All 50 questions from the General Certificate of Education (GCE) Commerce 2023 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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The term for buying and selling products through network digital devices is (a) e-commerce (b) tele-commerce (c) trade by barter (d) m-commerce
M-commerce (mobile commerce) is a subset of e-commerce that specifically refers to buying and selling using mobile devices, via mobile websites, apps and SMS.
Land, labour, capital and entrepreneurship are collectively known as (a) factors of production (b) means of exchange (c) economic resources (d) inputs of production
Factors of production are the resources used to produce goods and services; the four traditional factors are land, labour, capital and entrepreneurship.
The three main sectors of the economy are (a) primary, secondary and tertiary (b) manufacturing, trading and service (c) industrial, commercial and service (d) production, distribution and exchange
The three main sectors of the economy are industrial (which produces goods), commercial (which sells goods and services) and service (which provides intangible goods and services).
The reward for the factor of production called capital is (a) rent (b) wages (c) interest (d) profit
Interest is the payment made by borrowers to lenders for the use of their money; it is the reward for capital, the opportunity cost of money that could have been invested elsewhere.
The document that states the internal regulations of a company is the (a) Memorandum of Association (b) Certificate of Incorporation (c) Prospectus (d) Articles of Association
The Articles of Association is the legal document that defines a company's internal management rules, purpose and structure.
A business that obtains capital by selling shares to the public is called a (a) sole proprietorship (b) partnership (c) corporation (d) cooperative
A corporation is a legal entity separate from its owners that raises capital by selling shares of ownership to investors; owners are not personally liable for its debts.
One importance of money is that it (a) serves as a store of value only (b) provides a common measure of value (c) eliminates the need for trade (d) increases the value of goods
Without money there is no common way to measure the value of goods and services, making it difficult to determine the relative value of items being exchanged.
A partnership is automatically dissolved by the (a) retirement of a partner (b) death of a partner (c) admission of a new partner (d) sale of partnership assets
The death of a partner automatically dissolves a partnership, unless the partnership agreement provides otherwise.
Share capital contributed by members of a cooperative society is a type of (a) equity capital (b) loan capital (c) debenture capital (d) reserve capital
Members of a cooperative society contribute share capital to the society, which is a form of equity capital, meaning members own a share of the society and its profits.
Which of the following is an extractive industry? (a) mining (b) barbing (c) construction (d) manufacturing
Extractive industries remove raw materials from the earth; this includes mining, drilling and logging. Barbing (adding barbs to a hook) is not an extractive industry.
The excess of total assets over total liabilities of a business is known as (a) working capital (b) gross profit (c) net worth (d) net income
Net worth (owner's equity) is calculated by subtracting total liabilities from total assets.
A voluntary association of business people from different lines of business, formed to promote their common interests, is called a (a) trade association (b) cooperative society (c) stock exchange (d) chamber of commerce
A chamber of commerce is a non-profit organisation of businesses (not necessarily in the same line) formed to promote the interests of businesses in a community or region.
A corporation whose shares are sold to a select group of investors, such as family members or venture capitalists, is called a (a) public corporation (b) statutory corporation (c) private corporation (d) cooperative corporation
Private corporations sell their shares to a select group of investors such as family, friends or venture capitalists, rather than the general public through a stock exchange.
Professionals who specialize in arranging the movement of goods across international borders and handle documentation for a specific supplier are called (a) wholesalers (b) retailers (c) commission agents (d) clearing and forwarding agents
Clearing and forwarding agents specialise in arranging the movement of goods across borders for businesses, working with certain suppliers to sell products from multiple stores.
An association formed to protect and promote the interests of consumers is called a (a) consumers' association (b) trade union (c) chamber of commerce (d) cooperative society
A consumers' association represents the interests of consumers, working to improve the quality of goods and services and lobbying government for consumer-protection policies.
A business that sells goods or services from a vehicle is called a (a) chain store (b) mobile shop (c) department store (d) hypermarket
A mobile shop uses specially adapted vehicles to sell a limited range of goods, moving from place to place to reach consumers directly.
Deliberately raising the official value of a country's currency relative to other currencies is called (a) devaluation (b) inflation (c) deflation (d) revaluation
Revaluation is a deliberate act by a government to raise the official value of its currency, which can reduce exports and make imports cheaper.
