440 1&2

An increase in the price of Commodity Y from $50 to $60 resulted in an increase in the quantity supplied, from 80 units to 88 units. Which one of the following is the price elasticity of supply? + 0.5. ‐ 2. + 2. + 1.2

+0.5

In 2015, consumption for a region was measured at $12 Billion, disposable income at $16 Billion and savings at $4 Billion. In 2016, consumption was $15 Billion, disposable income was $20 Billion and savings was $5 Billion. What was the marginal propensity to consume for 2016? .8 .6 1.0 .75

.75

This question is based on the following information. Total units of product Average fixed cost Average variable cost Average total cost 6 $15.00 $25.00 $40.00 7 12.86 24.00 36.86 8 11.25 23.50 34.75 9 10.00 23.75 33.75 The marginal cost of producing the ninth unit is $33.75 $25.75 $23.75 $23.50

25.75

For the most recent period, Frictional unemployment was 3%, Structural unemployment was 2%; Seasonal unemployment was 1% and Cyclical unemployment was negligible. What is the level of Natural Unemployment? 3% 5%. 6%. 4%

6%

Which of the following explanations would lead to a downward (inward to the left) shift in the demand curve for cable television? Satellite television raises its prices. Consumers anticipate that cable television providers will be lowering their prices tomorrow. Two major employers relocate to the area. An exciting pay-per-view event will be carried on cable television.

Consumers anticipate that cable television providers will be lowering their prices tomorrow

According to the 17 COSO control principles, risk reduction primarily relates to which fundamental component of internal control: Monitoring. Control activities. Control environment. Risk assessment.

Control Activities

The definition of internal control developed by the Committee of Sponsoring Organizations (COSO) in the professional standards includes the reliability of financial reporting, compliance with applicable laws and Incorporation of ethical business practice standards. Effectiveness of prevention of fraudulent occurrences. Safeguarding of entity assets. Effectiveness and efficiency of operations.

Effectiveness and efficiency of operations

Which of the following is not an advantage of establishing an enterprise risk management system within an organization? Eliminates all risks. Identify potential events that may affect the organization's wellbeing. Provides integrated responses to multiple risks. Helps assure achievement of organizational objectives.

Eliminates all risks

A public company audit committee's "financial expert" must have all of the following except: Holding either an active CPA or a CMA designation. Experience in preparing or auditing financial statements of comparable companies and application of such principles in connection with accounting for estimates, accruals, and reserves. Experience with internal auditing controls. An understanding of GAAP and financial statements.

Holding either an active CPA or a CMA designation

The free‐market economy flow model depicts four major interrelated flows: I . Individuals provide economic resources to business firms. II. Firms provide payment to individuals for economic resources. III. Firms provide goods and services to individuals. IV. Individuals provide payment to firms for goods and services. If the cost of imported oil declined suddenly and significantly, which one of the above flows would be most likely to be the first impacted? III. I. II. IV.

III

According to COSO, an effective approach to monitoring internal control involves each of the following steps, except Assessing and reporting the results, including following up on corrective action where necessary. Designing and executing monitoring procedures that are prioritized based on risks to achieve organizational objectives. Establishing a foundation for monitoring. Increasing the reliability of financial reporting and compliance with applicable laws and regulations.

Increasing the reliability of financial reporting and compliance with applicable laws and regulations.

Which of the following statements presents an example of an application control for a computerized system? Limiting access to data storage and backup server rooms to only certain employees. Limiting entry of sales transactions to only valid credit customers. Restricting access to the computer center by use of biometric devices. Requiring administrative approval for any applications or programs downloaded on company hardware.

Limiting entry of sales transactions to only valid credit customers

Jeffrey Smiggles of Rajon Rondo Sportswear has developed a software application that helps monitor key production risks at company factories. In order to reduce costs, his approach to monitoring risks is likely to be: Monitor all risks using indirect information. Monitor more important risks using direct information and less important risks using indirect information Monitor all risks using direct information. Monitor more important risks using indirect information and less important risks using direct information.

