CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25

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  • 18 November, 2025
CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25

CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25

Most Expected Questions | CMA Foundation FBEM

Table of Content

Fundamentals of Business Economics

  1. Basic Concepts
  2. Forms of Market
  3. Money and Banking
  4. Economic and Business Environment

Fundamentals of Management

  1. Fundamentals of Management

CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25 - 6

Fundamentals of Business Economics

Basic Concepts

Question : 1

What does "Y" represent in the equilibrium equation Y = C + I?

  1. Consumption demand
  2. National income (or output)
  3. Investment demand
  4. Savings

Solution:

Question : 2

Deductive method is also called __________

  1. Prior method
  2. Abstract Method
  3. Analytical Method
  4. All the above

Solution:

Question : 3

A good can be considered a normal good, if an increase in the income of a consumer causes ______ in demand of the given good.

  1. increase
  2. no change
  3. decrease
  4. less than proportionate increase

Solution:

Question : 4

In imperfect market, When the seller wants to increase the sales he must reduce the price. When the price is decreased, then the average revenue and marginal revenue are _______________ 

  1. decreased
  2. increased
  3. equal
  4. No change 

Solution:

Question : 5

If the price of burger rises from ₹ 12 per piece to ₹ 20 per piece as a result of which the daily sales decrease from 300 to 200 pieces per day. The price elasticity of demand can be estimated as:

  1. 0.5
  2. 0.8
  3. 0.25
  4. 2.10

Solution:

Question : 6

If any economy remains at a point below the production possibility frontier, that indicates.

  1. Full employment
  2. Unemployment
  3. Excess production
  4. Shortage of supply

Solution:

Question : 7

All Factor of production become variable in

  1. Medium – run
  2. Short- run
  3. Long –run
  4. none of the above

Solution:

Question : 8

A Rational Producer will operate in –

  1. Stage I
  2. Stage II
  3. Stage III
  4. All of the above

Solution:

Question : 9

If an economy is working at the point left to PPF curve that shows ___________.

  1. Full employment
  2. Unemployment
  3. Excess production
  4. None of the above

Solution:

Question : 10

If a firm produces 200 units of commodity X by employing 10 workers and 240 units of the same commodity by employing 12 workers, then the Average Product of the worker is

  1. 20
  2. 40
  3. 200
  4. 240

Solution:

CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25 - 6

Forms of Market 

Question : 11

Demand Curve under Perfect Competition is

  1. downward sloping
  2. horizontal
  3. upward sloping
  4. vertical

Solution:

Question : 12

According to Adam Smith invisible hands are also called ____

  1. Price mechanism
  2. Demand-supply equilibrium
  3. Self-regulating market system
  4. Competitive market forces

Solution:

Question : 13

Which of the following is not a market structure in Economics?

  1. Perfect Competition
  2. Monopoly
  3. Duopoly
  4. Intense Competition

Solution:

Question : 14

Which of the first order condition for the profit of a firm be maximum? 

  1. AC = MR
  2. MC = MR
  3. MR = AR
  4. AC = AR

Solution:

Question : 15

Which of these will have highly inelastic supply?

  1. Perishable goods
  2. Consumer durables goods
  3. Items of elite class consumption
  4. All the three

Solution:

Question : 16

The demand for a monopoly product is __________ elastic .

  1. more
  2. less
  3. neither more nor less
  4. sometimes more sometimes less

Solution:

Question : 17

A firm faces shut down situation in the short run under perfect competition when.

  1. P = AC
  2. P > AVC
  3. P > AFC
  4. P < AVC

Solution:

Question : 18

What is the shape of the demand curve of a firm under perfect competition?

  1. Negatively sloped
  2. Positively sloped
  3. Vertical
  4. Horizontal

Solution:

Question : 19

In which of the following market structure is the degree of control over the price of its product by a firm very large?

  1. Imperfect competition
  2. Perfect competition
  3. Monopoly
  4. In A and B both

Solution:

Question : 20

A monopolist can increase his sale only by ________ the price of his product and thereby maximize his profit.

  1. Increasing
  2. Reducing
  3. Both (a) and (b)
  4. None of the above

Solution:

CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25 - 6

Money and Banking 

Question : 21

EXIM Bank is authorized to raise loan from ________________.

  1. Reserve Bank of India
  2. Government of India
  3. International Market
  4. Trading activities

Solution:

Question : 22

In the Cambridge version of the Quantity Theory of Money, what does the variable "K" represent?

  1. Total transactions
  2. Cash balance (part of income)
  3. Velocity of money
  4. Price level

Solution:

Question : 23

The first State Financial Corporation (SFC) was established in 1953 in which state? 

  1. Maharashtra
  2. Tamil Nadu
  3. Punjab
  4. Uttar Pradesh

Solution:

Question : 24

Another name for Bank Reserve Ratio is

  1. Cash Reserve Ratio
  2. Statutory Liquid Ratio
  3. Variable Reserve Ratio
  4. Bank Rate

Solution:

Question : 25

The rate at which the commercial banks borrow from the RBI is called as __________ 

  1. REPO
  2. PLR
  3. BPLR
  4. Bank Rate

Solution:

Question : 26

The components of micro business environment are 

  1. Firms and consumers
  2. Market & competitors
  3. Organization
  4. All of the above

Solution:

Question : 27

Which one of the following is the primary function of money?

  1. Medium of exchange
  2. Store of value
  3. Standard of deferred payments
  4. Basis of credit

Solution:

Question : 28

Commercial banks provide collateral loans against ________.