A charge paid to a carrier for delay in loading or unloading goods at a port is called (a) freight (b) demurrage (c) insurance premium (d) tariff
Demurrage is a charge paid to a carrier for delaying the loading or unloading of goods at a port, usually calculated on a daily basis.
A key factor to consider when selecting a means of transporting fresh fish is (a) cost only (b) the nature of the goods (c) distance only (d) government policy
Fish are perishable, so the means of transport chosen must maintain a cold chain and preserve freshness — the nature of the goods is the key factor.
The financial institution responsible for researching the economy and identifying obstacles to growth is the (a) commercial bank (b) central bank (c) merchant bank (d) development bank
The central bank is responsible for the overall health of the economy; it conducts monetary policy and researches the economy to identify and address problems.
Making people aware of a product or service in order to increase sales is the main function of (a) advertising (b) market research (c) sales promotion (d) branding
Advertising increases brand awareness by informing people about a product or service, which can lead to more people trying it and increased sales.
The process of collecting and analysing information about a market to make informed decisions about a product is (a) advertising (b) market research (c) product development (d) distribution
Market research is the systematic process of gathering and analysing data about a market to guide decisions on a product or service.
Items imported into a country are cleared and taxed by (a) the central bank (b) the Ministry of Trade (c) Customs and Excise authorities (d) the chamber of commerce
Customs and Excise authorities are responsible for managing ports, collecting import/export duties, and clearing goods entering or leaving the country.
Consumers have access to a variety of the activities of the (a) advertising agencies (b) wholesalers (c) retail (d) mass media
The mass media provides consumers access to a variety of information about goods and services from different providers.
The rate of growth of a population is the difference between (a) birth rate and death rate (b) birth rate less death rate plus net migration (c) initial population plus number of births (d) number of immigrants plus number of births
Population growth rate = birth rate minus death rate, adjusted for net migration (immigrants minus emigrants).
Government-imposed trade barriers that prohibit the import or export of certain goods for a variety of reasons are called (a) tariffs (b) quotas (c) embargoes (d) subsidies
An embargo is a government-imposed ban that prohibits the import or export of certain goods to or from a particular country, often for political or security reasons.
A document sent by a buyer to a seller providing information about goods or services wanted, but not an actual order, is a (a) purchase order (b) proforma invoice (c) quotation (d) letter of enquiry
A letter of enquiry is sent by a prospective buyer to a seller to obtain information such as price, quality and terms of trade before an actual order is placed.
The deliberate act by a government of lowering the value of its currency relative to other currencies, in order to boost exports and make imports more expensive, is called (a) revaluation (b) appreciation (c) devaluation (d) inflation
Devaluation is the official lowering of a country's currency value relative to other currencies. It is used to boost exports and make imports more expensive, improving the balance of trade.
When more than one commodity is jointly produced or supplied from the same source, an increase in the supply of one leads to an increase in the supply of the others. This is known as (a) composite supply (b) joint supply (c) complementary supply (d) derived supply
Joint supply occurs when two or more products are produced from the same source (e.g. petrol and kerosene from crude oil), so an increase in one increases the supply of the others.
Public companies are required to publish their final accounts and file returns on the stock exchange mainly to (a) attract more customers (b) protect the interests of shareholders and the public (c) reduce competition (d) avoid paying tax
Public companies must publish accounts and file with the stock exchange as a legal requirement, providing transparency that protects shareholders, creditors and the investing public.
Private companies are not required to publish their final accounts to the public mainly because (a) they are exempt from taxation (b) they are not incorporated (c) they do not sell shares to the public (d) they have no shareholders
Private companies raise capital from a small, select group of investors rather than the general public, so they are not required to publish accounts as widely as public companies.
A wholesaler who buys directly from the producer and sells to retailers performs the function of (a) bulk-breaking (b) advertising (c) manufacturing (d) exporting
Wholesalers buy goods in large quantities from producers and break them into smaller quantities (bulk-breaking) for sale to retailers.
A ship designed specifically to transport liquids or gases in bulk is called a (a) container ship (b) tanker (c) trawler (d) bulk carrier
Tankers are ships with large tanks designed to carry liquids or gases such as crude oil, petroleum products or liquefied gas.
All the following are elements of a valid contract except (a) offer (b) acceptance (c) consideration (d) performance
The elements of a valid contract are offer, acceptance, consideration, capacity and legality. Performance is the act of fulfilling a contract's obligations, which happens after a contract is already formed, so it is not an element of forming one.
