is one who
example of sales promotion?
(A) is paid a fixed rate of interest
if the.
(A) Warehousing company makes profits
(B) Free sampling (B) must be paid any amounts owing
(C) Servicing goods to him in the following year
(D) Gathering information (C) has first claim on any profits and is
paid a fixed rate of dividend
(D) is entitled to a fixed rate of interest
35. Which of the following entities can have whether or not the company
its shares taded on the stock exchange?
makes profits

(A) Parnrerships
(B) Public companies 40. Invesfinent can be defined as
(C) Private companies
(D) Co-operative societies (A) the stock of goods in a country
(B) - additions to the capital stock of a
country
36. Tom invests his savings by buying shares (C) the amount of money available at
in a company. From this investment, Tom a given time
expects to receive (D) the amountofcapital owned by the
government
(A) profits
(B) interest
(C) revenue
(D) dividends

GO ON TO THE NEXT PAGE

 -7 -

41. Which of the following are measures used 45. Which of the following actions by
to protect the environment? govemment is MOST likely to lead to an
improvement in the standard of living?
I. Recycling
II. Deforestation (A) Printing more money
il. Water conservation (B) Increasing the income tax rate
(C) Abolishing taxes on low incomes
(A) I and II only (D) Giving tax incentives to businesses
(B) I and III only
(C) II and III only
(D) I,II and III 46. Which of the following forms of taxation
can be classified as 'direct'?

42. A'price control'may be defined as a (A) Income tax

(B) Excise duty
(A) tax on goods and services (C) Purchase tax
(B) government ban of imports (D) Customs duty
(C) grant given to producers to reduce
their prices
(D) government limit on the price of 47. The provision of social services by
goods or services government does NOT include

(A) tax refunds

43. The success of government's economic (B) health clinics
policies can be MOST effectively measured (C) education and training
by (D) transportation facilities

(A) an increase in the level of policies

(B) anincreaseinthestandardofliving 48.
(C) adecreaseinthelevelofemployment
(D) a decrease in the volume of
roduction
44. Which of the following is a function of
Chamber of Commerce?
In the recent budget it was reported that
Sanfordlslandisanetimporter. Thismeans
that its
(A) exports are equal to imports
(B) exports are less than imports
a (C) balance of trade is favourable
(D) balance of payment is favourable

(A) Creating employment -

(B) Protecting the environment 49 . A country has a favourable balance oftrade
(C) Assisting in securing markets for when
- producers
(D) Providingfinancialaidtohurricane (A) it sells more than it buys
victims (B) it buys more than it sells
(C) imported goods are cheaper
(D) there are no restrictions to trade

GO ON TO THF, NEXT PAGF,

 -8-

50. In calculating 'net national product', 54. Which of the following is NOT a benefit of
depreciation refers to the international trade?

(A) increase in the price level (A) Producers are able to increase their
(B) decrease in the price level market size.
(C) increase in capital stock value (B) Political links are developed with
(D) decrease in capital stock value other countries.
(C) Import restrictions can be imposed
on foreign items.
51. The'terms of trade'of a country refers to (D) A greater variety of goods is
the rate obtained from overseas.

(A) at which the counfiry's population

grows 55. Which of the following represents the
(B) oftumoveroflifeexpectancydue correct stages towards the development
to nutrition of the CARICOM Single Market and
(C) of income a country obtains from Economy?
increasing growth
(D) at which one country's goods (A) CARIFTA+Federation
and services are exchanged for CARICOM * CSME
another's
(B) CARIFTA---+CARICOM+
Federation 4 CSME
52. The difference between the value of a
countr5r's visible and invisible exports and (C) Federation-+CARICOM-+
the value ofits visible and invisible imports CARIFTA -* CSME
is referred to as the
(D) Federation -+ CARIFTA-->
(A) balance of trade CARICOM --+ CSME
(B) per capita income
(C) balance of paymerrts
(D) gross national product 56. Which of the following is a feature of eco-
nomic dualism in the Caribbean?

53. Which of the following methods is NOT (A) Small farming sector
used to measure a country's national (B) Urban-rural migration
income? (C) Rural-urban migration
(D) Large manufacturing sector
(A) Output
(B) Income
(C) Accounting 57. Which of the following terms defines a
(D) Expenditure continuous rise in the general level ofprices?

(A) Inflation
(B) Reflation
(C) Deflation
(D) Depression

GO ON TO THE NEXT PAGE

 -9-
58. Which of the following countries are NOT 60. Which of the following or ganizations would
members of the Organization of Eastern settle a dispute among banana-producing
Caribbean States? countries of the Caribbean and Central
America over preferential agreement with
(A) Anguilla, Grenada the European Union?
(B) Barbados, Jamaica
(c) Montserrat, Saint Lucia (A) World Trade Organization (WTO)
(D) Dominica, Saint Vincent (B) Caribbean Development Bank
(cDB)
(c) CARICOM Single Market and
59. The purpose of CARICOM is to Economy (CSME)
(D) Organization of Petroleum
(A) allow member states to collaborate Exporting Countries (OPEC)
(B) allow for unrestricted movement
of persons among the
territories
(c) encourage the transfer oftechno lo gy
within the region
(D) foster interregional trade and
common services

END OF'TEST

IF YOU FINISH BEFOR.E TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.

0t240010tF 2015
 nrme on thc litre belotr *trd returr
thls booklet with your answer sheet Failure
so mry result in disquallficatior. sr coDE 01240010
FORM TP 2016105 MAY/JT]NE 2016

CARIBBEAN EXAMINATIONS COUNCIL

CARIBBEAN SECONDARY EDUCATION CERTIFICATE@
EXAMINATION
PRINCIPLES OF BUSINESS
Paper 01- General Proficiency
I hour 15 minutes

2s MAY2016 (p.m.)

READ THE FOLLOWING INSTRUCTIONS CAREFULLY.

1. This test consists of 60 items. You will have t hour and 15 minutes to answer them.

In addition to this test booklet, you should have an answer sheet.

Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item
you are about to ans\ver and decide which choice is best.

-1 On your answer sheet. flnd the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample Item

The money that a business receives from the sale

of goods or services is called its Sample Answer

(A)
(B)
assets
capital
A B
o@
(C) income
(D) resources

The best answer to this item is "income", so (C) has been shaded.

If you want to change your answer, erase it completely before you fill in your new choice.

