Economics CAE [5] 2024

What is a significant factor to consider when planning to buy a new vehicle?

• The color and design of the vehicle

• The brand reputation of the vehicle

• The insurance costs associated with the vehicle

• The number of seats in the vehicle

Answer explanation

The total cost of ownership, which includes the purchase price, insurance, maintenance, fuel costs, and depreciation.

Tags

(A) 6.A

(A) 21.B

When planning to open a new business, an important legal consideration is —

• employee benefits

• trademark registration

• marketing strategies

• building permits

Answer explanation

Zoning laws are regulations that dictate how real property can be used in certain geographic areas. They are used by municipalities to control and direct the development of property within their borders, according to present and potential uses of the property.

These laws can limit commercial or industrial use of land to prevent oil, manufacturing, or other types of businesses from building in residential neighborhoods.

They can also include restrictions on lot size, building height, architectural design, or the density of buildings in a certain area.

Tags

(A) 6.B

What is a common reason for cities to implement regulations on the maximum size of new residential constructions within their limits?

• To increase the overall density of the urban population

• To maintain the character and aesthetics of neighborhoods

• To encourage the use of sustainable and green building practices

• To promote the development of affordable housing options

Answer explanation

These types of regulations have been enacted in order to control urban sprawl, maintain the character and aesthetic of neighborhoods, manage resources, and prevent overcrowding.

Tags

(A) 6.B

Based on the information on the table, which economic condition is characteristic of all three nations?

• Low GDP per capita

• High levels of inflation

• Low inflationary levels

• High levels of unemployment

Tags

(A) 21.E

(A) 9.A

What economic condition is characterized by slow growth and a relatively high unemployment rate?

• Deflation

• Recovery

• Stagflation

• Boom

Answer explanation

High levels of unemployment combined with high levels of inflation could indicate that the business cycle has entered into a period of stagflation, which is a combination of stagnant economic growth and high inflation.

Tags

(A) 9.B

During a contraction phase in the business cycle, what is typically observed?

• increased consumer spending

• rising unemployment

• higher production levels

• decreased interest rates

Answer explanation

An expansionary period in the business cycle is distinguished by increased economic activity. This includes higher levels of output, employment, income, and sales. It's also often characterized by increased consumer confidence and spending, business investment, and inflation.

Tags

(A) 9.B

What factor is essential for enhancing a country's economic development?

• reducing inflation rates

• increasing government spending

• improving education and skills

• limiting exports

Answer explanation

Economic growth would most likely result from a combination of factors such as increased productivity, technological advancements, capital investment, favorable government policies, and an educated and skilled workforce.

Tags

(A) 10.A

What effect might a significant reduction in production costs have on a country's economy?

• decreased national debt

• slower economic development

• increased inflation

• accelerated economic growth

Answer explanation

If businesses can decrease the amount of labor needed to increase inventories, the result will most likely be an increase in efficiency and potentially higher profits. This is because less labor means lower labor costs, and if the same amount of inventory can be produced with less labor, the cost of producing each unit of inventory decreases. This could lead to higher profit margins if the savings are not passed on to consumers in the form of lower prices.

Tags

(A) 10.A

How does the integration of robotics in manufacturing processes affect the overall production time?

• It significantly reduces production time by automating tasks

• It increases production time due to frequent maintenance requirements

• There is no noticeable impact on production time

• It extends production time as robots are slower than human workers

Answer explanation

New manufacturing technologies typically affect economic growth by increasing productivity. This means that more goods can be produced in less time and with less effort. This increase in efficiency can lead to lower costs for businesses, which can then lead to lower prices for consumers. Additionally, new technologies can lead to the creation of new industries and jobs, further stimulating economic growth.

Tags

(A) 10.B

Which of the following entities is characterized by having a single owner who is responsible for all decisions and liabilities?

• Partnerships

• Sole Proprietorships

• Free Enterprise Systems

• Corporations

Answer explanation

A sole proprietorship is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits and has unlimited personal liability for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are their debts.

Tags

(A) 15.A

(A) 21.A