All of the following are elements of a valid contract except (a) capacity (b) legality (c) breach (d) consideration
Breach is the failure to perform the obligations under a contract; it is something that can happen after a contract is formed and is not itself an element of a valid contract.
Sorting and grading goods, provision of price lists and terms, and the granting of discounts are all part of the (a) after-sales service (b) advertising process (c) sales process (d) manufacturing process
Sorting and grading goods, price listing and offering discounts are part of the sales process, not after-sales service.
Advertising that compares a company's products directly with those of its competitors, to persuade consumers to buy its products instead, is called (a) informative advertising (b) persuasive advertising (c) competitive advertising (d) institutional advertising
Competitive advertising directly compares a company's products with competitors' products to persuade consumers to prefer its own brand.
Brand names and trademarks are legally protected intellectual property mainly because they (a) increase production costs (b) give the owner the exclusive right to use them, preventing imitation by competitors (c) reduce the price of goods (d) are required for export only
Brand names and trademarks are intellectual property that give the owner the exclusive right to use them for specific goods or services, preventing other businesses from copying and selling as their own.
Consideration in a contract of sale refers to (a) the item exchanged for value between the parties, such as the price for goods (b) the buyer's signature (c) the date of the contract (d) the location where the contract was signed
Consideration is something of value exchanged between the parties to a contract; in a contract of sale, the price is the buyer's consideration and the goods are the seller's.
Income inequality in many countries can be worsened by privatization mainly because it can (a) reduce the wealth of the government (b) transfer wealth from the public sector to a small number of private individuals or organizations (c) increase the supply of goods (d) reduce unemployment
Privatization can exacerbate income inequality by transferring wealth from the public sector to private individuals or organisations, concentrating wealth among a smaller group.
The use of brand names and trademarks is to (a) control the supply of goods (b) make after-sales service possible (c) prevent imitation by competitors (d) stabilize the prices of goods
Brand names and trademarks give owners the exclusive right to use them, preventing competitors from copying and selling products or services using the same name or mark.
A disadvantage of privatization is that (a) there is decline in the supply of goods (b) there is less efficiency in the production of goods (c) public interest outweighs the profit motive (d) income is unevenly distributed
A key disadvantage of privatization is that it can worsen income inequality, as wealth becomes concentrated in the hands of a small number of private owners.
Operating a state owned enterprise with the intention of making more profit is (a) commercialization (b) deregulation (c) nationalization (d) privatization
Commercialization is the process of transforming a state-owned enterprise into a profit-making entity, giving it more autonomy and introducing competition.
The department that ensures that products are made available to the consumer is (a) finance (b) production (c) marketing (d) purchases
Marketing covers the creation, communication, delivery and exchange of offerings, ensuring products reach and are made available to consumers.
Which of the following is not a form of sales promotion? (a) free samples (b) demonstrations (c) cash on delivery (d) buy one get one free
Cash on delivery is a payment method, not a form of sales promotion; free samples, demonstrations, and buy-one-get-one-free are all promotional strategies used to increase sales.
Divesting government interest in a business to the public is (a) privatization (b) nationalization (c) deregulation (d) commercialization
Privatization is the process of transferring ownership of a business or industry from the government to private individuals or organizations.
The management function that is concerned with coordinating business resources efficiently is (a) controlling (b) motivation (c) planning (d) organizing
Organizing is the process of assigning tasks, allocating resources and establishing relationships within an organization to ensure resources are used efficiently.
An organizational chart is used to (a) determine the departmental objectives and targets (b) implement policies on staff welfare (c) measure variation on staff performance (d) show the hierarchy of staff
An organizational chart is a visual representation of the hierarchy of staff within an organization, showing organizational levels and reporting relationships.
Which of the following countries is not a member of the European Union? (a) Bolivia (b) Denmark (c) France (d) Greece
Bolivia is a South American country and is not a member of the European Union, which is a political and economic union of European member states.
One of the aims of ECOWAS is to (a) encourage foreign investments (b) ensure production of quality goods (c) improve transportation and communication (d) promote privatization policies
One way ECOWAS pursues economic integration and cooperation among member states is by encouraging foreign investment, which boosts growth, jobs and technology transfer.
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