When you are told to begin, turn the page and work as quickly and as carefully as you can. If
you cannot answer an item, go on to the next one. You may return to that item later.

- DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.

-
- Copyright A 2014 Caribbean Examinations Council
---r All rights reserved.
- r,r1240010/F 2016
 -2-

6 Which of the following is NOT an activity in

1. The term 'trade'refers to
the planning process?
(A) the selling of goods and services
on the stock market
(A) Setting goals
(B) the movement of immigrants from
(B) Establishing policies
one country to another
(c) Identifying resources
(c) any commercial activity involving
(D) Delegating responsibility
the exchange of goods and
services
(D) the negotiation process between IIgd refers to the following information.
trade unions and management
Mr Lloyd, manager of LM Ltd holds
regular staffmeetings to listen to ideas from
employees before making decisions ftat
2. Which of the following types of business
u,ould affect the future of the company.
environments is MOST typical of the
Commonwealth Caribbean? 'What leadership style does
7 Mr Lloyd
(A) employ?
Corporate state
(B) Mixed economy
(c) Centrally planned
(A) Autocratic
(B) Democratic
(D) Perfectly competitive
(c) Charismatic
(D) Laissez faire

3 A to seek out
person who has the abiliry
and undertake the risk of nerr' business
8. Selecting the objectives and the proce&res
oppornrnities is referred to as
for achieving goals is referred to as
(A) a producer
(A) planning
(B) an inventor
(B) organizing
(c) a shareholder
(c) controlling
(D) an entrepreneur
(D) motivating

4. In a public limited company, the losses are

9 Which of the following demonstrates the
borne by the
characteristics ofa good leader?

(A) staff
(B) directors
I. Inspiring w'orkers
(c) community
II. Delegating responsibilities
(D) shareholders
III. Making intelligent decisions

(A) I and II only

(B) I and III only
5. In which ofthe fotlowing types ofeconomic
(c) II and III only
systems does the government make all
(D) I, II and III
decisions?

(A) Mixed
(B) Capitalist
(c) Command
(D) Subsistence

GO ON TO THE NEXT PAGE

 -J

r0. Under which of the following categories 15. Which of the following is NOT an example
would subsidizedmeals for employees fall? ofan unethical business practice?

(A) Fringe benefits (A) Money laundering

(B) Duty allowance (B) Nonpayment of taxes
(c) Wages and salaries (C) Misleading advertisements
(D) Workers' compensation (D) Retrenching inefficient workers

11 Which ofthe following activities ca:ried out 16. A post-dated cheque is one which
in a flrm will NOT be under the supervision
of the marketing manager? (A) was written no longer than six
months ago
(A) Packaging (B) is dated to agree with the date ofthe
(B) Purchasing document requesting payment
(C) Advertising (c) is dated for payment at a future date
(D) Distributing (D) is dated by the bank on the day the
cheque is presented for payment
12. An entrepreneur who wants to maintain
control of the business would be advised
17 Which of the following reasons can be used
to register the business as a
for voiding a contract?

(A) partnership
I. There was no consideration.
(B) sole ffader
(c)
il. There was no meeting of minds.
limited company
m. The agreement was not in writing.
(D) private limited company
(A) I and II only
13 Which of the following is a regulatory issue (B) I and III only
for the entrepreneu? (c) II and III only
(D) I, II and III
(A) Using a credit card to transact
business
(B) Offering hire purchase options to 18. A contract may be discharged by
customers
(cI Paying national insurance to the
(A) breach
government
(B) change of mind
(D) Advertising the business locally
(C) inconsideration
and regionally
(D) misappropriation

14. The MOST important use of collateral t9 Fred and his friends went to the cinema.
security to the lender is that it On his way out Fred fell and was injured.
What type of insurance would protect the
(A) establishes the financial position of owner of the cinema against claims made
the borrower by Fred?
(B) can be seized if the borrower fails
to pay (A) Industrial insurance
(C) improves the borrower's chance of (B) Public liability insurance
getting a loan (c) Fidelity guarantee policy
{D) gives the lender an idea of the state (D) Employers' liability insurance
of the business

GO ON TO THE NEXT PAGE

 -4-

20 Which of the following types of cheques 24. One feature of capital intensive flrms is that
allows an individual to receive cash on they
demand?
(A) raise large amounts of capital
(A) Open (B) provide capital for other flrms
(B) Crossed (c) use more machinery and less people
(c) Certified (D) use more people and less machinery
(D) Banker's

25 Which of the following conditions would

21. To which of the following industries does constitute a linkage between two industries?
a fi rm involved in food processing belong?
(A) Two firms manufacture similar
(A) Service goods.
(B) Extractive (B) Oneflrmsharestheuseofmachinery
(c) Constructive with another flrm.
(D) Manufacturing (C) Two firms are responsible for the
manufacture of different kinds
ofgoods.
22 Joseph has decided to leave his homeland (D) The output of one industry of the
of Jamaica to go to the USA in search of economy becomes the inPut of
a better life. This movement is referred to another industry'.
as

(A) brain drain 26. Which of the following resr:lts rs LEAST

(B) early migration likely to occur from gro*'th in an
(c) internal migration organization?
(D) external migration
(A) Greater productivitY
(B) More division of labour
IIem,23 refers to the following information. (C) Increased communication
(D) Increased capital inr-esment
Mr Jones receives a job offer from a
company in Barbados. In order to take up
this new job, Mr Jones decides to leave 27 Which of the follou'in,e commodius is a

his home country of Trinidad and move product of the manufacturing indusry?
permanently to Barbados.
(A) Cars
23 In Trinidad Mr Jones would be referred to (B) Gold
AS (C) Lumber
(D) Houses
(A) a refugee
(B) an emigrant
(c) an immigrant 28. The term 'loss leader'is BEST described
(D) a travelling officer as a product which

(A) has no real market value

(B) the retailer is unable to locare
(C) is sold cheaply to attract ctlstorrEs
(D) the retailer gives ar*-a1-to clrsto{x}ers

