CWA ICWA Exam Papers Foundation Economics and Business Fundamentals Dec 2011

CWA ICWA Exam Papers  Foundation

Economics and Business Fundamentals Dec 2011


This Paper has 66 answerable questions with 0 answered.

Syllabus 2008
Time Allowed : 3 Hours Full Marks : 100
The figures in the margin on the right side indicate full marks.
SECTION I (60 Marks)
Answer Question No.1 which is compulsory and any two from the rest.
1. (a) Answer the following : 1×9=9
(i) Effective demand is
(a) Demand exceeds supply
(b) Aggregate demand is equal to aggregate supply
(c) Elasticity of demand for a product is high
(d) Difference between actual and forecast demand
(ii) Progressive taxation means
(a) Tax burden decreases with income
(b) Tax burden increases with income
(c) Large quantity of tax evasion
(d) Large quantity of tax avoidance
(iii) Cross elasticity of demand relates
(a) Price of one commodity and demand for another commodity
(b) substitutes and complementary goods
(c) Market and supply
(d) Production and cost
(iv) Average variable cost is
(a) L shaped
(b) U shaped
(c) Dish shaped
(d) Horizontal straight line
(v) Central Problem of all Economies are
(a) What to produce?
(b) How to produce?
(c) For whom to produce?
(d) All the above
(vi) Exceptions to the law of demand are
(a) Conspicuous goods
(b) Giffen goods
(c) Shares’ speculative market
(d) All the above
(vii) Labour is a
(a) Vital factor
(b) Non–essential factor
(c) Permanent factor
(d) Perishable factor
(viii) In inflation
(a) Producers loose
(b) Creditors gain
(c) Fixed income earners gain
(d) Borrowers gain
(ix) Marginal Revenue is calculated as
(b) Fill in the blanks : 1×12=12
(i) The goal of all firms in perfect competition is ________________ maximisation. (0)
(ii) ______________ helps on economy to earn income from world market. (0)
(iii) While _________________ tax is one whose burden cannot be shifted, incase ___________ tax, the burden is shifted. (0)
(iv) Pricing to products is one of the problems of estimating ____________________. (0)
(v) According to Malthus production of foodgrains increases at an arithmetical____________. (0)
(vi) Fisher’s quantity theory of money is also called cash transaction __________________. (0)
(vii) Deflation is an economic ___________________. (0)
(viii) The level of Planned Investment is ____________ related to Interest rate. (0)
(ix) The growth rate of GDP at constant price is called _____________ national income. (0)
(x) Time utility of making a product available at the ______________ when it is required. (0)
(xi) Disequilibrium in Balance of payments means deficit in _____________ account. (0)
(xii) During inflation Bank rate should be _________________. (0)
(c) State which of the following statements is ‘True’ and which is ‘False’: 1×9=9
(i) Whether savings a virtue or a vice depends upon its use and its effects on income. (0)
(ii) In public finance, the government cuts its coat according to its cloth. (0)
(iii) One of the limitations of credit creation is the size of the cash reserve ratio. (0)
(iv) Industrial Finance Corporation of India is a Development Bank. (0)
(v) Balance of payments is wider than Balance of Trade. (0)
(vi) The easiest way to tide over deficit in budget is to print more currency. (0)
(vii) Group equilibrium is a concept relevant to perfect competition. (0)
(viii) Adding value of all goods and services produced to arrive at national income of a country is called income method. (0)
(ix) Ratio of consumption to income is called marginal propensity to consumer. (0)
(d) Define the following terms in not more than two lines: 1×6=6
(i) Cannon of Economy (0)
(ii) Indirect tax (0)
(iii) Repressed inflation (0)
(iv) Taxable capacity (0)
(v) Credit creation (0)
(vi) Bank rate (0)
2. Define inflation. Discuss the causes of inflation. 2+10=12 (0)
3. Discuss merits and demerits of direct taxes. 12 (0)
4. Critically examine Ricardo’s theory of comparative cost. 12 (0)
SECTION II (40 Marks)
Answer Question No.5 which is compulsory and any two from the rest.
5. (a) Answer the following : 1×6=6
(i) A bull is
(a) A Speculator who expects price to fall
(b) A Speculator who expects price to rise
(c) A Speculator who invests in mutual fund
(d) A Speculator who invests in government bonds
(ii) One share one vote is applicable to
(a) Joint stock company
(b) Co–operative society
(c) Partnership firm
(d) Joint Hindu family
(iii) Liability clause is contained in
(a) Articles of Association
(b) Prospectus
(c) Memorandum of Association
(d) Special Resolution
(iv) listing in stock exchange is
(a) Mandatory
(b) Optional
(c) Desirable
(d) Publishing the details
(v) The SWOT analysis stands for
(a) Strength, Weaknesses, Opportunities, Threats
(b) Science, Wisdom, Opportunities, Triumph
(c) Success, Wisdom, Opportunities, Truth
(d) Simple, Weaknesses, Opportunities, Threats
(vi) Which of the following is not an advantage of verbal communication?
(a) Easily understandable
(b) Less expensive and quicker
(c) Removes distances and barriers in communication
(d) Difficult to act on it due to missing details
(b) Fill in the blanks : 1×6=6
(i) The prescribed minimum number of qualified persons authorised to transact the business at meeting is called _________________. (0)
(ii) A stock market deals in ________________ securities. (0)
(iii) A person who just lends his name and reputation for the benefit of the firm without taking active part is called ______________. (0)
(iv) ______________ involves sending written message through telecommunication links. (0)
(v) Acceptance of objectives after the superiors and subordinates sitting together is called _____________ (0)
(vi) When the liability of a person covers both business and personal property, it is called _____________ liability. (0)
(c) State whether the following are ‘True’ and which are ‘False’ 1×6=6
(i) Economic Systems and Economic Policies are studied under Economic Environment. (0)
(ii) Stock Exchange facilitate regular valuation of securities. (0)
(iii) For communication to be effective it must be receiver oriented. (0)
(iv) Registered partnership enjoys perpetual existence. (0)
(v) Decoding refers to delivery of communication. (0)
(vi) Social responsibility is an indication of business ethics. (0)
(d) Define the following terms in not more than two lines: 1×6=6
(i) Unlimited liability (0)
(ii) Special resolution (0)
(iii) Called up capital (0)
(iv) Partner by estoppel (0)
(v) Statement of lieu of prospectus (0)
(vi) Forward delivery contract (0)
6. Discuss the functions of Stock Exchange and explain the method of trading in Stock Exchange. 4+4=8 (0)
7. Explain the steps involved in the incorporation of a Joint Stock Company. 8 (0)
8. Describe the essential elements in the process of an effective communication system. 8

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