Procurement and Supply Environments - L3M1 Exam Practice Test

Question 1

Under a contract with a price adjustment clause, which of the following would commonly be grounds for price adjustment (depending on the precise contract terms)?

A. Desire by shareholders to have increased profits

B. Exchange rate fluctuations

C. Quality problems brought about by supplier's haste to complete the contract to aid their cashflow

D. Substantially escalating materials costs

Correct Answer: B,D

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Question 2

Monetary policy deals with:

A. Government decisions and actions regarding the balance between taxation revenue and public expenditure

B. Government decisions and actions regarding exchange rates and unemployment in the economy

C. Government decisions and actions regarding the level of interest rates and supply of money in the economy

D. Government decisions and actions regarding the size of banknotes and coins in the economy

Correct Answer: C

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Question 3

A market situation where there is a small number of large suppliers is called:

A. Oligopoly

B. Monopsony

C. Perfect competition

D. Monopoly

Correct Answer: A

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Question 4

Pressure groups which seek to promote a particular issue, such as human rights, the environment; or raise awareness (eg modern slavery); or lobby for legislative change on a particular issue (eg species protection) are called:

A. Causal pressure groups

B. Blood pressure groups

C. Sectional pressure groups

D. Casual pressure groups

Correct Answer: A

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Question 5

Which of the following are widely-used measures of output of a country's economy?

A. GMP

B. GPC

C. GNP

D. GDP

Correct Answer: C,D

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Question 6

A 'genuine pre-estimate of loss' describes:

A. Unliquidated damages

B. A penalty clause

C. Liquidated damages

D. A quantum meruit award

Correct Answer: A

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Question 7

Doing the same with fewer resources is:

A. Efficiency.

B. Efficiency

C. Economy

D.

E. Effectiveness

Correct Answer: B

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Question 8

'The social responsibility of business is profit maximisation' - focusing on returns to shareholders.
This is a famous business philosophy - in contrast to a philosophy of Corporate Social Responsibility as expounded by CIPS.
Which economic and management thinker famously promoted this view?

A. Milton Keynes

B. Milton Friedman

C. John Maynard Keynes

D. John Milton

Correct Answer: B

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Question 9

'In the not-for-profit sector, funding often comes from those who do not benefit directly from the service provision.' True or false?

A. True

B. False

Correct Answer: A

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Question 10

Sources of finance for a public sector entity are primarily (select one):

A. Long-term bank loans

B. Taxpayers

C. Sales revenues

D. Delaying payments to suppliers

Correct Answer: B

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CIPS Procurement and Supply Environments - L3M1 Exam Practice Test

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