The Advanced Numeracy Test Workbook - Mike Bryon [34]
Q20. Answer D.
Explanation Raising prices might ensure that profits are maintained but it would not stabilize a market. The other suggestions are used by governments in an attempt to stabilize for example currency and labour markets.
Q21. Answer C.
Q22. Answer B.
Q23. Answer A.
Q24. Answer C.
Q25. Answer A.
Explanation ‘Seed money’ is a term used widely by venture capitalists and relates to the first contribution they make to a start-up business.
Q26. Answer D.
Q27. Answer C.
Explanation A royalty is earned so as long as the product is an intellectual one such as a literary work or computer program.
Q28. Answer B.
Explanation In this context underwriting is provided by an investment bank to protect against losses during the issue period.
Q29. Answer A.
Explanation: Revenue is earnings before the cost of sales. It is also governmental tax receipts.
Q30. Answer D.
Explanation A covenant is a contractual agreement to do or not do something.
Q31. Answer B.
Explanation Verbal contracts are just as binding as written ones. They are simply harder to enforce because of the possible lack of evidence of the terms of the contract. Notice would only avoid a risk of penalty if the contract allowed for this.
Q32. Answer C.
Q33. Answer A.
Explanation In financial markets a rally means that widespread increases in prices are occurring.
Q34. Answer A.
Explanation Quality assurance is a management method that seeks total quality and zero defects. The meeting of groups of employees to discuss quality is called ‘quality circles’.
Q35. Answer B.
Q36. Answer D.
Q37. Answer C.
Explanation It is generally held that the higher the risk the higher the return so the relationship is a positive correlation.
Q38. Answer C.
Explanation This term occurs in the technical press when it covers predatory takeover bids.
Q39. Answer D.
Explanation The term ‘petrodollars’ refers to the funds invested in Western banks, and for a number of decades was key to understanding international economies.
Q40. Answer A.
Q41. Answer B.
Q42. Answer D.
Explanation These loans are for large sums so the banks spread them across a number of participating institutions. One lender takes the lead in the administration of the loan.
Q43. Answer C.
Explanation The law rules that it is for management to work constantly towards avoiding the natural state of inactivity towards which all businesses are heading.
Q44. Answer B.
Explanation An example was when people stopped going to local shops and bought their goods in supermarkets instead. A move from competition to monopoly would be an example of a paradigm shift but is not the meaning of the term.
Q45. Answer A.
Q46. Answer B.
Q47. Answer B.
Q48. Answer A.
Explanation Negative amortization results when the amount owed increases despite repayments. It might occur when for example the repayments are fixed at a particular rate but the interest increases to such an extent that the repayments fail to meet the interest charges.
Q49. Answer B.
Q50. Answer A.
Q51. Answer C.
Q52. Answer D.
Q53. Answer D.
Q54. Answer C.
Explanation It is also a method of inventory costing.
Q55. Answer C.
Q56. Answer B.
Q57. Answer B.
Q58. Answer D.
Explanation The line forms a J shape. Kondratieff was the economist who described supercycles of growth and recession.
Q59. Answer C.
Q60. Answer A.
Explanation Pull inflation occurs when there are too few goods to meet demand. Suggested answers C and D are examples of pull accounting.
Q61. Answer C.
Explanation Demand for luxury goods is considered highly elastic because changes in price greatly affect demand.
Q62. Answer D.
Explanation A machine for example as it ages costs more to maintain so the surplus income it generates falls. When the surplus income falls below the operating cost the item is said to have reached the end of its economic life.
Q63. Answer B.
Q64. Answer C.
Explanation A Dutch