Economic environment

Question 1ExpertLevel 2

If foreign investment suddenly starts leaving what combined pressure can come on capital market and currency?

APressure on share prices and currencyBTax collection doublingCDemand always stableDGovernment expenditure zero

Question 2ExpertLevel 2

If a consumer goods company increases production only by looking at GDP growth what analytical mistake may occur?

AIt may ignore private consumption and income distributionBIt will completely remove costCIt will make market risk zeroDIt will change tax law

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Question 3ExpertLevel 2

If inflation is falling but the price level is still high how should it be understood?

AIt is deflation so prices have fallenBIt is disinflation prices are rising more slowlyCIt is legal end of demandDIt is a tax free economy

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Question 4ExpertLevel 2

If the government gives production linked incentives but market demand is uncertain what should be the best decision criterion for a company?

AExpansion only by seeing incentiveBStop tax paymentCDemand feasibility and net cost benefitDIgnore all competitors

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Question 5ExpertLevel 2

If government procurement policy gives preference to local content what effect can it have on foreign suppliers?

ACompetitive position in government contracts may weakenBEvery foreign supplier will get tax reliefCLocal industry will closeDDemand will have no relation

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Question 6ExpertLevel 2

If non performing assets rise in the banking system what economic constraint may new enterprises face?

AZero advertising costBStricter loan approvalCGuaranteed customer demandDCompulsory production subsidy

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Question 7ExpertLevel 2

If public debt becomes very high what may happen to future policy capacity of the government?

AGovernment borrowing need will endBFiscal flexibility may reduceCAll taxes will be permanently removedDPrivate investment will necessarily rise

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Question 8ExpertLevel 2

If foreign exchange reserves are falling and import dependence is high what plan should a company strengthen?

ACurrency risk and alternative supply planBOffice colour planCEmployee leave listDLogo font choice

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Question 9ExpertLevel 2

If tax compliance becomes digital what will be one opportunity and one challenge for small firms?

ARecord transparency and technical compliance costBAll taxes end and demand becomes zeroCLegal identity ends and cost becomes zeroDMarket closes and loans become free

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Question 10ExpertLevel 2

If consumer price inflation is higher than wage growth what pressure can emerge in the labour market?

AExport duty pressureBWage demand due to falling real wagesCZero office rentDMaking production free

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Question 11ExpertLevel 2

If government spending is focused on local projects but national demand is weak what should a construction company check?

AOnly national averageBEmployee personal expenseCProject based regional demandDTreat all projects as risk free

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Question 12ExpertLevel 2

If there is a K shaped recovery in the economy how will different companies be affected?

AAll companies will grow at same speedBDemand of low income group will be strongestCOnly government companies will surviveDSome sectors will recover fast and some will lag

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Question 13ExpertLevel 2

If the central bank raises the cash reserve ratio what effect will it have on credit flow from banks to businesses?

ALendable funds may decreaseBAll loans will be freeCCredit demand will always doubleDTax payment will stop

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Question 14ExpertLevel 2

If export incentives are available but non tariff barriers are rising in foreign markets what should a company do?

AIncrease exports only by seeing incentivesBAnalyse standards compliance and market entry costCStop quality checksDIgnore foreign customers

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Question 15ExpertLevel 2

If capacity utilisation is high and demand is also growing fast on what basis can new investment be justified?

AOnly by seeing fashionBOnly due to tax fearCEconomic need for additional capacityDBy hiding customer complaints

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Question 16ExpertLevel 2

If the government raises minimum support price what economic effect will a food processing company watch?

AChange in advertising colourBBank loan becoming zeroCOffice rent fallingDIncrease in cost of agricultural raw inputs

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Question 17ExpertLevel 2

If a large part of demand comes from government contracts what economic risk should a company especially watch?

ABudget cuts and payment delaysBCustomer income has no relationCAll taxes permanently zeroDEvery contract has infinite duration

Correct answer: A

The direct answer is option A: watch budget cuts and payment delays. Government contracts are connected with public budgets, approvals, procurement rules and administrative procedures. If government revenue or spending priorities change, planned orders may be reduced, postponed or cancelled. Even after delivery, payment may take longer because bills pass through formal verification and payment systems. Option A is correct because both reduced government budgets and delayed receipts can affect sales, cash flow and working capital. Option B is wrong: customer income may still matter, and it does not describe the main risk created by dependence on government contracts. Option C is unrealistic; taxes are not permanently zero. Option D is false because contracts have defined periods and renewal is not guaranteed. Exam cue: dependence on one major buyer creates concentration and payment-timing risk.

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Question 18ExpertLevel 2

If domestic currency strengthens and a company depends on exports what pricing challenge will increase?

APrice competitiveness for foreign customers may fallBImport cost will always riseCProduct quality will automatically riseDTax compliance will end

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Question 19ExpertLevel 2

If there is deflation in the economy why may companies postpone investment decisions?

