Free Doctor of Business Administration Questions and Answers — Questions and Answers
Question 1: Which of the following increases the quantity of money?
- Raise Interest Rates (Correct answer)
- Lower Taxes
- Spend More
- Reduce Spending
Correct answer: Raise Interest Rates
Raising interest rates can attract foreign investors seeking higher returns on their capital. This influx of foreign investment leads to an increase in foreign currency entering the domestic economy. When this foreign currency is converted into the local currency and deposited in banks, it can contribute to an expansion of the overall money supply within the country.
Question 2: The __ policy modifies ___ and ___ levels to regulate the economy.
- Monetary, inflation, spending
- Monetary, taxation, spending
- Fiscal, inflation, taxation
- Fiscal, taxation, spending (Correct answer)
Correct answer: Fiscal, taxation, spending
Fiscal policy refers to the government's use of spending and taxation to influence the economy. By adjusting levels of government spending and taxation, the government can stimulate or slow down economic activity, manage inflation, and address unemployment. This directly contrasts with monetary policy, which primarily involves managing interest rates and the money supply.
Question 3: A market setup where a small number of enterprises produce the majority or the entire output.
- Monopolistic Competition
- Pure Monopoly
- Oligopoly (Correct answer)
- Perfect Competition
Correct answer: Oligopoly
An oligopoly is a market structure characterized by a small number of large firms that dominate the market. These firms are interdependent, meaning the actions of one firm significantly impact the others. This differs from a monopoly (one firm), monopolistic competition (many firms with differentiated products), and perfect competition (many firms with identical products).
Question 4: Demand for ____ increases as the price rises.
- Grows
- Falls (Correct answer)
- Saturates
- All of the above
Correct answer: Falls
According to the law of demand, for most goods and services, as the price of an item increases, the quantity demanded by consumers will decrease. This inverse relationship means that consumers typically buy less of a product when its price rises. Therefore, for most goods, demand 'Falls' as the price rises.
Question 5: A(n) decrease in supply results from a price rise.
- Both Lower and Increase
- Lower (Correct answer)
- Fall
- Increase
Correct answer: Lower
According to the law of supply, a decrease in the price of a good or service typically leads to a lower quantity supplied by producers. This is because a lower price makes production less profitable, discouraging firms from producing as much. Therefore, a 'Lower' quantity supplied results from a price fall.
Question 6: Which of the following constitutes a trade barrier? Exchange controls, import quotas, embargos, and customs laws.
- Non-Tariffs (Correct answer)
- Natural Barriers
- Word Trade Organization Barriers
- Tariffs
Correct answer: Non-Tariffs
Non-tariff barriers are restrictions on trade that do not involve a direct tax or duty. The examples provided—exchange controls, import quotas, embargos, and customs laws—all fall under this category as they restrict the volume or value of trade through means other than tariffs. Tariffs, in contrast, are direct taxes on imported goods.
Question 7: 117 nations agreeing to lower trade barriers.
- Uruguay Round (Correct answer)
- World Trade Organization
- European Union
- Embargo
Correct answer: Uruguay Round
The Uruguay Round was a multilateral trade negotiation under the General Agreement on Tariffs and Trade (GATT) that concluded in 1994. It involved 117 countries and significantly lowered trade barriers, leading to the creation of the World Trade Organization (WTO). This round was a landmark agreement for global trade liberalization.
Free Doctor of Business Administration Questions and Answers
Which of the following increases the quantity of money?