30046-Uganda-Professional-ICPAU-CPA-ECONOMICS-Assessment-Exam-Premium Welcome to your 30046-Uganda-Professional-ICPAU-CPA-ECONOMICS-Assessment-Exam-Premium Standard Gateway LTD SG Exam ID: 30046-Uganda-Professional-ICPAU-CPA-ECONOMICS-Assessment-Exam-Premium CAT-U Economics INSTRUCTIONS AND NOTES: This assessment exam was prepared with a collaboration of Standard Gateway, an education and technology focused organization and operator of www.nationalexamination.com, operator of kezastore.com and their partners. The exam shall assess examinee preparedness in a computer-based format. Although we make an effort to ensure correctness, this exam is "use as is", Standard Gateway LTD - Education and Technology, disclaims any liability, it is still the responsibility of the user to make final determination on usability and applicability. Time Allowed: 2 hours 15 minutes (15 minutes reading and 2 hours writing, this is advised self-timed timing). Our Assessment Exams typically have between 24 and 36 questions in a computer-based format, Answer all questions for all sections Read Questions Before your answer Show all your workings on your side notebook, where applicable, to mimic actual exam experience before you answer the computer-based exam We ask that students do not copy, redistribute without appropriate written approval by Standard Gateway staff, in ensuring the exam is beneficial to other examinees Good luck!! An increase in government scholarships for college students mayencourage more high school graduates to go to collegeraise the tuition of private collegesincrease the demand for college professorsnone of the answers is correct Good X and good Y are substitutes. If the price of good Y increases, then the priceof X is likely going toincreasedecreasestay the samedecrease with small change Kasiimwe’s demand curve for food is Q = 10 − 2P. Her price elasticity of 2 demand for food at price P* equals. How much is P*?P* = 2P* = 4P* = 3P* = 6 If the demand for a product is elastic, the coefficient of elasticity isless than oneequal to onegreater than onezero Which of the following might cause the demand curve for an inferior good to shift to the left?a decrease in incomean increase in the price of a substitutean increase in the price of a complementNone of the answers is correct For which of the following goods is the income elasticity of demand likely highest?waterdiamondshamburgershousing Firms in which of the following markets tend to spend the most on advertising?Perfectly competitive marketsMonopolistically competitive marketsOligopoly marketsMonopoly markets The following question refers to the table below, which shows the maximum number of goods X and Y that producers A and B can produce in one day. Teabag (X) Coffee bag (Y) Producer A (Rwanda) 5 10 Producer B (Uganda) 20 20 Which is the best calculation of the Opportunity cost? in Rwanda, Opportunity cost of 1 cloth = 1 wine and Opportunity cost of 1 wine = 1 clothin Uganda, Opportunity cost of 1 cloth = 2 wine and Opportunity cost of 1 wine = ½ clothin Rwanda, Opportunity cost of 1 cloth = 2 wine and Opportunity cost of 1 wine = ½ clothNo producer has well calculated opportunity cost 1 out of 4 The following question refers to the table below, which shows the maximum number of goods X and Y that producers A and B can produce in one day. Teabag (X) Coffee bag (Y) Producer A (Rwanda) 5 10 Producer B (Uganda) 20 20 Which of the following statements is true? Producer A has the comparative advantage in producing X.Producer A has the comparative advantage in producing Y.Producer A has the absolute advantage in producing X and Y.No producer has the comparative advantage in producing either X or Y. Which of the following is not one of the components of aggregate demand?Consumption spending.Investment spending.Government purchases of goods and services.Money supply+ Money supply+Net exports. Which of the following is not an example of monetary policy?Purchasing of government bonds in an open market operation.A change in required reserve regulations.A change in the discount rate.An increase in the earned income tax credit. If the reserve ratio is 25 percent, the money multiplier is2458 Negative net exports means thatthe country sells more goods abroad than it buys from other countries.The country buys more goods from other countries than it sells to other countries.the country has a closed economy.the country’s tariffs are too low. Suppose that aggregate consumption is MILLION UGX1,000,000, aggregate investment is MILLION UGX200,000, government spending is MILLION UGX300,000, the value of exports is MILLION UGX100,000, and the value of imports is MILLION UGX200,000. What is the value of Gross Domestic Product (GDP)?MILLION UGX1,800,000MILLION UGX1,500,000MILLION UGX1,400,000MILLION UGX1,700,000 The quantity equation relates a measure of the money supply (M), to the velocity of money (V), the GDP deflator (P) and real GDP (Y). Which of the following expression accurately describes the quantity equation?MY = PVMP = VYMV = PYM/P = V/Y The following statement show very weak functions of taxation.To finance Public Sector workers only.To achieve economic objectives: reducing inflation, favorable balance of payments.To redistribute the national wealth through transfer payments/social welfare payments.To achieve social objectives e.g. discourage smoking, drinking / decrease pollution/damage to environment. 2 out of 4 Which in the following statement describe the correct answersTax evasion is the legal payment or under-payment of taxesTax avoidance is the illegal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the lawTax evasion is not deliberately making no declaration to tax authoritiesTax avoidance is any legal method used by a taxpayer to minimize the amount of income tax owed. If you pay MILLION UGX1000 in taxes on an income of MILLION UGX10, 000 and MILLION UGX1, 600 in taxes on an income of MILLION UGX15,000, the income tax system is:ProgressiveRegressiveProportionalIndirect People without a job but are actively seeking a jobUnemployedEmployedUnderemployedDiscouraged worker In the work-leisure choice model, if the wage rate increases from below Linda's reservation wage to above Linda's reservation wage, thenLinda will work less.Linda will enter the labour force.Linda will choose more leisure.Linda will leave the labour force. The following are policies by which governments in LDCs might promote economic development except one:Governments could encourage a reduction in population by various measures including: educating the population in family planning methods; improving the welfare of its citizens and providing better social services for its citizens.Provision of clean water & proper sanitation.Decrease emphases on one crop/diversify production.Purchasing of government bonds in an open market operation Which does not clearly describe best definition of economics system?Economic system driven by supply and demand.Private Businesses and consumers control the marketplace with little to no interference from the governmentthe government does not have a central plan for the nation's economyThe decisions regarding investment, production and distribution are not guided by the price signals created by the forces of supply and demand Uganda’s current account in the Balance of Payments is in deficit’. The statement reasons why this situation exists. ExceptVisible imports exceed invisible exports.Repatriation of profits by multinationals operating in IrelandRepayments on external portion of national debtGreater disposable incomes in Uganda which results in an increase in the level of imports Which of the following statements about the production function for waterproof teabags, illustrated at right, is correct?The average product of labor at L0 is 2 and the marginal product of labor at L0 is 3.The average product of labor at L0 is ½ and the marginal product of labor at L0 is 1/3.The average product of labor at L0 is 3 and the marginal product of labor at L0 is 2.The average product of labor at L0 is 1/3 and the marginal product of labor at L0 is ½. 3 out of 4 To maximize profits, a manufacturer of motorcycle seatbelts should produce the output at which:TR = TC and the difference between MR and MC is a large as possible.MR = MC and the difference between TR and TC is a large as possible.MC = AVC and the difference between P and MC is a large as possible.MC = ATC and the difference between P and ATC is a large as possible. 4 out of 4 Time is Up!