1. The diagrams show four occupations.

Which occupation would be classified as an aid to trade?

2. Why do so many people set up small retail businesses?

A. A small amount of money is needed to start trading.

B. Banks will lend to retailers without security

C. It is easy for retailers to make large profits.

D. Many people are trained in shop management.

3. How do retailers assist wholesalers?

A. giving information on new goods available

B. offering advice on the use of goods

C. paying in advance

D. providing information on goods demanded

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4. What is the function of customs authorities?

A. to collect statistical information on imports and exports

B. to ensure efficient handling of imports and exports

C. to maintain airports

D. to provide storage for dutiable imported foods

5. What is a free port?

A. a port allowing goods to be imported without payment of duties

B. a port allowing goods to be transported without any freight charges

C. a port that offers free travel for exported and importers

D. a port where all loading and unloading of goods is free of charge

6. How can a country increase its exports?

A. enforce quotas

B. introduce embargoes

C. increase import duties

D. remove export duties

7. Amex Corporation is a large manufacturing company with two modern factories. Both its

cash flow and demand for its goods are very low, so immediate finance is needed.

Which source of finance would be the most suitable for the Amex Corporation?

A. hire purchase

B. sale and leaseback

C. shares

D. trade credit

8. A trader has the following results:

Sales $800 000

Cost of sales $650 000

Expenses $90 000

What is net profit?

A. $60,000 B. $150,000 C. $540, 000 D. $710,000

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9. What is meant by credit?

A. buying now, paying later

B. buying now, paying less

C. paying later, paying less

D. paying now, having later

10. What is the purpose of consumer protection?

A. assisting customers in the choice of goods

B. giving information on prices

C. preventing the exploitation of customers

D. protecting the interests of the seller

11. A government wants all farmers to be instructed about the use of a dangerous weed killer.

What will the manufacturers be required to do by law?

A. attach a warning label to the container

B. demonstrate the use of the weed killer to the farmers

C. persuade farmers to use an alternative product

D. place an advertisement in the national media

12. The table shows the foreign trade figures of country X for one year.

$ million

goods brought from other countries 500

goods sold to other countries 420

Payment for use of foreign transport 60

Money received from foreigners who use country X’s transport

95

money spent by citizens of country X on holidays in other countries

60

What is the value of country X’s total imports?

A. $60 million B. $500 million C. $560 million D.

$620 million

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13. Why might a manufacturer prefer to sell goods in the home country rather than abroad?

A. Insuring against the risks of exporting is impossible

B. Payment is guaranteed.

C. Setting up an overseas office requires very little expense.

D. Transport costs are lower.

14. What factors are likely to be important when a supermarket chain is deciding on the

location of a large retail branch?

nearness to population

centre

access to good road network

nearness to suppliers

space nearby to build a car

park

A

B

C

D

15. Which person is most likely to be employed in the public sector of a country?

A. a nurse

B. a retailer

C. a storekeeper

D. a taxi driver

16. An insured van is written off in an accident.

According to the principle of indemnity the insurer pays compensation and

A. gives the scrap value of the van to the policy-holder.

B. pays profits to the policy-holder.

C. purchases a new van for the policy holder.

D. takes possession of the damaged van.

17. If a trader wishes to insure his stock, from whom would he seek advice?

A. an actuary

B. an assessor

C. a broker

D. an underwriter

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Key

important

not important

18. The diagram shows the value of exports and imports for a country during the period 1999 to

2004.

19. Why do supermarkets need warehouses?

A. to avoid paying customs duties

B. to increase profits

C. to prevent shortages arising from a high rate of turnover

D. to reduce high advertising costs

20. Which statement is true of a bonded warehouse?

A. Goods can be manufactured while they are in bonded warehouse.

B. Imported goods are stored in the bonded warehouse until their duty is paid.

C. Imported goods on which duty has been paid are stored in the bonded warehouse.

D. Seasonal goods are stored in the bonded warehouse until they are demanded.

21. Which risk shown is non-insurable

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22. Why would Mr. and Mrs. Lee be unable to insure a house owned by a neighbor?

A. A proposal form has not been completed.

B. The house is too expensive.

C. The risk cannot be assessed.

D. They have no insurable interest in the house

23. In which situation would the bank giro credit system be most appropriate?

A. buying clothes from a shop

B. instructing a bank to pay monthly bills

C. paying staff wages

D. withdrawing money from a bank

24. How does a computer assist communication and trade in the global economy?

A. It allows a communication network to be established within a multinational

company.

B. It enables rapid communication between traders using email.

C. It encourages trade between buyers and sellers in the same country.

D. It provides a means of delivering goods to many parts of the world.

25. The diagram shows a method of communication

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Which method of communciation is it?

A. email

B. fax

C. intercom

D. telephone

26. A parcel is sent by ordinary post.

On what is the charge based?

A. bulk

B. shape

C. value

D. weight

27. On which of the following goods is the retailer likely to place the lowest percentage mark-

up?

A. a box of chocolates

B. a gold necklace

C. a packet of rice

D. a pair of shoes

28. Which document does a business complete when it puts money into its bank account?

A. cheque

B. credit note

C. paying-in slip

D. remittance advice

29. Which is the correct sequence of documents in a business transaction?

A. enquiry, quotation, order, invoice, statement

B. invoice, order, enquiry, statement, quotation

C. order, enquiry, quotation, statement, invoice

D. quotation, enquiry, order, invoice, statement

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30. Which agent advises companies on the best means of moving their goods?

A. broker

B. del credere agent

C. factor

D. freight forwarder

31. The diagram shows part of a bank statement

What is the balance on 18 September?

A. $275 B. $1475 C. $1875 D. $2275

32. A wholesaler is most likely to be used whenA. A retailer operates on a small scale.B. goods are fragileC. goods are large and expensiveD. large orders are made by retailers

33. What will a retailer expect when purchasing from a cash-and-carry wholesaler?A. cash discount, if a debt is paid within 28 daysB. long-term credit

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C. no credit and no delivery of goodsD. prompt delivery of goods

34. Meercat Office Supplies has received a delivery form a manufacturer of 1000 ink jet

cartridges at $9 each. The invoice shows an amount payable of $9000 subject to the

following terms of payment.

If Meercat settles the account within 7 days, how much will the company pay the

manufacturer?

A. $6840 B. $7200 C. $7560 D. $8550

35. What advantage do vending machines have compared with retail shops?

A. They deal with consumers’ complaints.

B. They make greater savings on space.

C. They offer a wider range of goods.

D. They sell goods at a lower price.

36. What name describes people involved in the distribution of raw materials and finished

goods?

A. commercial workers

B. direct service providers

C. manufacturing workers

D. primary producers

37. What is the purpose of trade?

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20% trade discount

5% cash discount (7days)

A. to buy and sell goods and services for profit

B. to convert new materials into finished goods

C. to distribute surplus goods from producer to consumer

D. to provided goods to satisfy human wants

38. What is an advantage of specialization?

A. It enables grater use of equipment

B. It increases the cost of production

C. The workers become self-sufficient

D. Workers find their jobs more interesting

39. The diagram shows a shop receipt

What kind of terminal would this receipt?

A. automatic teller machine (ATM)

B. digital billboard

C. electronic point of sale (EPOS)

D. point of sale

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40. The diagram shows the expenses involved in making and selling a pair of jeans.

How much value is added to the two meters of cloth at the secondary stage of production?

A. $5 B. $6 C. $9 D.

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