  1. bonds
  2. govt. security
  3. both A & B
  4. None

Solution:

Question : 29

Generally commercial bills are prepared for the period of __________________ days

  1. 90
  2. 180
  3. 360
  4. 365

Solution:

Question : 30

The relationship between money supply and price level is

  1. Inverse
  2. Neutral
  3. Proportional
  4. non-proportional

Solution:

CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25 - 6

Economic and Business Environment 

Question : 31

The micro business environment does not include

  1. Economy
  2. Firms and consumers
  3. market and competitors
  4. both(B) and (C)

Solution:

Question : 32

A PESTEL analysis is used to identify threats and ________? 

  1. Competitors
  2. Weaknesses
  3. Profit
  4. Product

Solution:

Question : 33

The PESTEL Analysis is

  1. simple to understand and tough to implement
  2. simple to understand and quick to implement
  3. tough to understand and easy to implement
  4. tough to understand and tough to implement

Solution:

Question : 34

Which of the following is not a component of VUCAFU?

  1. Uncertainty
  2. Ambiguity
  3. Clarity
  4. Volatility

Solution:

Question : 35

The term ‘W’ in SWOT Analysis is : 

  1. Wealth
  2. Wellness
  3. Waste
  4. Weakness

Solution:

Question : 36

Which of the following institutions has been pivotal to the emergence of the digital payment ecosystem in India?

  1. Reserve Bank of India
  2. National Payments Corporation of India
  3. State Bank of India
  4. Industrial Credit and Investment Corporation of India

Solution:

Question : 37

The term ‘S’ in PESTEL stands for- 

  1. Strength
  2. Socio-economic
  3. Sustainability
  4. None

Solution:

Question : 38

Demographic Environment of Business is mainly dependent on …………..

  1. Population size
  2. Government policies
  3. Technological advancements
  4. Economic conditions

Solution:

Question : 39

Under the high_____________, it is impossible to fully analyse the environment and come to rational conclusions. 

  1. Uncertainty
  2. Complexity
  3. Volatility
  4. Ambiguity

Solution:

Question : 40

Deficit Financing means____

  1. financing budgetary deficit by borrowing
  2. financing budgetary deficit by printing money
  3. both (A) & (B)
  4. none of the above

Solution:

CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25 - 6

Fundamentals of Management 

Question : 41

Which of the following is NOT one of the three broad groups of the scope of management according to Herbison and Myres?

  1. Organizational Structure
  2. Economic Resource
  3. System of Authority
  4. Class or Elite

Solution:

Question : 42

The blend of top-down and bottom-up approaches in Planning is known as

  1. Top-Botto m approach
  2. Up-Down approach
  3. Composite approach
  4. Team approach

Solution:

Question : 43

Which is inherent in managerial job and embodied in all the functions of management? 

  1. Planning
  2. Organising
  3. Control
  4. Co-ordination

Solution:

Question : 44

____________ level managers take non-programmed decisions.

  1. Middle
  2. Top
  3. Lower
  4. None of the above 

Solution:

Question : 45

Manager’s power may be measured in terms of his ability to _____.

  1. Give rewards
  2. Punish individuals
  3. Withdraw rewards
  4. All of the above

Solution:

Question : 46

The process of co-ordination must begin in the early stages of

  1. Control
  2. Planning
  3. Organising
  4. Staffing

Solution:

Question : 47

The art of influencing others to direct their will, abilities and efforts to the achievement of goals is.

  1. Directing
  2. Motivation
  3. Leadership
  4. Staffing

Solution:

Question : 48

The leader who exercises complete control over the subordinates is

  1. Authoritarian Leadership
  2. Democratic Leadership
  3. Free-rein Leadership
  4. None of the above

Solution:

Question : 49

Delegation enables a manager to obtain the specialized knowledge and expertise of _______.

  1. Superior
  2. Subordinates
  3. Peers
  4. None of the above

Solution:

Question : 50

Effective communication is always.

  1. Receiver oriented
  2. Sender oriented
  3. Message oriented
  4. None of the above

Solution:

Question : 51

A thirsty person may use body language by lifting the thumb to face in order to communicate that he needs a glass of drinking water. This process is called:

  1. Medium
  2. Encoding
  3. Decoding
  4. Feedback

Solution:

Question : 52

Labour absenteeism and Labour turnover are reduced in case of

  1. Autocratic Leadership
  2. Democratic Leadership
  3. Free-rein Leadership
  4. None of the above

Solution:

Question : 53

The term ‘Cybernetics’ was coined by

  1. Norbert Weiner
  2. George Terry
  3. Theo Haimann
  4. None of the above

Solution:

Question : 54

Brain Storming is one of the _____ techniques.

  1. Creative
  2. Participative
  3. Heuristic
  4. None of the above

Solution:

Question : 55

Who developed a theory of motivation on the basis of hypotheses relating to human behaviour?

  1. Mc. Gregor’s
  2. J. Stacy Adam’s
  3. Victor Vroom’s
  4. Herzberg

Solution:

Question : 56

Which of the following is not an agency cost?

  1. Residual loss.
  2. Bonding costs.
  3. Concurrent loss
  4. Monitoring costs

Solution:

Question : 57

When communication flows from top to bottom it is called __________.

  1. Horizontal communication
  2. Upward communication
  3. Downward communication
  4. None of the above

Solution:

Question : 58

Leadership Continuum was developed by

  1. Prof. Bernard
  2. Prof. Terry
  3. Tannenbaum and Schmidt
  4. Stephen Robbins

Solution:

Question : 59

Under which Leadership subordinates do not get the guidance and support of the Leader?

  1. Free-rein Leadership
  2. Autocratic Leadership
  3. Participative Leadership
  4. None of the above

Solution:

Question : 60

Selection is a process of rejection and hence it is called a _____ process.

  1. Positive
  2. Negative
  3. Either (a) or (b)
  4. None of the above

Solution:

CMA Foundation Fundamentals of Business Economics and Management Important Question | Dec 25 - 6

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