Monitor more important risks using direct information and less important risks using indirect information

This component of internal control concerns testing the system and its data. Control activities. Risk assessment. Monitoring. Control environment.

Monitoring

Key risk indicators are Indicators of internal control quality. Used primarily by risk-aware, risk-averse entities. Substantively equivalent to KPIs. Predictive and usually quantitative.

Predictive and usually quantitative

Jiffy Grill has an ERP system. It has assigned responsibility for determining who has what access rights within the ERP system. This assignment mostly likely was to: Management Support functions External Parties Internal Auditors

Support functions

Susan Yao is a member of the Board of Directors of a U.S. public company listed on the New York Stock Exchange. Which of the following situations would not prevent Susan from being independent? Susan is a financial expert, who also was lead auditor last year for the company's external audit firm. She resigned to serve on the Board. Susan is the CEO for another company in another industry altogether. Susan is a major stockholder in the company, owning 10% of the voting shares. Susan was CEO last year, but resigned to serve on the Board.

Susan is a major stockholder in the company, owning 10% of the voting shares

Management of Johnson Company is considering implementing technology to improve the monitoring component of internal control. Which of the following best describes how technology may be effective at improving monitoring? Technology can provide information more quickly. Technology can identify conditions and circumstances that indicate that controls have failed or risks are present. Technology can assure that items are processed accurately. Technology can control access to terminals and data.

Technology can identify conditions and circumstances that indicate that controls have failed or risks are present.

Which of the following bodies has developed a framework for enterprise risk management? The Committee of Sponsoring Organizations (COSO). The Public Company Accounting Oversight Board (PCAOB). The American Institute of Certified Public Accountants (AICPA). The Institute of Risk Management Professionals (IRMP).

The committee of sponsoring organizations

A management accountant performed a linear regression of maintenance cost vs. production using a computer spreadsheet. The regression output shows an "intercept" value of $322,897. How should the accountant interpret this information? The residual error of the regression is $322,897. X has a value of $322,897 when Y equals zero. Maintenance cost has an average value of $322,897. Y has a value of $322,897 when X equals zero.

Y has a value of $322,897 when X equals zero

Which of the following is the best definition of a compensating control? A control that accomplishes the same objective as another control. Metrics that reflect critical success factors. The targets against which the effectiveness of internal control are evaluated. A condition within an internal control system requiring attention.

a control that accomplishes the same objective as another control

Economic markets that are characterized by monopolistic competition have all of the following characteristics except: Multiple competing providers of a product or service A horizontal demand curve Some ability to differentiate the same general product or service Ability to make profit in the short-run, but not in the long-run

a horizontal demand curve

If the income elasticity of demand coefficient for a particular product is 3.00, the good is likely A necessity. A luxury good. A complementary good. An inferior good.

a luxury good

Which of the following individuals would be most hurt by an unanticipated increase in inflation? A retiree living on a fixed income. A borrower whose debt has a fixed interest rate. A union worker whose contract includes a provision for regular cost‐of‐living adjustments. A saver whose savings was placed in a variable‐rate savings account.

a retiree living o fixed income

Which of the following would be considered to be unemployed? All of the above An unskilled worker who has given up on finding a job. A worker who is currently displaced due to the seasonal nature of his job. A part-time worker seeking a full time job.

a worker who is currently displaced due to the seasonal nature of his job

A period of economic expansion is characterized by which of the following? higher interest rates an extended period of increasing output as measured by real GDP. Consumer staples and utilities outperforming other sectors of the economy a peak.

an extended period of increasing output as measured by real gdp

In macroeconomics, which one of the following would not be considered investment spending? An individual acquires shares of common stock. A business acquires inventory to expand its product line. A business acquires new production equipment. A family has a new home constructed.

an individual acquires shares of common stock

Some economic indicators lead the economy into a recovery or recession, and some lag it. An example of a lag variable would be Orders for consumer and producer goods. Permits for Housing starts Average duration of unemployment. Stock prices

average duration of unemployment

Which of the following sectors is most likely to be relevant in both microeconomic and macroeconomic models of free‐market flows? Financial entities. Foreign entities. Business entities. Governmental entities.