GO ON TO THE \TXT P.{GE

rr11AAfr1 nttr )i1 A
 5

'ro Under which of the following conditions 34. In a Caribbean territory there is only one
is a trade discount used? supplier that provides electricity to all
homes, businesses and communities. What
(A) Bulk purchases market structure does this BEST illustrate?
(B) Prompt payment
(C) Payment by cash (A) Duopoly
(D) First-time buyers (B) Oligopoly
(c) Monopoly
(D) Perfect competition
30. Which of the following is NOT a terms of
sale?
35. Which of the following terms is associated
(A) Cash with a stock market?
(B) Credit
(c) Shares (A) Costs and prices
(D) Hire purchase (B) Risks and benefits
(c) Rent and investment
(D) Premium and reward
31. Which of the following factors is LEAST
likely to influence consumer behaviour?
35 Tom invests his savings by buying shares
(A) Product price in a company. From this investment Tom
(B) Brand loyalty expects to receive
(c) Quality of goods
(D) Place ofresidence (A) profits
(B) interest
(C) revenue
32 A situation where a business gains editorial (D) dividends
space without having to pay for it is called

(A) publicity 37 Mr Jones has several bills of fixed amounts

(B) marketing to pay each month. His bank agreed to pay
(C) advertising them monthly from Mr Jones' account. This
(D) discounting service, provided by the bank, is referred
to as

33 The price of an article is usually high when (A) an overdraft

there is a (B) a fixed deposit
(c) a standing order
(A) large quantity for sale and few (D) a letter of credit
people wanting to buY
(B) small quantity for sale and few
people wanting to buY 38. One of the MAJOR functions of a Central
(C) large quantity for sale and many Bank is to
people wanting to buY
(D) small quantity for sale and many (A) issue notes and coins
people wanting to buY (B) issue stocks and shares
(c) accept deposit accounts
(D) make loans and advances

GO ON TO THE NEXT PAGE

 -6-

Items 3qJ0 refer to the following diagram 42. Governments can influence business
which represents the market for pears. The activity positively by reducing
original demand curve is DD.
(A) taxes
v (B) glants
(c) spending
7 (D) subsidies
G
I 6
0)

L
5 43 Which of the following is NOT regarded
as a role of taxation?

3 (A) To raise revenue for governments

(B) To influence the distribution of
u incomes and wealth
I D (c) To influence the investment
decisions of publicly owned
x
0
1234567 8 enterprises
(D) To influence total expenditure on
Quantity of pears (000) goods and services

39. PontZ on the diagram represents the

44 Which of the following actions bY
(A) price govemment is MOST likely to lead to an
(B) demand improvement in the standard of living?
(c) equilibrium point
(D) equilibrium quantitY (A) Printing more money
(B) Increasing the income tax rate
(C) Abolishing taxes on low incomes
40. The equilibrium Price is (D) Giving tax incentives to businesses

(A) s0.00
(B) $3.s0 45. Which of the following statements
(c) s4.00 accurately describes taxation as a means
(D) $7.00 of redistributing incomes?

(A) The rich pay taxes and the poor do

41. Which of the following measures may be not.
used by government to protect consumers?
(B) Tax is used to distibute income
more efficiently throughout the
I. Price controls countrY.
[. Custom duties (C) Tax is usedto spread income evenly
m Provision of subsidies between the higher and lower
income earners.
(A) I and II only (D) Thehigherincomeearnersaretared
at a higher rate to provide benefi ts
(B) I and III only
(c) II and III only to lower income earners.
(D) I, II and III

GO ON TO THE NEXT PAGE

n 1r,{nnln/E ,nl6
#. Which of the following BEST explains a 49 Which of the following practices would
'proportional tax'? contribute to the economic growth and
development of a country?
(A) The rate oftax increases as income
increases. (A) Increasedimportationofconsumer
(B) The same rate of tax is paid at all goods
income levels. (B) Decreased use of the country's
(C) Higherincomeeamerspayasmaller natural resources
percentage of income in tax than (C) Exporting skilled personnel to
lower income earners. developed countries
(D) Lower income earners pay a larger (D) Provision of loans and technical
percentage of income in tax than assistance for establishing local
higher income earners. businesses

Item47 refers to the following inforrnation 50. Export licences are issued MAINLY to
which shows fi gures taken from a country's
balance of payments accounts. (A) encourage local businesses to
produce more goods for exPort
Goods Services
(B) enable the government to control
the flow ofgoods being exPorted
Exports $160 m $300 m (C) indicate to the importing country
Imports $120 m 5140 m that the goods are of a high
standard
47. The country's balance of trade is (D) indicate to the importing country
the price at which the goods are
(A) -$ 120 m to be sold
(B) +s 120 m
(C) -$ 200 m
(D) +$ 2oo m 51 A measure which limits the quantity of
goods thatcitizens of a country are allowed
to buy from overseas is known as an
48. In calculating Net National Product,
depreciation refers to the (A) import duty
(B) export dutY
(A) increase in the price level (C) export quota
(B) decrease in the Price 1evel (D) import quota
(C) decrease in capitai stock value
(D) increase in capital stock value
52 Which ofthe following does NOT contribute
to an improved standard of living of a countT/?

(A) An increase in capital goods

(B) An increase in disposable income
(c) An increase in the countrY's
population
(D) An increase in investment in
technology

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0r2400r0tF 2016
 -8-
53. Which of the following is an example of 57. The purpose of CARICOM is to
tariffs?
(A) allow member states to collaborate
(A) Excise duties (B) foster interregional trade and
(B) Property taxes common services
(c) Custom duties (C) encouragetheftansferoftechnology
(D) Value added taxes within the region
(D) allow for unrestricted movement
of persons among the territories
54 Visible hade examines the difference between
a country's 58 Which of the following o r garuzations would
settle a dispute among banana-producing
(A) imports and exports of goods only countries of the Caribbean and Central
(B) imports and exports of services only America over preferential agreement with
(c) current account and capital account the European Union?
(D) output method and expenditure
method (A) World Trade Organization (WTO)
(B) Caribbean Development Bank
(cDB)
53. The term 'economic dualism'refers to an (c) CARICOM Single Market and
economy in which one sector is Economy (CSME)
(D) Organization of Petroleum
(A) highly dependent on local capital Exporting Countries (OPEC)
(B) highly dependent on foreign capital
(C) overpopulated while the other is
59 In periods of inflation, the ability to raise
underpopulated
additional capital for expansion is MOST
(D) technologically advanced while the
likely to be a problem for
other is technologically retarded
(A) sole traders

50 Which of the following is a benefit of the

(B) partnerships

CSME?
(C) public companies
(D) multi-national corporations
(A) A common trade policy
(B) Reduced cost of housing 60 Industrialization is an important strategy
(c) Reduced cost of air travel in the fight against poveffy. Which of the
(D) More equitable distribution of income following is a benefit of an increase in the
development of industries?

