ACCA Applied Knowledge (BT, MA, FA) · Business and Technology (BT)

Macroeconomic and microeconomic factors

11 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 11 questions

  1. Which of the following is an example of fiscal policy?
  2. The central bank raises interest rates. What is the most likely effect on a company with a large variable-rate bank loan?
  3. A UK exporter receives payment in US dollars. What is the effect on the exporter's sterling revenue if sterling strengthens against the dollar?
  4. The price of a product rises from £10 to £12 (an increase of 20%) and the quantity demanded falls from 500 to 400 units (a fall of 20%). What is the price elasticity of demand?
  5. A product has a price elasticity of demand of −2.5. The firm raises the price by 4%. What is the expected percentage change in quantity demanded?
  6. If the demand for a product is elastic and the firm raises its price, what happens to total revenue?
  7. Which type of market structure has many sellers offering differentiated products, and each seller has some control over its price?
  8. A good has a positive income elasticity of demand of +1.8. What does this tell us about the good?
  9. A rise in the price of tea causes demand for coffee to increase. What are tea and coffee called?
  10. In a competitive market, a technological improvement lowers production costs for all suppliers. What is the likely effect on the equilibrium price and quantity?
  11. A firm sells 1,000 units a month at £20. The price elasticity of demand is estimated at −0.5, and the firm raises the price to £22. What is the expected effect on monthly revenue?

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