Mini Quiz For National Economics And Financial Management

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| By Nefmq2010
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Nefmq2010
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Quizzes Created: 2 | Total Attempts: 326
Questions: 10 | Attempts: 152

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Financial Management Quizzes & Trivia

This is Mini Quiz 2 for NEFMQ 2010.


Questions and Answers
  • 1. 

    1.       Specialisation and trade will increase total output available. Therefore, it is best for a person to specialise in the production of the good in which he has ___________.

    • A.

      More resources

    • B.

      Absolute advantage

    • C.

      Comparative advantage

    • D.

      Higher opportunity cost

    Correct Answer
    C. Comparative advantage
    Explanation
    Specialisation and trade increase total output because when individuals specialise in producing goods or services that they have a comparative advantage in, they can produce more efficiently. Comparative advantage refers to the ability to produce a good or service at a lower opportunity cost compared to others. By focusing on producing the goods or services they have a comparative advantage in, individuals can maximize their productivity and contribute to overall economic growth. Therefore, it is best for a person to specialise in the production of the good in which they have a comparative advantage.

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  • 2. 

    In price discrimination, who should be charged the lowest price?

    • A.

      The poorest

    • B.

      The group with a positive price elastic demand

    • C.

      The group with a negative inelastic demand

    • D.

      The group with a perfectly elastic demand

    Correct Answer
    D. The group with a perfectly elastic demand
    Explanation
    The group with a perfectly elastic demand should be charged the lowest price in price discrimination. This is because a perfectly elastic demand means that consumers are extremely sensitive to changes in price and will only purchase a product if it is offered at the lowest possible price. By charging this group the lowest price, the seller can maximize their sales and revenue from this segment of consumers.

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  • 3. 

    The table below shows the changing Certificate of Entitlement (COE)  premium for cars smaller than 1600cc in 2009.   Month Price March S$3864 June S$11690 October $16231 December $17615   Which reason is false about the cause of the changing price pattern?

    • A.

      Fall in supply of COE

    • B.

      Fall in income of consumers

    • C.

      Rising cost of public transport

    • D.

      None of the above

    Correct Answer
    B. Fall in income of consumers
    Explanation
    The changing price pattern of the Certificate of Entitlement (COE) premium for cars smaller than 1600cc in 2009 is not caused by a fall in income of consumers. This can be inferred from the fact that the prices of COE premium increased from March to December, indicating that consumers were still willing to pay higher prices for cars. Therefore, the false reason for the changing price pattern is the fall in income of consumers.

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  • 4. 

    The current account surplus(CA=Y-X>0) is equal to the sum of (Y=income, X=net import, T= tax, G= government expenditure, S=savings, I=investment) :

    • A.

      The government deficit (T-G0).

    • B.

      The government surplus (T-G>0) and the private surplus (S-I>0).

    • C.

      The government deficit (T-G

    • D.

      The government surplus (T-G>0) and the private deficit (S-I

    Correct Answer
    D. The government surplus (T-G>0) and the private deficit (S-I
    Explanation
    The current account surplus (CA=Y-X>0) is equal to the sum of the government surplus (T-G>0) and the private deficit (S-I). This means that when the government has a surplus and the private sector has a deficit, it contributes to an overall surplus in the current account. The government surplus indicates that the government is receiving more income through taxes than it is spending on government expenditures. The private deficit indicates that the private sector is spending more on investments than it is saving. Therefore, the combination of these two factors leads to a current account surplus.

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  • 5. 

    Other things being equal, the slope of the aggregate expenditures curve will increase as a result of:

    • A.

      A decline in the size of the inflationary gap.

    • B.

      A decline in the general price level.

    • C.

      An increase in the MPC.

    • D.

      An increase in the MPS.

    Correct Answer
    C. An increase in the MPC.
    Explanation
    An increase in the MPC (Marginal Propensity to Consume) means that individuals and households are more willing to spend a larger proportion of their income. This leads to an increase in aggregate expenditures, as more money is being spent on goods and services. As a result, the slope of the aggregate expenditures curve increases, indicating a steeper relationship between income and spending.