(A) A reduction in the level of exports

(B) Areduction in the level of imports
(c) An increase in the level ofmigration
(D) An increase in the rate of
unemployment

END OF TEST

IF'YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORI( ON THIS TEST.

0r2400t01F 2016
 coDE 01240010
FORM TP 2017104 MAY/JUNE 2OI7

CARIBBEAN EXAMINATIONS COUNCIL

CARIBBEAN SECOI\IDARY EDUCATION CERTIFICATE@

PRINCIPLES OF BUSINESS
Paper 01- General Proficiency
7 hour 15 minates

19 MAY2017 (p.m.)

READ TIIE FOLLOWING INSTRUCTIONS CAREFT]LLY.

1. This test consists of 60 items. You will have I hour and 15 minutes to answer them.

2. In addition to this test booklet, you should have an answer sheet. I

Each item in this test has four suggested answers lettered (A), (B), (C), (D). Read each item'
you are about to answeriand decide which choice is best.

4. On your lmswer sheet, find the number which corresponds to your item and shade the space
having the same letter as the answer you have chosen. Look at the sample item below.

Sample ltem I ,

I
The money that a business receives from the sale
of goods or services is called its Sample Answer
(A) assets
@@o@
(B) capital
(C) income
(D) resources

The best answer to this item is "income", so (C) has been shaded.

5. lf you want to change your answer, erase it completely before you fiIl in your new choice.

6: When you are told to begin, turn the page and work as quickly and as carefully as you can. If +
you cannot answer an item, go on to the next one. You may return to that item later.

DO No;f TURN THIS PAGE T]NTIL YOU ARE TOLD TO DO SO.

Copyright @ 2015 Caribbean Examinations Council

All rights reserved.

01240010tF 2017
 -2-

I Which of the following types of business 4. The term 'division of labour' can be defined
environment is MOST tYPical of the as the
Commonwealth Caribbean?
(A) organization oftasks in production
(A) Corporate state (B) assemblingofgoodsfordistribution
(B) Mixed economy (C) separation of tasks to complete a
(C) CentrallY Planned
job
(D) employment of different types of
(D) PerfectlY comPetitive
- workers

2. Labour is BEST defined as the

5. Private enterprise is run MAINLY to
(A) physical and mental caPabilities
used to perform tasks (A) create profits
(B) ability to carry out management (B) reduce inflation
functions effectivelY (c) distribute goods and services
(D) provide jobs for more PeoPle
(c) level of skills training received by
individuals who are working
(D) total number of Persons who hold
jobs in govemment ministries

3 AMAIOR function of the public sector

is to

(A) make a profit

(B) serve the entire PoPulation
(c) serve the interest qfthe sharelrolder
(D) inspire competition among
businesses I

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ot2400lolF 2017
 -J-

Items 6-7 refer to the followiitg diagram relating to the structure of an organization.

CEO

SaIeS Froduction Finance

Manager Manager Manager

HR Purchasing
Supervimr Supervimr

6. The purchasing supervisor reports directly 7 Which of the following positions would be
to the
BEST suited at'X'?
(A) CEO (A) ChiefAdvisor
(B) HR supervisor (B) Board of Directors
(c) finance manager (C) Managing Director
(D) production manager (D) Human Resource Manager

GO ON TO THE NEXT PAGE

01240010tF 2017
 -4-

Item 8 refers to the following information. 11 Under which of the following categories
would subsidizedmeals foremployees fall?'
Mr Lloyd, manager of LM Ltd, holds
regular staff meetings to listen to ideas (A) Fringe benefits
from employees before making decisions (B) Duty allowance
thatwould affect the future ofthe company' (C) Wages and salaries
(D) Workmen's comPensation

8. What leadership style does Mr Lloyd

employ? ' t2 Wiich ofthe following is NOT an example
of collateral?
(A) Autocratic
(B) Charismatic (A) Bond
(c) Democratic (B) Stock
(D) Laissez faire (c) Properly
(D) Money order

9 Management information system (MIS) is

defined as the 13. Which of the following individuals benefit
from having 'limited liability status'?
(A) use of computer technologY to
gather information for use in (A) Franchisees
making decisions within an (B) Shareholders
organization (c) Ordinary partners
(B) technologicalbenefitsgainedbyan (D) Debenture holders
organization for being Part ofa
well organized industry
(C) use ,of various factors within a t4 The condensed version ofthE business plan
i

business to reduce costs and is contained in the j

increase Profits I

(D) managementproc-qssresponsible (A) feasibility plan

for identifYing; anticiPating (B) marketing plan
and satisfYing consu'mer (c) keynote srunmary
requirements at a Profit (D) executive summaryl

10. Which of the following organizations 15. JB Auto Company decided to export car
is LEAST likely to use a managenient engines from Barbados to Trinidad. Which
information system? of the following methods is BEST for
transporting the engines?
(A) The national bank
(B) A shoeshine shoP (A) Air
(C) A department store (B) Sea
(D) A beauty suPPlies outlet (c) Rail
(D) Road

GO ON TO THE NEXT PAGE

otz400lolF 2017
 -5-

16. Cash irsed to secure a loan at the bani< is 2l- The term 'human resources'refers to
referred to as
(A) materialc and goods made by human
(A) collateral beings
(B) fixed assets (B) capital invested by shareholders in
(c) current assets a company
(D) fixed deposits (c) raw materials used in ' the
manufacture of goods
(D) persons available for productive
17. A'purchase order'is a and professional services

(A) request for additional goods

(B) notification of goods received 22: Which of the following types of capital
(C) statement of outstanding debts is used for the day-to-day operations of a
(D) ; document offe-ring to buy goods business?

(A) ' Fixed

18. A contract may be discharged by (B) Floating
(C) i Working
("; breach (D) Nominal
(B) change of mind
(c) inconsideration
(D) misappropriation 23 To which of the following industries does
a firm involved in food processing belong?

'19 Kiki sustained bu:rs while at work at a (A) Service

local ,fast food restaurant. Under which (B) Extractive
of the following insurance policies is she (c) Constructive
MOST likely to be compensated? (D) Manufacturing

(A) Public liability

(B) Fidelity guarantee 24. What impact would the introduction of
(C) Property guarantee mechanization in the production process
(D) Employers'liability have on a society?

