Acca paper F1 fia diploma in Accounting and Business Accountant in Business (AB/fab) exam kit



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marks) 
96 
The balance of payment surplus will result in: 

lower rate of economic growth 
B inflation 
C unemployment 
D budget 
deficit 
(2 marks)
97 
The disadvantages of economic growth include which one of the following: 

growth rates may exceed inflation rates 

the gap between rich and poor may narrow 

growth may exceed population growth 

growth may be in ‘demerit’ goods
 (2 
marks) 
98 
Demand side policies are best described as: 

a belief that government should manipulate its spending so as to manage aggregate 
demand

ensuring that demand is contained so that inflation is controlled 

managing down excessive growth by reducing government borrowing 

keeping employment levels substantially below full levels 
(2 marks)
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PRA CTICE OBJE CTIVE TEST QUESTIONS : 
SECTION 1 
K APLA N PUBLISH ING 
23 
99 
Country K is suffering from a recession. A government minister has recently suggested that 
the country’s government should ‘focus more on reducing the power of trade unions and 
the number of state-owned monopolies and less on worrying about running a budget 
surplus.’ 
Which economics theory is the government minister suggesting that country K should 
adopt? 
A Classical 
B Monetarist 
C Keynesian 
D Demand 
side
 (2 
marks) 
100 Country C is experiencing a rising trade deficit. In addition, the costs of these imports are 
rising due to production problems in the countries that export to C. If all else stays 

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