business entities

The primary purpose of the consumer price index (CPI) is to Compare relative price changes over time. Help determine the Federal Reserve Bank's discount rate. Identify the strength of an economic recovery. Establish a cost‐of‐living index.

compare relative price changes over time

According to the COSO framework, evaluators who monitor controls within an organization should have which of the following sets of characteristics? Authority and responsibility. Judgment and objectivity. Respect and judgment. Competence and objectivity.

competence and objectivity

Which of the following may provide a leading indicator of gross domestic product? Wage rate. Consumer expectations The ratio of installment loans to personal income Inventory Turnover

consumer expectations

Milo Corp. maintains daily backups of its accounting system in a fireproof vault in the file library. Weekly, monthly, and annual backups are stored in a secure, fireproof vault at an off‐site location. Maintenance of the backup files is an example of a corrective control. a feedback control. a preventive control. a detective control.

corrective control

Which of the following segments of the economy tend to do well during the early stages of an expansion? Consumer staples and utilities Basic materials and technology Cyclical firms and energy Financial firms

cyclical firms and energy

For a given level of tax collections, prices, and interest rates, a decrease in government spending will result in a(n) Decrease in aggregate demand. Decrease in aggregate supply. Increase in aggregate demand. Increase in aggregate supply.

decrease in aggregate demand

In the short run, a severe hurricane creates an immediate strong increase in demand for roofers. Some roofers in other parts of the country are then attracted to the disaster area. Assume that in the long run the increase in demand still exceeds the increase in supply. Incorporating these facts in an analysis, the price for roofers in the short run increases, while in the long run the price will Decrease, but remain above the original price. Decrease below the original price. Return to the original price. You Answered Continue to increase.

decrease, but remain above the original price

Which one of the following is not a key assumption of perfect competition? Customers are indifferent about which firm they buy from. The level of a firm's output is small relative to the industry's total output. Firms sell a homogeneous product. Each firm can price its product above the industry price.

each firm can price its product above the industry price

In the long run, a firm may experience increasing returns due to Comparative advantage. Law of diminishing returns. Economies of scale. Opportunity costs.

economies of scale

The Wasabi Electronics employee survey related to fraud risk includes this question: "Employees who report suspected improprieties are protected from reprisal." This question best relates to which of the following fraud management principles and processes? Establishing a fraud risk management program. Establishing a communication program to obtain information about potential frauds. Selecting, developing, and deploying fraud controls. Selecting, developing, and deploying evaluation and monitoring processes.

establishing a communication program to obtain information about potential frauds

Greater barriers to collusion exist for oligopolistic firms when There are fewer firms in the industry. The firms' products are standardized. General economic conditions are recessionary. The firms' costs are more similar.

general economic conditions are recessionary

Which of the following items is one of the five components of the enterprise risk management framework? Industry. Operations. Governance and Culture. Compliance.

governance and culture

All of the following are components of the formula used to calculate gross domestic product using the expenditure method except: Foreign net export spending. Household income. Government spending. Business Expenditures

household income

Which of the following is an important threat to accountability in an organization's ERM practices? Excessive communication. Hypocrisy (i.e., when management says one thing and does another). Deviations. Escalation.

hypocrisy

Assume a decrease in the cost of resources results in increased supply, but demand remains unchanged. What will be the likely effect on aggregate equilibrium quantity and price if a classical supply curve is assumed? Quantity Price Decrease Increase Increase Increase Decrease Decrease Increase Decrease

increase decrease

Which of the following is most likely to increase aggregate demand? Increased business investment. Increased savings by consumers. Increased spending on imported goods. Increasing tax rates and tax revenues.

increased business investment

Which of the following is a natural reason for a monopolistic market condition? A horizontal demand curve. Government Regulation. Ability to differentiate a product or service. Increasing Return to Scale.