(A) Reduction in jobs for unskilled

20. The monthly payments made to an workers
insurance company by its policy holders (B) Increased brain dtain in the
are known as economy
(c) Reduction in the pollution of the
(A) deposits countr5r's cities
(B) premiums (D) Provision of morejobs for unskilled
(c) instalments workers
(D) endowments

GO ON TO THE NEXT PAGE

0t2400t0rF 2017
 -6-

25. Which of the following conditions would 29 The term 'loss leader'is BEST described as
constitute a linkage between two industries? a product which

(A) TWo firms manufacture similar (A) has no real market value
goods. (B) the retailer is unable to locate
(B) One firm shares the use of (C) the retailer gives away to customers
machinery with another firm. (D) is sold cheaplyto attract customers
(c) Two firms are responsible for the
manufacture of different kinds
ofioods. . 30. Market equilibrium exists when
(D) The output of one industry of the
economy becomes the input of (A) buyers pay reasonable prices for
another industry. goods
(B) sellers are satisfied with the prices
paid for their goods
26 Which of the following businesses may (c) at current prices, the amount buyers
BEST be classified as a cottage industy? wish to buy equals the amount
sellers want to sell
(A) JMN Superstore, located in the rural (D) at the ruling market price, buyers
area do not want to add to the stock
(B) People's Cooperative Bank, located ofgoods they already have
in Trinidad
(c) Mary's Craft Supplies, located at
home 31. A situation whereby a business gains
(D) Peter and John's Company, located editorial space without having to pay for
in Jamaica it is called

(A) publicity
27 In the Caribbean, many people are hired (B) marketing
for sugar cane farming and very little (c) advertising
equipmentis used. This indultry canBEST (D) discounting
be described as t

(A) labour intensive 32. In a Caribbean territory, there is only one

(B) capital intensive supplier that provides electricity to all
(c) having low capital input homes, businesses and communities. What
(D) having high capital input market structure does this BEST illustrate?

(A) Duopoly
28. Which of the following terms describes (B) Oligopoly
a market consisting of a large number of (C) Monopoly
producers and consumers? (D) Perfect competition

(A) Oligopoly
(B) Monopoly
(C) Perfect market
(D) Imperfect market

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01240010tr. 2017
 -7-

33 Which of the following gives identity to a 3& Which of the following services is provided
specific producer's goods? by commercial banks?

(A) Label (A) Printingloney

(B) Patent (B) Selling stocks and bonds
(C) Brand (C) Controlling the supply of money
(D) Copyright (D) Accepting deposits from customers

34. Which of the following operations is an 39. One of the MAIOR functions of a Cenhal
example of sziles:promotion?

(A) : Warehousing (A) issue notes and coins

(B) Free sa:rrpling (B) , issue stocks and shares
(C) , Servicing goods (c) accept deposit accounts
(D) Gathering infoimation (D) ; make loans and adyances

35. Mr Jones has several bills offixed amounts 40. A stock market is identified with
to pay each month. Mr Jones made an
arrangement with his bank to make these (A) , costs and prices
monthly payments from his account. This (B) risks and benefits
service, provided by the banlq is referred (C) i rent and investment
to as (D) ;premium and reward

(A) an overdraft
(B) a fixed deposit 4t Govemments can influence business activity
(C) a standing order positively by reducing
(D) a letter of credit
(A) taxes
(B) grants
36. Tom invests his savings by buying shares (c) subsidies
in a company. From this investrnent, Tom (D) expenditure
expects to receive

(A) profits 42. A'price control'may be defined as a

(B) interest
(c) revenue (A) tax on goods and serwices
(D) dividends (B) government ban on imports
(C) grant given to producers to reduce
their prices
37. Investnent can be defined as (D) government limit on the price of
goods or serices
(A) the stock of goods in a country
(B) the amount of money available at
a given time
(c) additions to the capital stock of a
country
(D) the amount of capital owned by the
govemment

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ot24mtolF 2017
 -8-

43. The success of a govemment's economic 47 Which of the following measures are used
policies can be MOSTeffectively measured by govenrments to redistribute income?'
by
(A) Custom duties and levies
(A) an increase in the level of policies (B) Consumption tax and tariffs
(B) an increase in the standard of (C) PAYE and National Insurance
Iiving (D) Excise duties and value added tax
(c) a decrease in the level of
employment
(D) a decrease in the volume of 48. Acountyhas a favourable balance oftrade
production when

(A) it sells more than it buys

44. Which ofthe following forms oftaxation can (B) it buys more than it sells
be classified as 'direct'? (c) imported goods are cheaper
(D) there are no restrictions to trade
(A) Income tax
(B) Excise duty
(c) Purchase tax 49 Which ofthe following practices would NOT
(D) Customs duty contribute to the economic development
and growth of a county?

45. Which of the following is a function of a (A) Provision of loans and technical
Chamber of Commerce?
assistance for establishing local
businesses
(A) Creating employment (B) Provision of more infrastructure
(B) Protecting the entironment within the country
(c) Assisting in securing markets for (C) Increased use of the country,s
producers j
natural resources
(D) Providing financidl aid to hurricane (D) lncreasedimportationofconsumer
victims i goods
i

ii
46. Which of the following s[atements BEST 50 Education contributes to a country,s
explains a 'proportional tai,? economic growth by ensuring that the
workforce is highly
(A) The rate of tax increases as income
increases. i (A) mobile
(B) The same rate of tax is paid at all (sl efficient
inc6me levels. (c) classified
(c) High income eamers pay a smaller (D) structured
percentage of income in tax than
low income eamers.
(D) High income eamers pay a larger
percentage of income in tax than
low income earners.

GO ON TO THE NEXT PAGE

ot2400t0F 2017
 i
-9-
I
I

51. Whilh of the following types of

I
55 The term 'economic dualism' defines an
restrictions limits the quantity of goods economy in which one sector is
that ditizens of a country are allowed to .O

buy fiom overseas? (A) highly dependent on local capital

i (B) highlydependentonforeigncapital
(A) i Import duty (C) overpopulated while the other is
(B) i Export duty underpopulated
(c) Export quota (D) technologicallyadvancedwhilethe
(D) Import quota other is technologically retarded

52 licences are issued MAINLY to 56. The purpose of CARICOM is to

(A) encourage local businesses to (A) allow member states to collaborate

produce more goods for export
(B) indicate to the importing countrY
the price at which the goods are
to be sold
(c) indicate to the importing country
that the goods are of a high
standard
(D) enable the government to control
the flow of goods being exported
(B) , encourage the transfer of tech-
. I nology within the region
(C) foster interregional trade and
common services
(D) allow forthe unrestricted movement
of persons among the territories
s7 Which of the following terms defines a
continirous rise in the general level ofprices?