ABecause future prices and demand may fallBBecause inflation rises very fastCBecause loans are always waivedDBecause production is legally stopped

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Question 20ExpertLevel 2

If economic reforms reduce entry barriers what strategic pressure will increase for existing firms?

ALegal compulsion to remove productsBFree availability of raw materialCPressure to improve customer service and efficiencyDComplete end of market demand

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Question 21ExpertLevel 2

If production cost is in local currency and sales are in foreign currency what may be the effect of currency depreciation?

ACompany will always loseBSales revenue in local currency may riseCAll costs will convert to foreign currencyDDemand will legally remain fixed

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Question 22ExpertLevel 2

If the government increases social security payments what effect is possible on demand from low income groups?

AOnly capital market will be affectedBConsumption demand may get supportCExports will automatically stopDInterest rate will be zero

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Question 23ExpertLevel 2

If a company analyses economic environment only from last year data what will be the main expert level weakness?

AHistorical data always tells the futureBCompany needs no strategyCCurrent leading indicators and policy changes may be missedDCost will have no effect

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Question 24ExpertLevel 2

When inflation is high but economic growth is slow, what difficult pricing decision may a business need to make?

Aलागत बढ़ने की भरपाई के लिए कीमतें बढ़ाते हुए मांग घटने के जोखिम का आकलन करना / लागत की भरपाई के लिए कीमतें बढ़ाते हुए मांग घटने के जोखिम का आकलन करनाBबिना बाजार विश्लेषण के उत्पादन दोगुना करनाCयह मान लेना कि ग्राहकों की आय में कोई बदलाव नहीं होगाDयह मान लेना कि लागत का व्यावसायिक निर्णयों पर कोई प्रभाव नहीं पड़ता

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Question 25ExpertLevel 2

If the central bank lowers interest rates but consumer confidence remains weak, why might consumer demand not rise immediately?

Aक्योंकि सस्ता ऋण मिलने से ही खर्च बढ़ना सुनिश्चित नहीं होताBक्योंकि ब्याज दर घटते ही सभी ऋण अवैध हो जाते हैंCक्योंकि ब्याज दर घटने पर कर हमेशा दोगुना हो जाता हैDक्योंकि ब्याज दर घटते ही उत्पादन बंद हो जाता है

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Quiz this set

If foreign investment suddenly starts leaving what combined pressure can come on capital market and currency?

If a consumer goods company increases production only by looking at GDP growth what analytical mistake may occur?

If inflation is falling but the price level is still high how should it be understood?

If the government gives production linked incentives but market demand is uncertain what should be the best decision criterion for a company?

If government procurement policy gives preference to local content what effect can it have on foreign suppliers?

If non performing assets rise in the banking system what economic constraint may new enterprises face?

If public debt becomes very high what may happen to future policy capacity of the government?

If foreign exchange reserves are falling and import dependence is high what plan should a company strengthen?

If tax compliance becomes digital what will be one opportunity and one challenge for small firms?

If consumer price inflation is higher than wage growth what pressure can emerge in the labour market?

If government spending is focused on local projects but national demand is weak what should a construction company check?

If there is a K shaped recovery in the economy how will different companies be affected?

If the central bank raises the cash reserve ratio what effect will it have on credit flow from banks to businesses?

If export incentives are available but non tariff barriers are rising in foreign markets what should a company do?

If capacity utilisation is high and demand is also growing fast on what basis can new investment be justified?

If the government raises minimum support price what economic effect will a food processing company watch?

If a large part of demand comes from government contracts what economic risk should a company especially watch?

If domestic currency strengthens and a company depends on exports what pricing challenge will increase?

If there is deflation in the economy why may companies postpone investment decisions?

If economic reforms reduce entry barriers what strategic pressure will increase for existing firms?

If production cost is in local currency and sales are in foreign currency what may be the effect of currency depreciation?

If the government increases social security payments what effect is possible on demand from low income groups?

If a company analyses economic environment only from last year data what will be the main expert level weakness?

When inflation is high but economic growth is slow, what difficult pricing decision may a business need to make?

If the central bank lowers interest rates but consumer confidence remains weak, why might consumer demand not rise immediately?

Quiz result

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Economic environment

Quiz this set

If inflation is falling but the price level is still high how should it be understood?यदि महंगाई घट रही है लेकिन कीमत स्तर अभी भी ऊंचा है तो इसे कैसे समझना चाहिए?

If there is deflation in the economy why may companies postpone investment decisions?यदि अर्थव्यवस्था में अपस्फीति हो तो कंपनियां निवेश निर्णय क्यों टाल सकती हैं?

Quiz result

Analytics choices

If inflation is falling but the price level is still high how should it be understood?

If there is deflation in the economy why may companies postpone investment decisions?