Exam (elaborations)

BEC CPA Exam Review UPDATED Exam Questions and CORRECT Answers

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BEC CPA

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Uploaded on August 4, 2024
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Type Exam (elaborations)
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Institution BEC CPA
Course BEC CPA

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BEC CPA Exam Review UPDATED Exam
Questions and CORRECT Answers

Demand Curve Shift Upward (direct relationship-positive shift) - CORRECT ANSWER- 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 ANSWER-
The price of complement good, income for inferior goods, and consumer boycotts

SWOT analysis - CORRECT ANSWER- strengths, weaknesses, opportunities, threats

Three common measures of price inflation: - CORRECT ANSWER- 1. The Consumer Price
Index (CP)
2. The Producer Price Index (PPI)
3. The GDP Deflator

Okun's law - CORRECT ANSWER- Provides a general rule of thumb showing how
economic growth rates faster than average often result in reductions in unemployment

Product differentiation strategies - CORRECT ANSWER- seek to make the demand for a
firm's products more inelastic.

Transfer pricing - CORRECT ANSWER- 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 ANSWER- there frictional and structural
unemployment, but not cyclical unemployment.

The consumer price index (CPI) - CORRECT ANSWER- 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 ANSWER- expansion, peak, contraction
(ie, recession), and trough.

Peaks are - CORRECT ANSWER- 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 ANSWER- the
bidding up of wages and prices, leading to an acceleration of inflation.

A change in account balances will always be measured as - CORRECT ANSWER- (the
current balance - the prior balance), with a positive result indicating an increase and a
negative result a decrease.

% changes for account balances = - CORRECT ANSWER- (Current balance - prior balance)
/ prior balance.

Transportation costs would exist - CORRECT ANSWER- even in the absence of government.

There are three common measures of price inflation: - CORRECT ANSWER- consumer price
index, producer price index and GDP deflator.

Deflation - CORRECT ANSWER- a decrease in the general level of prices and inflation rate
is below zero

Collusive pricing - CORRECT ANSWER- 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 ANSWER- a minimum price for a good or service

price ceiling - CORRECT ANSWER- a maximum price that can be legally charged for a
good or service

, Structural unemployment - CORRECT ANSWER- 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 ANSWER- hurt U.S. importers
and benefit U.S. exporters, while making foreign goods more expensive for U.S. consumers.

Stagflation is defined as - CORRECT ANSWER- simultaneous unemployment and inflation

Quantitative easing - CORRECT ANSWER- involves the Fed buying securities to add
liquidity to the economy, when short-term interest rates are already close to zero.

Globalization - CORRECT ANSWER- 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 ANSWER- the other
country must have disobeyed a WTO panel that told it to correct a problem.

Theory of Derived Demand - CORRECT ANSWER- the value of goods of higher order is
derived from that of the corresponding goods of lower order

GDP = - CORRECT ANSWER- Consumption by households + Investment + Government
spending + Net exports

Opportunity cost is defined as - CORRECT ANSWER- the best alternative use or benefit
foregone as the result of a business decision.

Dumping is the practice of - CORRECT ANSWER- selling product below its production
costs, generally, in an effort to reduce competition.

Selling foreign reserves causes - CORRECT ANSWER- one's currency to appreciate, which
is the opposite of what a country with a trade surplus needs if it wants to maintain exchange
rate stability.

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Exam (elaborations)

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