53. The buying and selling of goods and (A) Inflation

senrices among counffies is called (B) Reflation
(c) Deflation
(A) balance oftrade (D) Depression
(B) international trade
(c) balance of payment
(D) international marketing 58. In periods of inflation, the ability to raise
additional capital for expansion is MOST
i likely to be a problem for
54. Which of the following is NOT a benefit
of international trade? (A) partnerships
(B) sole traders
(A) Producers are able to increase their (C) public companies
market size. (D) multinational corporations
(B) Political links are developed with
other countries.
(c) Lnportrestrictions can be imposed
on foreign items.
(D) A greater variety of goods is
obtained from overseas.

GO ON TO THE NEXT PAGE

or2400t0tF 2017
 - l0-

59 Which of the following is NOT a benefit 60. Which ofthe followingorganizations would
of industrialization? settle a dispute among banana-producing
countries of the Caribbean and Cenfral
(A) Areduction in the level of imports America over preferential agreement with
(B) An increase in the level of exports the European Union?
(c) An increase in the unemployment
rate (A) WorldTradeOrganiz,ation(WfO)
(D) A decrease in the unemployment (B) Caribbean Development Bank
rate (cDB)
(C) CARICOM Single Market and
' Economy (CSME)
(D) Organization of Petroleum
Exporting Countries (OPEC)

END OF TEST

rF YOU FINISII BEFORE TrME rS CALLED, CHECKYOI R WORI( ON THIS TEST

otz40oto/F 2017
 B't· ·· cs' 2.
[F·: LJ I'r\"."Pt,-q [l
ofa s o l e p r op r ie tor
wwch ofthe fo uo wing typ e s of b u sin e ss 4. The le galre spom ibility
owe d by-the b us i nes s is
e nviro nme nts is MOS? typic al o f.. T h e to p ay any mo ne y
as
Co mmo nwe alth Ca r ib b e a n ? d e sc r ib e d

risk
(A)
(A) Cor p or a te s tate insutance
Mixe d e c on om y (B)
(B) imite d liability
(C) Ce ntrally p la n n e d (ci
un\imite d liability
Pe rfe ctly co mp e titive @)
(I»)

Mvate e n te r p r ise is
nm MAINLY t o
NOT a fu n c tion 5.
Whic h ofthe follomg i8

of m one p c r e a te p ro Ets
(A)
(B) r e d u c e inflatio n
(A) Indivisibtlity d istr ib u te g ood s a n d
se r vic e s
S tor e of va lu e
(ci
(B) fo r m or e p eo p l e
(D) p r ovid e jobs
(C) Me a su r e of va lu e

(D) Me d ium of e xc h a n g e
a n d th e p r oc e d u r e s
S e le c tin g th e ob je c tive s
m as
Mr achie ving g oa ls is r e fe r r e d
A MAJOR functio n of th e p ub lic s ec to r

is to
(A) p lanning
(Bi or g a n izin g
make a proEt co ntro lling
(A) (ci
(B) se r ve m e e n tir e p op u la tion (D) mo tivating
se r ve th e i nteres ts
of O e s hareho l d er
(C) a m on g b usi-
(D) in sp ir e co mp e titio n
nes s es
 W r e fe r s to
the
following d ia g r zu n
re lating to th e str u c tu r e
of an o rg a

7. Mch· M& flihbMng p o sitio ns wo uld b e BEST su ite d a t X?

m) Chief ad viso r
(B): B6ard ofhilectors'
(C) Managirig ilire c tor
(D) Human re so urce manag e r

Wnich of the following a c tion s d e m on -

wwch of the following actio ns BEST 9.
I
g u u u I CAU W
-describes c harac nsnc s 01 a
str a te th¢
a n authoritarian le ad e r?

insp ire s wor ke r s

Willing 1
take sugge stions
(A) to
n. D e le g a te s r e sp on sib ilitie s
(B) Allowing workers toplan the ir o wn Make s intelligmt d e c ision s
m.
work

(D)
CUUDWULUVM
Consulting stake holde rs who
without@)
ml l a n d m o nly
nand m only
(C)
b e affe c te d by de c isiom
(Di I, n and m
10 :
Whic h of th e
fo llo wing nrc
b enefits of 14
Th o c on d e n sM
J Vc rai o n ofth e b usinm
i a c o ntai ned p l an
Instant fe e d b a c k in th e
II
III mvides
Ugem
e vid e n c e (A) fe a sib ility p l a n
for d e ta ile d (B)
mes s ag es m a r ke tin g p l an
(A) (C) ke yn ote str m n n a r y
I and U o nly
(B) I and tn o nly
(D) e xe c u tive mmary
(C) nand III
only
An a n a lysis of th c
viability 6f a Minm
i d ea a n d an e xa m in a tion of
the d ia e r e n t
aswts of op e r a tin g a b us i nes s is kn own
Und e r whic h of th e
wo uld s ub s i d i z ed meal following
s for
c ateg o ri es
e m p loye e s fal l ?
(A) b u sin e ss p la n
'(A) Fringe b e n e Gts (B) marke t surve y
(B) (c s fe asib ility stud y
Duty a llowa n c e
(C) m) r e se a r c h p r op osa l
Wa g e s a n d s al ari es
m) Wormen's c om p e n sa tion
16 An e n tr e p r e n e u r may r e d u c e
Ms risk of
lo ss by
wHch o f. The following is a re gulatory
issu e for the e n tr e p r e n e u r ?
(A) p lanning ahead
(B) se c u r in g b ank
(A) Using a c r e d it c ard to tr a n sa c t l o ans
(C) sp on sor in g
b u sin e ss co mmunity prokts
(D) p urchasing a d d ition a l Gxe d a s s e t s
(B) omring h ir e p urchase o p tio ns to
custo me rs
(C) Paying national insurance to the IMEU r e fe r s to th e
g o ve rnme nt following case.

