Free Practice Questions for CIPS A6 Exam

Question 1

Which of the following best describes 'balance of payments'?

AThe record of a country's monetary import and export transactions during a year

BThe record of exchange rate movements during a year

CThe record of all payments made by a government department during a year

DThe record of all revenue from taxes received by a government during a year.

Correct Answer: B. The record of exchange rate movements during a year

Question 2

Which of the following best describes a 'factor market'?

AA market where money is provided to help organizations to grow

BA market where goods and services are sold to customers

CA market where labour, raw materials and capital are bought and sold

DA market where advice and consultancy services are bought and sold.

Correct Answer: D. A market where advice and consultancy services are bought and sold.

Question 3

Q3 Which of the following best describes the pricing policy known as 'promotional pricing'? (2 marks)

AA high price aimed at quick recovery of costs

BA price in line with that being charged by competitors

CA temporary price reduction to increase sales in the short term

DA low price set to gain a large share of the market.

Correct Answer: C. A temporary price reduction to increase sales in the short term

Question 4

Which of the following statements best describes the economic term 'inflation'?

AToo much money chasing too many commodities

BToo few customers chasing too many commodities

CToo much money chasing too few commodities

DToo many customers chasing too many commodities.

Correct Answer: D. Too many customers chasing too many commodities.

Question 5

Which of the following describes people leaving one job and moving to another? (2 marks)

AStructural unemployment

BFrictional unemployment

CMigration unemployment

DCyclical unemployment

Correct Answer: D. Cyclical unemployment

Question 6

Which of the following best describes the effect of inflation.

AToo many people chasing too many goods

BToo few people chasing too few goods

CToo many people chasing too few goods

DToo few people chasing too many goods.

Correct Answer: A. Too many people chasing too many goods

Question 7

Which of the following best describes 'exchange rates'?

AThe value of one country??s currency measured against that of another

BThe amount of business transacted between one country and another

CThe extent of barter transactions in a particular economy

DThe speed with which a company receives payment for goods or services it has sold.

Correct Answer: B. The amount of business transacted between one country and another

Question 8

Which of the following headings would appear in the current account of a country's balance of payments?

ATransactions in goods and services

BTransactions in external assets and liabilities

CTransactions in large sums of money

DTransactions in stocks and shares.

Correct Answer: C. Transactions in large sums of money

Question 9

Which of the following best describes the concept of exchange rates?

AThe amount of business transacted between one country and another during a year

BThe speed with which a company receives payment for goods or services sold

CThe ability of a country to take advantage of currency differences

DThe value of one country's currency measured against that of another.

Correct Answer: D. The value of one country's currency measured against that of another.

Question 10

Which of the following best describes the term 'business cycle'?

AThe time that elapses between a buyer placing an order and the seller delivering the goods

BThe continuum of economic activity from extraction of raw materials to the sale of finished goods

CThe time that elapses between a user department recognizing the need for an item and purchasing placing the order

DThe need for all businesses in a free market economy to make a profit which allows the company to expand and grow.

Correct Answer: C. The time that elapses between a user department recognizing the need for an item and purchasing placing the order