BEC CPA Exam Review Questions & Answers
1.Demand Curve Shift Upward (direct relationship-positive shift)
Answer The price of subsitute goods, expectations of price changes,
income for normal goods, and extent of market
2.Demand Curve Shift Downward (inverse relationship-neg. shift)
Answer The price of complement good, income for inferior goods, and
consumer boycotts
3.SWOT analysis
Answer strengths, weaknesses, opportunities, threats
4.Three common measures of price inflation
Answer 1. The Consumer Price Index (CP)
2.The Producer Price Index (PPI)
3.The GDP Deflator
5.Okun's law
Answer Provides a general rule of thumb showing how economic
growth rates faster than average often result in reductions in
unemployment
6.Product differentiation strategies
,Answer seek to make the demand for a firm's prod- ucts more inelastic.
7.Transfer pricing
Answer is the process for setting prices that are charged for the transfer
of goods or services between related parties such as departments of a
large entity.
8.Full employment implies that
Answer there frictional and structural unemployment, but not cyclical
unemployment.
9.The consumer price index (CPI)
Answer is a common measure of inflation. It compares the price of
goods and services in a base year to the price of the same goods and
services at a later year. The CPI is commonly used to convert figures
not readily comparable across years into figures that are more
comparable.
10.The phases of the business cycle are
Answer expansion, peak, contraction (ie, reces- sion), and trough.
11.Peaks are
Answer usually characterized by a lack of available labor and capital,
which results in a deceleration of growth. Output is at maximum and
unemployment is as low as possible—or at the "natural" rate.
, 12.Tight labor markets and lack of excess capacity often result in
Answer the bidding up of wages and prices, leading to an acceleration
of inflation.
13.A change in account balances will always be measured as
Answer (the current balance - the prior balance), with a positive
result indicating an increase and a negative result a decrease.
14.% changes for account balances =
Answer (Current balance - prior balance) / prior balance.
15.Transportation costs would exist
Answer even in the absence of government.
16.There are three common measures of price inflation
Answer consumer price index, producer price index and GDP deflator.
17.Deflation
Answer a decrease in the general level of prices and inflation rate is
below zero
18.Collusive pricing
Answer results when competing suppliers agree that they will not
compete on the basis of price, setting a uniform price to be charged by
1.Demand Curve Shift Upward (direct relationship-positive shift)
Answer The price of subsitute goods, expectations of price changes,
income for normal goods, and extent of market
2.Demand Curve Shift Downward (inverse relationship-neg. shift)
Answer The price of complement good, income for inferior goods, and
consumer boycotts
3.SWOT analysis
Answer strengths, weaknesses, opportunities, threats
4.Three common measures of price inflation
Answer 1. The Consumer Price Index (CP)
2.The Producer Price Index (PPI)
3.The GDP Deflator
5.Okun's law
Answer Provides a general rule of thumb showing how economic
growth rates faster than average often result in reductions in
unemployment
6.Product differentiation strategies
,Answer seek to make the demand for a firm's prod- ucts more inelastic.
7.Transfer pricing
Answer is the process for setting prices that are charged for the transfer
of goods or services between related parties such as departments of a
large entity.
8.Full employment implies that
Answer there frictional and structural unemployment, but not cyclical
unemployment.
9.The consumer price index (CPI)
Answer is a common measure of inflation. It compares the price of
goods and services in a base year to the price of the same goods and
services at a later year. The CPI is commonly used to convert figures
not readily comparable across years into figures that are more
comparable.
10.The phases of the business cycle are
Answer expansion, peak, contraction (ie, reces- sion), and trough.
11.Peaks are
Answer usually characterized by a lack of available labor and capital,
which results in a deceleration of growth. Output is at maximum and
unemployment is as low as possible—or at the "natural" rate.
, 12.Tight labor markets and lack of excess capacity often result in
Answer the bidding up of wages and prices, leading to an acceleration
of inflation.
13.A change in account balances will always be measured as
Answer (the current balance - the prior balance), with a positive
result indicating an increase and a negative result a decrease.
14.% changes for account balances =
Answer (Current balance - prior balance) / prior balance.
15.Transportation costs would exist
Answer even in the absence of government.
16.There are three common measures of price inflation
Answer consumer price index, producer price index and GDP deflator.
17.Deflation
Answer a decrease in the general level of prices and inflation rate is
below zero
18.Collusive pricing
Answer results when competing suppliers agree that they will not
compete on the basis of price, setting a uniform price to be charged by
