CPA Business Environment and Concepts (BEC) : Economic Markets
Study concepts, example questions & explanations for CPA Business Environment and Concepts (BEC)
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Example Questions
Example Question #175 : Cpa Business Environment And Concepts (Bec)
Which of the following types of unemployment typically results from technological advances?
Cyclical
Short term
Frictional
Structural
Structural
Cyclical results from declining DP and frictional is normal unemployment. Short term is a broad description not applicable here.
Example Question #176 : Cpa Business Environment And Concepts (Bec)
Lagging indicators of the economy ____ economic activity where as leading indicators _____ economic activity.
Follow, predict
Predict, follow
Coincide, follow
Predict, coincide
Follow, predict
While both indicators are necessary to assist in viewing the bigger picture of the economy as a whole, leading assist in taking action and lagging aid in understanding.
Example Question #11 : Economic Markets
In the long run, a firm may experience increasing returns due to:
Economies of scale
The principle of substitution
Comparative advantage
Law of diminishing returns
Economies of scale
Economies of scale is the process by which the cost to produce something decreases with increased production and scale.
Example Question #11 : Economic Markets
Which of the following segments of the economy will be least affected by the business cycle?
Healthcare industry
Machinery and equipment industry
Residential construction industry
Commercial construction industry
Healthcare industry
Healthcare services are part of an industry that has an inelastic demand. Regardless of the status of the economy, consumers will always have the same need for healthcare service.
Example Question #12 : Economic Markets
Elasticity of demand or supply is:
A measure of how flexible the firm is with respect to responding to the needs of consumers
A measure of how sensitive the demand for or supply of a product is to a change in its price
A measure of how well a firm's strategic plan is able to adapt to changes in demand or supply
A measure of how flexible the demand or supply of a product is when preferences change
A measure of how sensitive the demand for or supply of a product is to a change in its price
Elasticity of demand or supply is a measure of how sensitive the demand for or the supply of a product is to a change in its price.
Example Question #13 : Economic Markets
Frictional unemployment refers to unemployment resulting from:
The time needed to match qualified job seekers with available jobs
A recession
Seasonal decreases in demand for labor
The skills of workers do not correspond to the skills demanded by employers
The time needed to match qualified job seekers with available jobs
Frictional unemployment arises from workers routinely changing jobs or from workers being temporarily laid off.
Example Question #14 : Economic Markets
During a period of high inflation, which of the following groups in society would be most likely to gain?
Those holding a large amount of money
Those with a fixed income
Those with a fixed amount of debt
Workers under contract without a cost of living adjustment
Those with a fixed amount of debt
During a period of high inflation, those with a fixed amount of debt will repay their debt with inflated dollars and are thus likely to gain.
Example Question #6 : Market Structure
There are ___ methods of measuring GDP, and _____ is not a method of measuring GDP.
2, Output
3, Income
3, Expenditure
2, Expenditure
2, Expenditure
There are 2 methods of measuring GDP, expenditure, and income approaches. There is no GDP measuring method known as the Output approach.
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