The Institute of Cost and Works Accountants of India 2011 CWA Foundation Economics and Business Fundamentals (Syllabus 2008) - Question Paper
June 2011: The Institute of Cost and Works Accountants CWA Foundation: Economics and Business Fundamentals (Syllabus 2008): June 2011 University ques. paper
CWA ICWA Foundation : Economics and Business Fundamentals - June 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) Economics is
(A) Normative science
(B) Positive science
(C) Human science
(D) Political science
(ii) Theory of Demographic transition was developed by
(A) Malthus
(B) Pigou
(C) Walker
(D) Keynes
(iii) Bank rate policy is a
(A) Quantitative method
(B) Qualitative method
(C) Optional method
(D) Fiscal method
(iv) Inductive Method proceeds from
(A) Particular to General
(B) General to Particular
(C) Imagination to reality
(D) None of the above
(v) Constituents of money supply are
(A) Rupee note and coins with the public
(B) Credit cards
(C) Traveller s cheques etc.
(D) All the above
(vi) Total revenue is equal to
(A) Price x Quantity sold ATR
(B)
AQ
TR
(C)-
(D) All the above
(vii) The author of General Theory of Employment and Money was
(A) Adam Smith
(B) Paul Samuelsen
(C) J.M.Keynes
(D) Robbins
(viii) The law supply creates its own deman was put forth by
(A) Marshall
(B) Pigou
(C) Robbins
(D) J.B.say
(ix) Greshams law says
(A) Good money drives out bad money out of circulation
(B) Bad money drives out good money out of circulation
(C) Both good and bad money go out of circulation
(D) None of the above
(b) Fill in the blanks:
1x12
(i) Percapita income figure would be inflated because of_
(ii) When the rate of taxation decreases with the increase in income it is called_
taxation.
(iii )_unemployment means when a large part of workforce engaged could be removed
without reducing the total output.
(iv) Theory of comparative coat was developed by_
(v) Cash Reserve Ratio should be_to control inflation.
(vi) National Income is nothing but the income of a nation or a_
(vii) Labour is a_factor.
(viii) Generally money is created by the_.
(ix) Fishers equation is MV =_.
(x) Investment means a change in the stock of capital over a period of_.
(xi) The two primary functions of a commercial bank are the_function and
_function.
(xii )_policy is formulated and implemented by Government while
_policy is executed by the Central Bank.
(c) State which of the following statement is True and which is False: 1x9
(i) Giffen goods are otherwise known as superior goods.
(ii) When total utility is zero, marginal utility is maximum.
(iii) Average Fixed cost can never be zero.
(iv) Adequate liquidity is an essential feature of a sound banking system.
(v) Industrial Finance Corporation of India is an investment bank.
(vi) Unfavourable balance of trade exists when imports are greater than exports.
(vii) Theory of absolute trade was propounded by J.M.Keynes.
(viii) An increase in wealth means an increase in welfare.
(ix) Income tax is an indirect tax.
(d) Define the following terms in not more than two lines: 1x6
(i) Consumers surplus
(ii) Shut down point
(iii) Near money
(iv) Regressive tax
(v) Semi-inflation
(vi) Monetary Policy
2. Write short notes on the following: 4x3
(a) Credit creation by commercial banks
(b) Determinants of Elasticity of Demand
(c) Functions of money
3. Define Central Bank. Discuss its various functions.
4. Discuss the Cannous of taxation.
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SECTION II (40 Marks)
Answer Question No.6 which is compulsory and any two from the rest.
Marks
5. (a) Answer the following:
1x6
(i) Articles of Association of a company
(A) is a document showing internal relationship
(B) is a document showing external relationship of a company
(C) is an appeal to the public to subscribe to the shares of a company
(D) is a creditorship document
(ii) OTCEI is
(A) An export organization
(B) Funding agency for industries
(C) A public facility to get scheduled drugs
(D) Assisting small and medium firms to get access to share market nationwide
(iii) All the business activities fall under the categories:
(A) Industry
(B) Trade
(C) Commerce
(D) All the above
(iv) Characteristics of the sole proprietorship are:
(A) Capital contribution
(B) Unlimited liabilities
(C) Limited area of operation
(D) All the above
(v) Merits of a partnership form of business are:
(A) Simple formation
(B) Sufficient resources
(C) Flexibility of operations
(D) All the above
(vi) The securities Contract (Regulation) Act 1956 regulates:
(A) Security of companies
(B) Contractual relations between a company and its shareholders
(C) Formation and functioning of stock exchanges in the country
(D) All the above
(b) Fill in the blanks: 1x6
(i) Perpetual existence is a feature of_organization.
(ii) No redeemable preference share can be redeemed unless they are_.
(iii) The issue of bonus shares by a company is a_.
(iv) All general meetings other than the Statutory and Anual general meetings are called _general meetings.
(v) Government policies are an important part of_environment of a company.
(vi) A written communication provides_record for future reference.
(c) State which of the following are TRUE and which are FALSE 1x6
(i) Misstatements in prospectus leads to cancellation of listing.
(ii) Private company limits its members to fifty.
(iii) Social or cultural environment is a part of political environment.
(iv) Stock exchanges mirror the phases of business cycles.
(v) The company law has not given any legal status to a promoter.
(vi) A stock exchange does not permit speculation.
(d) Define the following terms in not more than two lines: 1x6
(i) Special resolution
(ii) Contract note
(iii) E-mail
(iv) A co-operative
(v) A multinational company
(vi) Minor as a partner
6. (a) Explain the features of good communication.
4+4
4+4
(b) Draft a circular to your customer detailing the new series product you are introducing into the market.
7. What is meant by listing in stock exchange? Explain the procedure for listing in a stock exchange.
8. Discuss the various objectives of a business.
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