increasing return to scale

One difference between M1 and M2 is individual money markets the amount of deposits in checking accounts of U. S. banks. Accounts Receivable large institutional investments

individual money markets

Dennis Rodman's Shoes and Shinola recently implemented a whistleblower hotline to facilitate the reporting of events and concerns related to potential violations of its code of conduct. This initiative most likely occurs as a part of which component in the ERM framework? Information, Communication, and Reporting. Performance. Governance and Culture. Strategy and Objective‐Setting.

information, communication, and reporting

Which of the following stipulations was included in the Dodd-Frank Act of 2010? Compensation committee members could not also serve as members on the audit committee. The compensation committee must include at least one shareholder. Members of the Board serving on the compensation committee must be independent. Incentive based compensation for managers could not exceed 50% of total compensation.

members of the Board serving on the compensation committee must be independent

Which competition form describes an industry that has a relatively large number of firms operating noncollusively and producing differentiated products? Oligopoly. Pure competition. Pure monopoly. Monopolistic competition.

monopolistic competition

Which of the following is an assumption in a perfectly competitive financial market? No single trader or traders can have a significant impact on market prices. Some traders can impact market prices more than others. Trading prices vary based on supply only. Information about borrowing/lending activities is only available to those willing to pay market prices.

no single trader or traders can have a significant impact on market prices

If both the supply and the demand for a good increase, the market price will Rise only in the case of an inelastic demand function. Rise only in the case of an inelastic supply function. Fall only in the case of an inelastic supply function. Not be predictable with only these facts.

not be predictable with only these facts

In which of the following market structures is there the greatest incentive and is it most feasible for firms to engage in collusion in the setting of the quantity and price of industry output? Monopolistic competition. Monopoly. Oligopoly. Perfect competition.

oligopoly

Which of the following is a market structure characterized by a few selling firms, each of which is large enough to influence market price? Monopolistic competition. Oligopoly. Perfect monopoly. Perfect competition.

oligopoly

Overland Stage and Transport uses a fraud risk assessment heat map that charts the significance (on the vertical axis) and the likelihood (on the horizontal axis) of frauds as a part of its fraud risk management program. The company's use of a fraud risk heat map best relates to which of the following activities? Selecting, developing, and deploying fraud controls. Performing a comprehensive fraud risk assessment. Establishing a fraud risk management program. Selecting, developing, and deploying evaluation and monitoring processes.

performing a comprehensive fraud risk assessment

A supply curve illustrates the relationship between Price and consumer tastes. Supply and demand. Price and quantity supplied. Price and quantity demanded.

price and quantity supplied

Aggregate demand remains unchanged, but there is an increase in aggregate supply. Assuming a Keynesian Model supply curve, and assuming the economy is operating at full employment, what would be the effect on equilibrium Price and Quantity? Price would decline; Quantity would increase Both would increase Price would decrease and Equilibrium quantity would remain unchanged. Quantity would increase but price would remain unchanged.

price would decline; quantity would increase

X and Y are complementary products. If the price of product Y increases, the immediate impact on product X is that its Price will decrease. Price, quantity demanded, and supplies will remain unchanged. Quantity demanded will decrease. Quantity supplied will decrease.

quantity demanded will decrease

A company has a policy of frequently cutting prices to increase sales. Product demand is significantly elastic. What impact would this have on the company's situation? Quantity increases proportionally less than the price declines. Quantity increases proportionally more than the price declines. Price increases proportionally more than the quantity declines. Price increases proportionally less than the quantity declines.

quantity increases proportionally more than the price declines

Which of the following policy packages is the most effective way to dampen the economy and slow aggregate demand? Reduce government spending, reduce taxes, reduce money supply, and reduce interest rates. Increase government spending, reduce taxes, increase money supply, and reduce interest rates. Reduce government spending, increase taxes, increase money supply, and increase interest rates. Reduce government spending, increase taxes, reduce money supply and increase interest rates.

reduce government spending, increase taxes, reduce money supply and increase interest rates

