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BEC CPA Exam Review – Questions With Answers
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BEC CPA Exam Review – Questions With AnswersDemand Curve Shift Upward (direct relationship-positive shift) Correct
Ans - The price of subsitute goods, expectations of price changes,
income for normal goods, and extent of market
Demand Curve Shift Downward (inverse relationship-neg. shift)
Correct Ans - The price of complement good, income for inferior goods,
and consumer boycotts
SWOT analysis Correct Ans - strengths, weaknesses, opportunities,
threats
Three common measures of price inflation: Correct Ans - 1. The
Consumer Price Index (CP)
2. The Producer Price Index (PPI)
3. The GDP Deflator
Okun's law Correct Ans - Provides a general rule of thumb showing
how economic growth rates faster than average often result in reductions
in unemployment
Product differentiation strategies Correct Ans - seek to make the
demand for a firm's products more inelastic.
Transfer pricing Correct Ans - is the process for setting prices that
are charged for the transfer of goods or services between related parties
such as departments of a large entity.
Full employment implies that Correct Ans - there frictional and
structural unemployment, but not cyclical unemployment.
The consumer price index (CPI) Correct Ans - is a common
measure of inflation. It compares the price of goods and services in a base
year to the price of the same goods and services at a later year. The CPI is
commonly used to convert figures not readily comparable across years into
figures that are more comparable.
,The phases of the business cycle are Correct Ans - expansion, peak,
contraction (ie, recession), and trough.
Peaks are Correct Ans - usually characterized by a lack of available
labor and capital, which results in a deceleration of growth. Output is at
maximum and unemployment is as low as possible—or at the "natural"
rate.
Tight labor markets and lack of excess capacity often result in Correct
Ans - the bidding up of wages and prices, leading to an acceleration of
inflation.
A change in account balances will always be measured as Correct Ans -
(the current balance - the prior balance), with a positive result indicating
an increase and a negative result a decrease.
% changes for account balances = Correct Ans - (Current balance -
prior balance) / prior balance.
Transportation costs would exist Correct Ans - even in the absence
of government.
There are three common measures of price inflation: Correct Ans -
consumer price index, producer price index and GDP deflator.
Deflation Correct Ans - a decrease in the general level of prices and
inflation rate is below zero
Collusive pricing Correct Ans - results when competing suppliers
agree that they will not compete on the basis of price, setting a uniform
price to be charged by all suppliers (conspire). This enables the suppliers
to establish higher than market prices.
Price floor Correct Ans - a minimum price for a good or service
price ceiling Correct Ans - a maximum price that can be legally
charged for a good or service
, Structural unemployment Correct Ans - represents a mismatch
between the skills of workers and the needs of the labor market. This
usually occurs due to technological advances that change or eliminate the
need for the specific skills many workers possess.
A significant decline in the U.S. dollar tends to Correct Ans - hurt
U.S. importers and benefit U.S. exporters, while making foreign goods more
expensive for U.S. consumers.
Stagflation is defined as Correct Ans - simultaneous unemployment
and inflation
Quantitative easing Correct Ans - involves the Fed buying securities
to add liquidity to the economy, when short-term interest rates are already
close to zero.
Globalization Correct Ans - has been ongoing for many decades. It
has many aspects, including more savers having more internationally
diversified portfolios (i.e., reduced home bias), more firms operating
internationally, and increased international trade occurring within
companies.
Impose countervailing duties legally under WTO rules: Correct Ans -
the other country must have disobeyed a WTO panel that told it to correct a
problem.
Theory of Derived Demand Correct Ans - the value of goods of
higher order is derived from that of the corresponding goods of lower
order
GDP = Correct Ans - Consumption by households + Investment +
Government spending + Net exports
Opportunity cost is defined as Correct Ans - the best alternative
use or benefit foregone as the result of a business decision.
Dumping is the practice of Correct Ans - selling product below its
production costs, generally, in an effort to reduce competition.
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