Financial Controller (2:30-4:00, 4:30-6:00)

Name:
____________________________________
Section: BSABA41E1-FM2
Mid-Term Exam

August 22, 2015

Permit No. __________________

True or False: (Write T if True and F if false)

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Macroeconomics is the study of national economy and the determination of

national income.
Gross Domestic Product (GDP) pertains to the price of all goods and services produced
by labor and property supplied by the nations residents.
Equilibrium GDP occurs when the output level of the economy creates just enough
spending to purchase the entire input.
Intermediate inputs is another name for all the long-lived physical equipment, software
and structures a businesses uses in its production process.
A transaction cycle is a fluctuation in aggregate economic output that lasts for several
years.
Short-term profit maximization focuses on achieving the highest profit, assuming that
variable costs are constant and cannot be changed.
The peak is the date on which a recession ends that is, when the economy hits a high
points and starts heading downward.
Monetary policy refers to decisions about government spending, taxes and debt in both the
short run and long run.
One of the main golas of monetary policies is controlling deflation.
Cost-push inflation occurs from a decrease in the cost of producing goods and services.

Family income is a widely used as a yardstick of economic well-being and inequality

prevailing in society.
Legal barriers are the oldest and considered most effective method of protecting a
business firm from potential competitors.
Disinvestment is a process in which the PSE reduces its portion in equity by disposing
its shareholdings.
Secondary markets are the markets in which corporations raise capital by issuing new
securities.
Private markets are markets in which standardized contracts are traded on organized
exchanges.
Stock markets are said to reflect the health of the countrys stability.
The rate of stock depends on the simple law of diminishing return. (law of demand and
supply)
Stock market is known as barometer of the companys economy.
The companies listed on stock exchanges collectively contribute to the countrys GNP.
(GDP)
Money market are securities with a maturity of less than 1 year.
One of the major consequences of international rade between nations is the possibility
for total world output to increase.
Exchange rates are determined by supply and demand in the foreign currency market.
Discount rate is the rate of interest that is used to find future values. (present values).
The process of determining the present value of a future amount is called annuity.
(discounting)annuity
Past due is one which payments or receipts occur at the beginning of each period.
(Annuity due)

Multiple Choice: (Write the letter only)

Which of the following does cause a shift in aggregate demand?
a. prices
b. imports
c. consumption
d. investment
__________ 2. A decrease in the labor force participation rate will
a. make it easier to reduce the rate of unemployment
b. increase government spending
c. have no impact on the rate of unemployment
d. decrease government spending
__________ 1.

What cause the production possibilities curve to shift outward?

a. Improving manufacturing efficiency for computers
b. Rehiring workers in the computer or car industry
c. Reopening computer plans
d. Using machinery for making computers instead of making cars
4. Compare with firms in a perfectly competitive market, a monopolist tends to
a. produce substantially less and charge a lower price
b. produce substantially less but charge a higher price
c. produce substantially more and charge a lower price
d. produce substantially more and charge a higher price
5. The large capital outlay necessary for the equipment is an example of a(n)
a. entry barrier.
b. minimum efficiency scale.
c. create barrier.
d. production possibility boundary.

__________ 3.

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1
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Which of the following most closely approximates our definition of oligopoly?

a. the barber shops in a city
b. the cigarette industry
c. the gasoline stations in a city
d. wheat farmers in the Midwest
A capital market does not include which of the following securities?
a. Common stock
b. Government bonds
c. Commercial paper
d. Preferred stock
Future financial managers will need to understand
a. International cash flows
b. Computerized funds transfers.
c. International currency hedging strategies.
d. All of the given choices.
A corporate restructuring can result in
a. changes in the capital structure.
b. selling of low-profit margin divisions
c. reductions in the work force.
d. All of the given choices.
One of the major consequences of international trade between nations is
a. the possibility for total world output to increase.
b. higher prices for consumers.
c. a decreased variety of cosnumer products.
d. reduced competition for business

Matching Type: ( Write the letter only )

a. restructuring
b. capital market
c. money market
K. real capital
e. inflation
d. spot rate

f. primary market
g. secondary market
h. disinflation
i. financial capital
j. mutual funds
l. forward rate

1. Redeploying the asset and liability structure of the firm

2. A market where the securities being traded are new public offerings.
_______ 3. Market composed of common stock, preferred stock, commerical and government bonds
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and other long-term securities.
4. This market trades previiously issued securiities
5. Securities with a maturity of less than 1 year
6. A leveling off or slowing down of price increases.
7. It refers to the exchange rate of a currency at which the currency is traded for immediate
delivery.
8. This form of capital is found on the balance sheet under long-term liabilities and equity.
9. The purchasing power of the peso shrinks over time.
1 Organizations that pool investor funds to purchase financial.
0.