Which one of the following actions would not be taken by the Federal Reserve System to stimulate the economy? Reduce the discount rate. Increase the money supply. Reduce the reserve requirement. Reduce tax rates.

reduce tax rates

An investment firm determines that investments in bitcoin are highly risky. For its portfolio, it sets a minimum investment of 3% and a maximum investment of 8% in bitcoin. This is an example of setting risk floor (minimum) and risk ceiling (maximum). risk roof (minimum) and risk target (maximum). risk target (minimum) and risk roof (maximum). risk ceiling (minimum) and risk floor (maximum).

risk floor (minimum) and risk ceiling (maximum)

Which of the following is not included in a calculation of this period's GDP? Investments in capital expenditures by businesses Sales of goods produced in prior periods. Unsold inventory produced this period Government spending on infrastructure

sales of goods produced in prior periods

When maximizing utility in economics, what is being maximized? Elasticity. Satisfaction. Costs. Profits.

satisfaction

Management of Warren Company has decided to respond to a particular risk by hedging the risk with futures contracts. This is an example of risk Acceptance. Sharing. Reduction. Avoidance.

sharing

The rate of unemployment caused by changes in the composition of employment opportunities over time is referred to as the Full employment unemployment rate. Structural unemployment rate. Frictional unemployment rate. Cyclical unemployment rate.

structural unemployment rate

The local video store's business increased by 12% after the movie theater raised its prices from $6.50 to $7.00. Thus, relative to movie theater admissions, videos are Substitute goods. Superior goods. Public goods. Complementary goods.

substitute goods

Which of the following is considered a leakage in the Macroeconomic model of resource flows? taxes. investments exports government spending

taxes

The Sarbanes-Oxley Act of 2002 seeks to improve investor confidence by providing greater transparency for all of the following issues, except: The Act requires the CEO to provide an explanation of the means and methods by which the company intends to balance risk against growth The Act places the power to hire, compensate, and terminate public accounting firms in the hands of the audit committee. The Act requires both the CEO and CFO to certify in writing that their company's financial statements and disclosures fairly represent the results of operations. The Act places restrictions on audit firms, such as prohibiting public accounting firms from providing a variety of non-audit services to an audit client.

the Act requires CEO to provide an explanation of the means and methods by which the company intends to balance risk against growth

Which of the following statements is correct if there is an increase in the resources available within an economy? The economy will be capable of producing more goods and services. Price will increase. There will be an increase in aggregate demand The technological efficiency of the economy will improve.

the economy will be capable of producing more goods and services

Which one of the following is central to determining the nature of market structure in a free‐market economy? The nature of the good or service provided by the market. The size of the market. Whether the market provides goods or, alternatively, services. The extent of competition in the market.

the extent of competition in the market

In a perfect monopoly, which of the following describes the relationship between the marginal revenue curve and the demand curve? The marginal revenue curve is below the demand curve and the curves diverge as the quantity increases. The marginal revenue curve is the demand curve. The marginal revenue curve is below and parallel to the demand curve. The marginal revenue curve is above the demand curve and the curves diverge as the quantity increases.

the marginal revenue curve is below the demand curve and the curves diverge as the quantity increases

The discount rate of the Federal Reserve System is The specified percentage of a commercial bank's deposit liabilities that must be deposited in the central bank. The rate that the central bank charges to commercial banks to meet their reserve requirements. The ratio of excess reserves to legal reserves that are deposited in the central bank. The rate that commercial banks charge for loans granted to the public.

the rate that the central bank charges to commercial banks to meet their reserve requirements

An increase in taxes on cigarette production would cause which one of the following to occur? The demand curve will shift inward. The supply curve will shift outward. The supply curve will shift inward. The demand curve will shift outward.

the supply curve will shift inward

An economy reaches a point at which all available resources are employed at maximum efficiency. Which of the following would be true? There would be a general increase in the quantity supplied Price would increase The economy is now operating inside of the Production Possibility Curve. Aggregate demand would increase

there would be a general increase in the quantity supplied