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  • 6. 

    Which of the followings is not one of the top 3 largest stock exchange markets in the world (by 2009)?

    • A.

      New York Stock Exchanges

    • B.

      NASDAQ

    • C.

      The London Stock Exchange

    • D.

      Toronto Stock Exchange

    Correct Answer
    D. Toronto Stock Exchange
    Explanation
    The question asks for the stock exchange market that is not one of the top 3 largest in the world by 2009. The answer, Toronto Stock Exchange, is correct because the top 3 largest stock exchange markets in the world by 2009 were New York Stock Exchange, NASDAQ, and the London Stock Exchange. Therefore, Toronto Stock Exchange does not belong to the top 3 largest stock exchange markets in the world by 2009.

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  • 7. 

    Which of the followings is not a protection against credit card fraud?

    • A.

      Never do online shopping by using credit card

    • B.

      Signing on the credit card

    • C.

      Check the bills regularly

    • D.

      Reporting to the issuer if the card lost or stolen

    Correct Answer
    A. Never do online shopping by using credit card
    Explanation
    The correct answer is "Never do online shopping by using credit card" because this statement suggests that not doing online shopping with a credit card is a protection against credit card fraud. However, this is not true as online shopping can be safe if proper security measures are taken, such as using secure websites, checking for SSL certificates, and not sharing credit card information with untrusted sources. The other options, such as signing on the credit card, checking bills regularly, and reporting a lost or stolen card to the issuer, are all valid protections against credit card fraud.

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  • 8. 

    Which of following is true about CPF?

    • A.

      It provides housing grant for Singaporean and Singapore PR.

    • B.

      The ordinary and special accounts can be used for investment.

    • C.

      It has two accounts: ordinary and special.

    • D.

      It can be used to repay the outstanding education loans.

    Correct Answer
    B. The ordinary and special accounts can be used for investment.
    Explanation
    The CPF (Central Provident Fund) has two accounts: the ordinary account and the special account. Both of these accounts can be used for investment purposes. This means that individuals can choose to invest their CPF savings in various investment instruments such as stocks, bonds, and mutual funds, in order to potentially earn higher returns on their savings. This option provides individuals with the opportunity to grow their CPF savings and achieve their financial goals.

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  • 9. 

    An agent is trying to gather information about his prospect, Mr Ong. Which of the following information should the agent determine? (i) Whether Mr Ong needs life insurance (ii) Whether he has any health conditions that could make him uninsurable (iii) Whether Mr Ong can afford to buy life insurance

    • A.

      (i) and (ii) only

    • B.

      (i) and (iii) only

    • C.

      (ii) and (iii) only

    • D.

      (i), (ii) and (iii)

    Correct Answer
    D. (i), (ii) and (iii)
    Explanation
    The agent should determine all three pieces of information in order to effectively assess Mr Ong's needs and eligibility for life insurance. Knowing whether Mr Ong needs life insurance, whether he has any health conditions that could make him uninsurable, and whether he can afford to buy life insurance are all crucial factors in determining the best course of action for the agent. By gathering this information, the agent can tailor their approach and recommendations to Mr Ong's specific circumstances and ensure that they provide him with the most suitable options.

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  • 10. 

    Which of the following should you not consider before investing?

    • A.

      My investment objective

    • B.

      My desired rate of return

    • C.

      Historical performance of investment I am considering

    • D.

      My risk appetite

    Correct Answer
    C. Historical performance of investment I am considering
    Explanation
    Before investing, it is important to consider various factors such as investment objective, desired rate of return, and risk appetite. These factors help in determining the suitability of an investment option for an individual. However, historical performance of a specific investment should not be the sole consideration for making an investment decision. Past performance does not guarantee future results, and it is crucial to analyze other factors such as current market conditions, economic outlook, and the overall risk-reward profile of the investment. Therefore, historical performance should not be the only factor to consider before investing.

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