(D) Advertising the b usine ss locally Me lissa, a

te e n a g e r, wa n te d to e a m e xtra
and regionally inco me , so sh e
to omd wm
c a rs for $10 .
Miss Hisds brought h e r car to b e
wa sh e d _
Me lissa washe d th e c ar a n d
Cash use d to se c u r e a loan at the bank Miss mds
is
paid he r $15.
re fe rre d to as

17. What type of c on tr a c t i s d e m on str a te d in

(A) c ollate ral the c a se ab o ve ?
@) fixed a sse ts

(C) c urre nt asse ts

(A) S o cial
m fixed de posits (B) Simple
(C) Busine ss
(D) Specialty
 A c on tr a c t my b e d i s c htug c d by

WH:, H:
!
(A) b reac h ₤ piz
(B) c h a n g e of m in d
(C) in c on sid e r a d on 1ti.
(Di m isa p p r op r ia tion

wwch ofthe mllo wing fa c tom p r e ve n t (8 )

an agre tm m tm m b e in g om id e r e d avalid
c
c on tr a c t? 23. T"hi"
(A) Co mid e rad o n '
'"h: :""'"nd. Tri.. Dm%
(B) Le g al p u r p ose (A) s'"i"
(C) Misr e p r e se n ta tion
(D) omr a n d a c c e p ta n c e

The monthly paym e nts bade t o an

in su r a n c e c om pany. By its polic yholde rs 24. whi. h_ of
are]moml as LEAST lik.Iythfolio:"g""lts
t.O'"r fr"gram in is
'"ani. Ti o n7
an

(A) d e p osits
(B) p re miums (A) GT'"P.'" '"vity
(C) instalme nts (B) G"".'"mi°°'".Bo-
(D) endoments (C) In'""d.. Mmm· .T i. n
m) ln'"as, d c apitd in...Tm .. t
mch ofthe following co nd itio ns would
c om im te atink¢ ge be twe e ntwoindustrie s? 25. Pr. Du. Dvity can b e m e a sm e d by
(A)

(B)
moms
g o o d s.
One firm shares the use of
m anufac ture similar
(A)
m
niachincry with anothe r lirm,
(C) mo lirm s are re sponsible for the
m anufac ture ofdimrentkinds of
goods.
m Tb e output of o ne industry of the
e c onom y b e co me s the input of
anothe r industry.
 ch of t h e
H§ T
BES followin g
b e c l as s i fied
ae a
busineaaea may 31
c o ttag e ind usq ?
(A) Marys Cr a ft S uppliea, l o c a t e d at
ho me
( B) J M N S up emmrei lo cam in a ruml
area
(C) P eter a n d J o hn' s
c o mp an% l o c ated
i n J amni c a
1D) Pe iople '8 Co o p erati ve Bam l o c a te d 3 2.
in mdad

2 7. T he amo unt of la b ou r · a va ila b le fo r

p r od u c tive activity is]m own a s

(A) e m p loym e n t
(B)]abour for c e
(C) l ab o ur m ove m e n t 33.
(D) e m c ie n c y of la b ou r

(A) La b e l
Me BES T m e d iu m of a d ve r tisin g fo r an (B) P atent
a r e a wfth Mg h ve h ic u la r traflic is (C) Br a n d
(D) Copyright
(A) p oste r s
(B) m a g a zin e s
(C) n e wsp a p e r s 34. wwch of the fo uo wing fa c tor s i s LEAST
(D) p o int of me d isp la ys like ly to in a u e n c e c on su m e r be haviom

(A) mduct p r ic e
Me te rm ' ]oss le a d e r ' is BEST d e sc r ib e d (B) Br a n d loyalty
as a p ro d uct which (C) quality of g o o d s
(D) P la c e of r e sid e n c e
m) h a s no r e a l m a r ke t value

(B) th e r e ta ile r is mab le to loc a te

(C) th e r e ta ile r g ive s away to c u stom e r s 35. wwch ofthe following d oc u m e n ts sh ows
(D) i s sold cb ¢ aply to a ttr a c t c u stom e r s o wne rship of imp o rte d g ood s?

(A) Bill of lad ing

30. Mduc\price, prom otion a n d p la c e a r e (B) Import lic e n c e
co mp o ne nts of a (C) Letter of cre d it
(D) Bill of e xchang e
(A) m arke t study
(B) marketing mix
(C) m arke t re se arch
(D) sa le s prom otion
 36. J o hn wL. sh
m
i n h is
Xbm fr om
commmty.
a nwby
39. JB Auto Com pany d e c id e d t o e xp o rt c ar
e n g in e s Eo m. Barb ad o s to T rinid ad .
He b u ys g ood s
a n d se lls
small
th e m in of th e following me tho d s is BEST Whic h
su ite d
sup e rmarke t J oh n wo uld b e fo r transp o rting ae c nginm ?
to h is custo mm.
qu a n titie s
m
Air
Io
.' re fe md (A)

(A) m agent
a b r oke t
(Bi
(C) a r e ta ile r (D) Ro ad
wh ole sa le r
(Di a

40 A mck m arke t is ide ntiEe d with

c an b e c l eaned m
37. Inve sme nt
(A) c osts a n d p rice s
th e stoc k o fg o o d s ofa c ountry
(A) (B) risks and b e ne 8ts
m th e am om t'of mo ne y availab le at (C) re nt and inve stm e nt
a g ive n time (D) pre m ium a n d re ward
(C) a d d ition s to th e cap ital sto ck of a
c om try
(D) tb e amo unt ofc apital owed by the 41 Mfhich ofthe following is the Gnal
g o ve rnme nt ste p in
a supply. c hain ope ration?

