SECTION ONE (Compulsory) :Single-choice questions 8 a% ^5 l6 ]* x o+ R8 T7 O+ Q
from the following four options, select a correct and fill in its labeling the brackets. (A total of 10 points)
: Q7 x( h! a5 |3 a ^' D 1. Which belongs to the Tightening of fiscal policy tools? ( )
2 } o; T: t& _) M8 E- V A. Reduce government spending and increase tax revenue 9 H8 e# f! Q2 |' L/ y; @; W, e/ _* h, s
B. Reduce government spending and reduce taxes / G5 h) T# A4 f0 _) {$ ?1 N
C. Increasing government spending and reducing taxes : N+ B* a4 d) Y
D. Increase in government expenditure and increase tax revenue 6 k/ g; A5 g2 y7 Z+ d! Y
2. What market is the Most in need of the advertising? ( )
$ {5 p3 ^& l3 a+ E1 I: d9 r A. Fully competitive market . F( J- J# P* L+ H5 x9 [5 {& I1 z! P& l
B. Monopolize market g% `: A4 r! y; V1 q. c* w' W3 U5 s
C. Competitive monopoly market
4 Y, ~! P" Y8 g* M7 s& g, i D. Oligopoly market 4 N: X+ W# p \5 A
3. The value of national output: ( )
! e8 D/ b. T) S8 Z* G3 s A. Is the same of the output of all businesses.
* F$ W% e8 i6 Z( R2 Y B. Is the aggregate of output of employed persons.
7 J) y: N( @" l4 g C. Is synonymous with aggregate manufacturing output.
# C! ?" Q+ F8 q& J& z D. Utilizes the "added value" concept.
# \* d! }. w. n0 x" _" e 4. With C = 10 + 0.7Y and the level of income changing from $70 billion to $80 billion, the increase in consumption and the revised average propensity to consume (ape) respectively would be: ( ) ; O9 n$ i& J4 d+ |$ C! R+ P% B
A. $9 billion and 0.78.
% U. G. A5 |( D) _ B. $6 billion and 0.8.
4 a! j+ n9 V; q- ]; s8 u3 l C. $7 billion and 0.79. ) ~ c: |1 _% Y j
D. $7 billion and 0.825. 3 w( D0 w7 T( T+ r* _2 a3 G" }9 f
5. Which of the following goods is likely to have the most elastic demand? ( )
7 s) \- Z' \: }' V! { N A. A particular brand of breakfast cereal. * H% ] o8 r9 P% [9 I$ X4 c+ g
B. Breakfast cereals in general.
; A# E2 v% h) O3 V$ f" A C. A very cheap good on which not much is spent (e.g. matches newspaper) . 1 t$ S$ j; {% ]8 k. i
D. An essential good.
$ a5 ?- m2 \4 V! ^! N$ |9 k 6. School students paying a lower fare than adults on the MTR trains, or cheaper tickets to the theatre, is an example of: () # w1 Y- x* S! X7 r
A. The suppliers making less profit because some customers pay a lower price.
* v" ~ Y1 i8 ?& | B. Consumers obtaining more consumer surplus.
0 q9 m' u5 ~! z0 \8 Y! C7 Y C. Price discrimination allowing the suppliers to make more profit from charging a higher price to
( ^9 H0 B* B5 r7 S( H2 l customers whose demand is more elastic.
; [# @+ i: `$ K/ w5 { D. Price discrimination allowing the suppliers to make more profit from charging a lower price to customers whose demand is more elastic.
0 ~, n9 u; G) ^ z* @( G 7. A futures trader goes long one futures contract at $450. The settlement price 1 day before expiration is $500. On expiration day, the future is trading at $505. The least likely way the futures trader will lock in her profits on expiration is: ( )
( q2 x$ ]% T' P0 V( t. N$ ^ A. Take delivery of the underlying asset and pay $500 to the short. ' t3 I; A* r# b2 X4 i t! Y. b: x9 ?
B. Close out the futures position by selling the futures contract at $505.
6 o( c1 j9 `5 {* r: z) Y C. Take delivery of the underlying asset and pay the expiration settlement price to the short.
0 L7 p7 [9 E. Z$ o: y- K D. Cash settle the futures and receive the difference between $500 and the expiration settlement price.
8 l+ C4 V: s" o% E$ l* K 8. In the context of break-even analysis, the Margin of Safety for a firm is: ( )
; \. J( o |7 p# \- M" c A. The difference between the sales revenue achieved and the break-even revenue.
. ]1 d3 a5 |& L1 R6 k: ~7 I5 @9 q B. The difference between planned (or actual) output and the break-even quantity in a particular time period.
. W# f: y. U) }- | C. The percentage difference between planned (or actual) output and the break-even quantity. ) j8 X+ l/ C5 K# i
D. The difference between planned (or actual) output and the break-even quantity.
/ U7 e. w; D7 G( I) h- n: o 9. There is 5-year annuity of $3,000 per year. However, the first payment will not pay until year 3. Assuming the interest rate is 10%, calculate the present value of this annuity. ( ) ) G6 B9 p0 H" e) i! @. c; B
A. $8397.
7 u5 O4 w* s$ P! z1 }7 z S6 M8 U B. $9,399. : F* |. P$ J; p+ b$ O' k
C. $10,258.
2 x; ?- e9 A- i( \3 p D. None of the above.
6 t4 `, r, q$ }- c5 J- z 10. Hub Global, Inc. has issued two classes of debt securities to finance its operations, a first mortgage bond and debenture bonds. All else equal, will the default and recovery rates of the debenture likely be higher than the first mortgage bond? ( ) |