The Institute of Cost and Works Accountants of India 2011 CWA Foundation Economics and Business Fundamentals (Syllabus 2008) - Question Paper
December 2011: The Institute of Cost and Works Accountants CWA Foundation: Economics and Business Fundamentals (Syllabus 2008): December 2011 University ques. paper
CWA ICWA Foundation : Economics and Business Fundamentals - December 2011
P3(EBF)
Syllabus 2008
Time Allowed : 3 Hours Full Marks : 100
The figures in the margin on the right side indicate full marks.
SECTION I (60 Marks)
Answer Question No. 1 which is compulsory and any two from the rest.
Marks
1. (a) Answer the following : 1x9
(i) Name the author of "Weath of Nations".
(A) Adam Smith
(B) Alfred Marshall
(C) J.K.Mehta
(D) A.C.Pigou
(ii) Economics is
(A) Science
(B) An Art
(C) Science and an Art
(D) Psychology
(iii) Deductive Method of Economic Analysis is based on
(A) General to Particular
(B) Particular to General
(C) Neutral
(D) None of the above
(iv) Money supply constitutes
(A) Rupee notes and coins with the public
(B) Credit cards
(C) Travellers cheques
(D) All the above
(v) Consumers surplus was propounded by
(A) Alfred Marshall
(B) A.C. Pigou
(C) J.R.Hicks
(D) J.M.Keynes
(vi) Production function is
(A) Input-output relationship
(B) Creation of utility
(C) Want satisfying capacity
(D) None of the above
(vii) Homogeneous product is the characteristic of
(A) Perfect competition
(B) Monopoly
(C) Monopolistic competition
(D) Oligopoly
(viii) Non-price competition is the characteristic of
(A) Monopoly
(B) Duopoly
(C) Oligopoly
(D) Imperfect competition
(ix) A producer or seller selling its commodity at different prices to different customers is
(A) Discriminating Monoploy
(B) Monopoly
(C) Perfect competition
(D) Duopoly
(b) Fill in the blanks :
1x12
(i) NNP at market price is GNP_depreciation of capital stock.
(ii) GNP is a wider concept than_.
(iii) Average propensity to consume is_to c/y.
(iv) The production of foodgrains according to Malthus increases at an_progression.
(v) Over population is corrected by preventive checks and_checks.
(vi) The formula for the calculation of optimum population is_.
(vii) Fishers equation is_.
(viii) Money is created by the_bank.
(ix) Demand Pull inflation is when aggregate demand
(x) When there is continuous rise in price level, it is called
aggregate supply.
(xi) Cheap money policy is followed by central bank during
(xii) Economy in administration is one of the
measures during inflation.
(c) State which of the following statement is "True" and which is "False".:
(i) Credit is created by commercial banks.
(ii) Adequate liquidity is an essential condition of a sound banking system.
(iii) Size of C.R.R. does not affect the credit creation of commercial banks.
(iv) Central bank is the custodian of foreign exchange reserves.
(v) Expansion and contraction of credit are affected by quantitative techniques of credit control.
(vi) Use and direction of credit are affected by qualitative techniques of credit control.
(vii) Balance of trade comprises of exports and imports.
(viii) Balance of payments is broader than balance of trade.
(ix) Invisible items are included in exports and imports.
(d) Define the following terms in not more than two lines: 1x6
(i) Direct Tax,
(ii) Conon of Economy,
(iii) Deficit Financing,
(iv) Fiscal Policy,
(v) Monetary Policy,
(vi) Progressive Tax.
2. Write short notes on the following: 6+6
(a) Functions of Money
(b) Fixed costs and Variable costs.
3. Describe the essentials of a sound banking system and salient features of International trade. 6+6
4. Discuss the Canons of Taxation. 12
SECTION II (40 Marks)
Answer Question No. 5 which is compulsory and any two from the rest.
5. (a) Answer the following : 1x6
(i) All business activities fall under the categories of (1)
(A) Industry
(B) Trade
(C) Commerce
(D) All the above
(ii) Salient features of a co-operative are (1)
(A) Voluntary Association
(B) Service Motive
(C) Equality
(D) All the above
(iii) Characteristics of Joint Stock Company are (1)
(A) Incorporated Association
(B) Voluntary Association
(C) Artificial legal person
(D) All the above
(iv) Which is not the merit of state enterprise? (1)
(A) Easy formation
(B) Acceleration of economic growth
(C) Balanced regional development
(D) Economy
(v) Advantages of limited partnership are
(A) Enables people to invest
(B) Mobilises larger financial resources
(C) More stable
(D) All the above
(vi) Which is not the characteristic of Joint Hindu Family Business?
(A) No registration
(B) Only male members
(C) Status arises not born in the family
(D) Managed by Karta.
(ii) Unlimited liability of a company means
(iii) A private limited company is better placed to maintain
of the affairs of business.
from the company that he has promoted.
(iv) The promoter must not make any
(v) Memorandum of Association is one of the basic
of the company.
meeting.
(vi) The first official general meeting of shareholders is called
(c) State which of the following statement is "True" and which is "False":
1x6
(i) One of the social responsibilities of a business is to protect consumer interest.
(ii) SWOT analysis deals with strength, weaknesses, opportunities and threats of a business.
(iii) W.T.O. is not a part of international environment.
(iv) Clarity of message is one of the principles of effective communication.
(v) Motivation to employees is not an objective of communication.
(vi) Sending Written message through telecommunication link is called e-mail.
(d) Define the following terms in not more than two lines: 1x6
(i) Stock Exchange,
(ii) Jobbers,
(iii) Stag,
(iv) Contract note,
(v) Brokers,
(vi) Forward delivery contracts.
6. Write short notes on: 4+4
(a) Registration of partnership;
(b) Salient features of public company.
7. Discuss the various objectives of a business. 8
8. Describe the essential elements in the process of an effective communication system. 8
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