(A) mf ormation of nam r e sou r c e s

im
3& Log isd c s in b u sin e ss is de m e d as
into mshed p ro d ucts
@) Movement to and
(A) manag ing , d ata from co nce p tio n, storage of raw
m ate rials in the ware house
p r od u c d on and stor a g e to · reoeval
(C) Proc e ssing of· raw m ate rials and
into mshed goods
co mp o ne nts
(D) Delivering the nished product
& om Point of origin to
point of
''AW de stination

the n follomg through with

Pl odMon
(b) managing re sourc e s from the
Point of acquisition,
storage
and inansportation to
their fiml
de stinadon
r:' A d o b «l p o « i d o ni ng ryrte m (O P S ) p mvi d ea 45. A d eb q nM re ho l d er i s o ne wh o

in ve n tor ie s and
(A). Isaid a G xed r a te o f i n b e re s t

c om p a n y mnk es p ro l l t*
Um
m a n a g e th e ir
(B) mmt be p ai d any ounm o w\n*
red uc e e xp e n se s
th a tc a n b e m him i n the fo llo win8 ye a r
(B) s a te : lite :racking acrvims

.'
(C) has fir st c l ai m o n a n y p ro frts and
us ed i n c om m e r c ia l and p ers o nal
is

p ai d a fixe d ra t e o f d ivid e n d s
a p p lic a tion s
(D) is end tl ed to a fixe d r a te o f i nteres t
whe the r o r n ot th e c om p a n y
incre asing th c c tlic ic nc y 0 1
makm p r ofits
the ir m a n a g e m e n t in for m a tion
syste m s

-designem a void wa ste b y c r e a n n g

manufacture rs in
46. Gove r n m e n ts ofkr s ub s i d i es to b u s i n e s s e s m

m od e ls to a ssist
th e of im p or te d
mmg b m in e ss d e c ision s (A) in c r e a se p r ic e
g ood s
(B) in c r e a se c ostsa n d u ltim a te lyp r ic e s
a m ou n ts (C) red uc e c o s t s a n d ultim ue ly p ri c es
Mr J o nes h a s se ve r a l bim o flixe d m a oe m (D) fo rc e the m t o p ay c or p or a tion ta x
t o p ay eac h m on th . Mr J o nes
.

b a n k to m a ke th e se
amng e me nt with h is
fri Dm Ms a c c ou n t.
Ms
m onthly p ayme nts
th c b ank, is r e fe r r e d
47.0ne of th e MAJOR funcd o m of a c entral
se r vic e , provide d by b a n k is to
to a s

(A) issu e n ote s and c oin s

(A) an ove rdraft
(B) issu e stoc ks and sh a r e s
(Bi a fixe d d e p osit
(C) a c c e p t d e p osit a c c o u n t s
(ci a stand ing or d e r
(D) m a ke loa n s a n d a d va n c e s
(Di of cre d it
.t:
a le tte r
:

mch ofthe following is NOT a s o u rc e of

f——
fo rms of taxadon 48.
44. vn]ich bf the following inco me fo r a n ind ivid ual wh o eng ag es in
can b e c la ssib e d as ' d ire ct' ?
p e rso nal b ud g e ting ?

(A) Inco me tax

(A) S alarie s e a r n e d
Excise duty
@) (B) Loan re p ayme nt
(C) Purchase tax
Inte re st fiom sa vin g s
(C)
(D) Custoprs duty
(D) Dividends fro m inve stme nts
 WWCh of
I""d.d""II.
54. th c fo llo wing mc aaures c an b c

m""U

d
ba m
c o ns i d ered as in e c n tivc s to industrie
49.
byb· (A) r r a in in g e m p loye e s
De valuing l o c al
curre ncy
(B)

W....
(C) In c r e a sin g c oTp or a tion tax
(D) Inre asing in su r a n c e p re miums
§
."db""""· ·T gr'" SS. T he te r m ' e c on om ic d u a lism ' d e fin e s an
50.
¥: =A;, -..Ido'" '"gl'"tb· e c on om y in whic h o nc se c tor is

[A)-. Bil (A)

(B)
hig h\y d e p e n d e n t on lom cap ital
Mghly d e p e n d e n ton for e ig tr c a p ita l
1.. I£. d (C) ove r p op u la te d while th e oth e r is
( C)
(Dj
m· me d und e rp o p ulate d
(D) te chno lo g ically a d va n c e d while th e
oth e r is te c hnologic ally r e ta r d e d

m""'""?: '"me.
'_b.MCIT.Er..Ti.'"'"51Jred
p o; I' "
go· t' s e co . Om ic

56. Whic h of th e following m e a su r e s are us ed

p r ote c t th e e nviro nme nt?
le'" P.h.I..
to

(A) an in.R e a s e
in Me of
(B) an inm asc in Ue stand ard ofliving 1. Re c yc ling
(C) a decr, ase I. the level of II. De fo re statio n
lll. Wate r co nse rvatio n
(D) · d.. Re . S e I. the volum. of
pmdu. T i_ (A) land 11 only
(B) I and m only
(C) and m
Mch of U. Mllowing measm m u se d
11
only
52.
(D) I, n and 111
by go. Emme nts to re d is» ibute inco me ?

W
m
' Custo m d utie s m d 1,
Commption Mx end
vi.. 57. T he MAN p u r p ose of cmcoM is to

(C) TAYE and natio nal insruance

(A)' allow me mb e r sta te s to c olla b or a te
m) Exc ise d utie s m d mue a d d e d tax foster interregional
(B) trade-and
co mmo n se r vic e s
33. The buying and S . Mng of (C) e n c ou r a g e th e tr a n sfe r o fte chno lo g y
g o o d s and within th e r e g ion
se r vic e s amo ng co untrie s ie calle d
(D) allo w fo r th e m e stric te d mo ve me nt
of p e r som territories——
·

a m on b th e
(A) '
b alance of Mde
(B) inte rnational had e
(C) b alance of paym e nts
@) inte rnational mmketing
·
 m c ontrol'm ay b e d e fin e d as a 60 wwch of th e following or g a n iza tion s

a
wou ld s e ttl e a
d isp u te a m on g b anana-
tax on g ood s a n d se r vic e s
c ou n tr im of t h e Cari b b ean a n d
p ro d uc i ng
(Bi g o ve rnme nt b a n on im p or ts Ce n u a l Am e r ic a ove r a p referenti al
g rant g ive n t o p r od u c e r s to r e d u c e

« D) g o ve rnme nt lim it o n th e p r ic e of
(A) '

Wo rld Tr a d e O rg aniz atio n (WTO)

:
g ood s or se r vic e s Carib b e an De ve lopm e nt Bank
(Bi
(CDB)
(C) CARICOM S ing le Marke t and
59}.. wwch
WWCh of th e following, whe n in c r e a se d , Eco no my (CS ME)
wo uld NOT c on tr ib u te to th e im p r ove d (D) of Pe trole um
Organization
stand
sta n of living of a co untry?
n d aard
Exporting Cou n tr ie s (OPEC)

(A) Capita]goods
(B) Disposable in c om e
(C) Me c ountry's p o p ulad o n
(D) An inve stme nt in te chno lo g y