BA1 CIMA Fundamentals of Business Economics Free Practice Exam Questions (2025 Updated)
Prepare effectively for your CIMA BA1 Fundamentals of Business Economics certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.
As the process of globalization increases, typical businesses will
All of the following are early indicators of a recovery from a recession except which one?
A government might increase its budget deficit in order to reduce
All of the following could cause the onset of a recession except which one?
All of the following are functions of central banks except which one?
What is described by the following definition 'the total accumulated amount the state owes to lenders in its own country and internationally'?
A government can finance a budget deficit by:
i. increasing taxation rates.
ii. Reducing government expenditure.
iii. Selling long term government bonds.
iv. Issuing Treasury Bills.
v. Raising interest rates.
vi. Reducing transfer payments.
Which of the following are not classed as a non-bank financial intermediary?
A financial intermediary takes the small deposits of millions of savers and uses them to buy an issue of government (treasury) bills and bonds.
Identify from the list below the principle this illustrates:
Which of the following might be regarded as benefits of the single currency, the Euro?
(i). Greater freedom for member countries to set their own interest rates
(ii). It is easier to compare prices of consumer goods in all countries using the Euro
(iii). A reduction in transactions costs for trade between countries using the Euro
(iv). Increased economic growth resulting from a more efficient common market
Other things remaining equal, which one of the following is likely to increase as a result of the sale by the central bank of a large quantity of government bonds?
Financial intermediation is the process by which
Real GDP per capita in an economy is directly affected by
(i). The quantity of resources located in the economy
(ii). How efficiently the economy uses resources when producing goods and services
(iii). The size of the working population
(iv). The flow of investment income from abroad
All other things remaining equal, which of the following would encourage a speculative short-term capital flow into a country's currency?
Which of the following is most likely to lead to a rise in the exchange rate of country's currency and a fall in the price of stocks shares?
A country's currency depreciates (falls) on the foreign exchange market. All of the following would be the effects of this on businesses within the country except which one?
Which of the following is NOT a suitable way for a manufacturing company to finance buying assets?
Which of the following are known as automatic stabilizers because they tend to reduce the fluctuations in economic activity associated with the business cycle?
(i). Progressive income taxes
(ii). Unemployment benefits
(iii). Means-tested welfare benefits
(iv). Regressive taxation
Which of the following describes a 'spot rate' in foreign currency dealing?
A good has a price elasticity of supply of 0.8. Which of the following best describes the effects of a rise in demand for this good?
1. More will be spent on the good
2. More of the good will be made and sold
3. Producer incomes will rise
4. Price rises more than proportionately to the rise in quantity produced
