AFM 131 EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS
What is benchmark interest rate?
Rate at which Bank of Canada loans money to financial institutions.
What are business cycles?
Rise and fall in economic activity over time.
What is Consumer Price Index (CPI)?
Price index that compares change in prices for commonly purchased goods.
What is depression?
Severe form of recession with longer period of declining economic activity.
What is deregulation?
Removal of some laws and regulations to allow for more competition.
What are economies of scale?
Advantages of having cost of production spread over larger number of units produced.
What is environmental scan?
Assessment of business environment to see factors that could impact growth and
success.
What are factors of production?
Land, labour, capital, entrepreneurship, and knowledge.
What is fiscal policy?
How government keeps economy stable through changes in taxes and spending.
, What is Gross Domestic Product (GDP)?
Total value of final goods and services produced within a country in a year.
What is GDP per capita?
GDP per person in a country.
What is inflation?
Rise in price of goods and services over time.
What is macroeconomics?
Studies what can impact an economy as a whole.
What is microeconomics?
Studies decisions made by individuals and businesses within the economy.
What is monetary policy?
Management of money supply and interest rates.
What is national debt?
Accumulation of government deficits over time.
What is peak in business cycle?
Highest point of economic activity before contraction.
What is trough in business cycle?
Lowest point of economic activity before recovery.
What is PEST?
Political, Economic, Social, and Technological factors review.
What is Porter's five forces?
To help you assess the competitive landscape reviewing:
SOLUTIONS
What is benchmark interest rate?
Rate at which Bank of Canada loans money to financial institutions.
What are business cycles?
Rise and fall in economic activity over time.
What is Consumer Price Index (CPI)?
Price index that compares change in prices for commonly purchased goods.
What is depression?
Severe form of recession with longer period of declining economic activity.
What is deregulation?
Removal of some laws and regulations to allow for more competition.
What are economies of scale?
Advantages of having cost of production spread over larger number of units produced.
What is environmental scan?
Assessment of business environment to see factors that could impact growth and
success.
What are factors of production?
Land, labour, capital, entrepreneurship, and knowledge.
What is fiscal policy?
How government keeps economy stable through changes in taxes and spending.
, What is Gross Domestic Product (GDP)?
Total value of final goods and services produced within a country in a year.
What is GDP per capita?
GDP per person in a country.
What is inflation?
Rise in price of goods and services over time.
What is macroeconomics?
Studies what can impact an economy as a whole.
What is microeconomics?
Studies decisions made by individuals and businesses within the economy.
What is monetary policy?
Management of money supply and interest rates.
What is national debt?
Accumulation of government deficits over time.
What is peak in business cycle?
Highest point of economic activity before contraction.
What is trough in business cycle?
Lowest point of economic activity before recovery.
What is PEST?
Political, Economic, Social, and Technological factors review.
What is Porter's five forces?
To help you assess the competitive landscape reviewing:
