Economic SS 2 Third Term Examination

THIRD TERM

Examination malpractices may lead to a repeat of the subject or suspensions don’t be involved.   

Subject: ECONOMICS           

Class: SS 2

DURATION ; 2Hrs

1. Economics is regarded as a science because it (a) studies laws that governs human behaviors  (b) uses scientific method to explain human behavior (c) makes use of controlled experiments to explain human behavior (d) makes use of machines to study human behavior
2. Government revenue will increase if taxes are levied on goods with (a)  perfectly elastic demand  (b) fairly elastic demand (c) perfectly inelastic demand (d) unitary elastic demand
3. All the following are methods of determining prices except (a)maximum pricing (b) rationing (c) minimum pricing (d) auctioning 
4. When the demand for foreign exchange exceeds its supply, the value of the domestic currency  (a) appreciates (b) depreciates (c) remains unchanged (d) expands
5. General rise in the price level induced by increased price of inputs is referred to as (a) run-away inflation (b) cost-push inflation (c) demand-pull inflation (d) imported inflation 
6. A  budget is balanced when expected total revenue is  (a) greater than expected expenditure (b) less than total expenditure (c) equal to total expenditure (d) greater than total expenditure
7. The value of money is affected by the  (a) speculative motive (b) price level (c) precautionary motive (d)intervention of development banks 
8. The difference between the Gross Domestic Product (GDP) and Gross National Product (GNP) is (a) depreciation (b) transfer payment (c) net income from abroad (d) direct taxes
9. In National Income accounting ,the  term Net is used to indicate that a value (a) includes incomes of foreigners (b) excludes incomer of citizens (c) includes depreciation (d) excludes depreciation 
10. The main item traded on a Stock Exchange Market is  (a) treasury bills (b) travellers’ cheques (c) foreign currencies (d) new shares  
11. Precautionary motive for holding money is to  (a) meet daily and regular transactions (b) take advantage of changes in the prices of goods and services (c) cover unforeseen events (d) cover expenses on house rent
12. The proportion of commercial banks’ total assets kept in the form of highly liquid Assets is known as (a) demand deposit (b) fixed deposit (c) cash ratio (d) moral suasion 
13. In order to control inflation ,the government should  (a) reduce the cost of borrowing (b) buy securities in the open market (c) adopt restrictive monetary policy (d) discourage savings.
14. Disposable income is the income earned  (a) by the nationals of a country resident within the country (b) from productive activities of nationals of a country both at home and abroad  (c) when personal income tax is deducted from personal income (d) when the gross income of an individual is added to person income tax 
15. Which of the following is not a recurrent expenditure? (a) building of schools and colleges (b) maintenance of school buildings (c) payment of teachers’ salaries (d) purchase of stationary for examinations 
16. A situation in which the estimated government revenue is less than the proposed expenditure for a given year can be described as  (a) surplus budgeting (b) supplementary budgeting (c) balance budgeting (d) deficit budgeting 
17. Which of the following best defines inflation? (a) cyclical increase in prices (b) periodic increase in prices (c) persistent increase in prices (d) occasional increase in prices 
18. Which of the following functions of money is mostly affected during inflation? (a) medium of exchange (b) unit of account (c) store of value (d) standard of deferred payment
19. Which of the following cannot be described as Land? (a) Forest (b) diamond (c) roads (d) crude oil.  
20. Why would an individual increase his level of consumption during inflationary period? (a) the real value of any amount saved falls overtime (b) interest rate are generally low (c) there are varieties of goods to buy (d) wages and salaries stagnates during inflation
21. National Income is used to measure (a) a country’s population size (b) a country’s economic growth (c) the human level of development (d) the flow of imports to a country.
22.  Scarcity implies that (a) goods cannot be produced efficiently (b) human wants are unlimited (c) goods and services are limited (d) commodities are evenly distributed within the economy. 
23.  Mono-product economics are those that produce (a) only international products (b) petroleum products (c) agricultural  products (d) one main commodity
24. The profit of a producer is the difference between  (a) total cost and margin cost (b) total revenue and total cost (c) average cost and total cost (d) price and total cost
25. Money will serve as a standard of deferred payment if it is  (a) homogeneous (b) durable (c) easily recognized (d) stable in value
26. The National income is the  (a) Gross Domestic Product at market prices (b) Gross National Product at factor cost (c) Net National product at factor cost (d) Net National Product at market prices 
27. When depreciation is deducted from Gross National Product, the result is (a) total national income (b) gross domestic product (c) net national product (d) net domestic product
28. Human wants are unlimited because   (A) Production is inadequate  (B) resources have alternative uses  (C) new wants always arise  (D) resources are limited
29. The demand for money is  described as a (a) competitive demand (b) joint demand (c) derived demand (d) composite demand
30. Which of the following is involved in the money market? (a) building society (b) development banks (c) commercial banks (d) stock exchange
31. Demand pull inflation can aptly be described as a (a) inflation induced by rising costs of production of production (b) reduction in government expenditure (c) persistent rise in prices due to increase in expenditure (d) massive importation of goods from a country with hyperinflation 
32. A basic economic problem of any society is  (A) High level of illiteracy  (B) irregular power supply  (C) population growth  (D) resource allocation
33. State owned enterprises are more common in   (A)  centrally planned economies  (B) mixed economies  (C) capitalist economies  (D) developed economies
34. A normal supply curve has a positive slope which indicates that  (A) sellers are willing to sell more at a lower price  (B) sellers are indifferent to price  (C) sellers are willing to sell more at a higher price  (D) there is always a fixed supply 
35. In a centrally planned economy, what to produce is  (A) determined by the forces of demand and supply.  (B) Driven by profit motive.  (C) Determined by consumers.  (D) the responsibility of state’s bureaucrats
36. Which of the following is related to resource allocation in an economy?  (A) How to produce  (B) What to produce  (C) For whom to produce (D) Efficient use of inputs
37. Which of the following is not a feature of socialism?  (A) Collective ownership of productive resources   (B) Freedom of enterprise  (C) Production is not based on the profit motive  (D) Maximization of public welfare
38. Households make economic decisions because they want to  (A) make more profit   (B) increase their salaries and wages  (C) increase their purchases  (D) maximize their satisfaction
39. Which of the following functions of money is mostly affected during inflation?  (A) Medium of exchange  (B) Unit of Account  (C) Store of value  (D) Standard of deferred payment 
40. A shift in the demand curve indicates  (A) exceptional demand  (B) change in demand  (C) change in quantity demanded  (D) elasticity of demand
41. Precautionary motive for holding money is to  (A) meet daily and regular transactions  (B) take advantage of changes in the prices of goods and services  (C) cover unforeseen events  (D) cover expenses on house rent
42. Which of the following measures will not encourage industrialization in West Africa?  (A) Taking over of all forms of industries by the government (B) Provision of social infrastructure  (C) Giving tax incentives, especially to infant industries  (D) Using tariffs to discourage the use of imported items.
43. Goods which have to be paid for are known as  (A) physical goods  (B) economic goods  (C) free goods  (D) intangible goods.
44. If a 6% decrease in price results in more than 6% decrease in quantity supplied, supply can be regarded as  (A) elastic  (B) unitary elastic  (C) Perfectly inelastic           (D) perfectly elastic 
45. A condition for consumer utility maximization is  (A) equality of the ratio of marginal utilities and ration of prices.  (B) equality of the ratio of average utilities and the ratio of prices  (C) equality of the marginal utility to total utility ratio for both commodities  (D) total utility and marginal utility must be Zero
46. Which of the following best describes the mode?  The (A) observation with the highest frequency  (B) average of two middle numbers  (C) item that occupies the middle position  (D) difference of two extreme values
47. Given the demand function; Qd = 20 – 1/2 p.  What is Qd, when p is $12?.  (A) 6 units  (B) 10 units  (C) 12 units  (D) 14 units
48. Households make economic decisions because they want to  (A)  make more profit  (B) Increase their salaries and wages  (C) increase their purchases  (D) maximize their satisfaction
49. A normal supply curve has a positive slope which indicates that  (A) sellers are willing to sell more at a lower price  (B) sellers are indifferent to prices  (C) sellers are willing to sell more at a higher price  (D) there is always a fixed supply.
50. The components of a three-sector economy are  (A) banks, Schools and hospitals  (B) workers, producers and marketers  (C) households, firms and the government  (D) producers, retailers and wholesalers

2017 ECONOMICS 2 THEORY QUESTIONS

ESSAY-SECTION A

Answer one question only from this section 

1. The following data shows the budget of a hypothetical country in 2006. Study the data and answer the questions that follow. 

1. How many revenue was realized from?

1. Direct tax
2. Indirect tax

1.  Calculate the total:

1. Recurrent expenditure 
2. Capital expenditure 

1. What percentage of total revenue was collected as indirect tax?
2. State two examples of non-tax revenue 
3. What was the budget surplus of deficit? Explain your answer.

1.  The table below shows the incomes and rates of income tax levied on four professionals in an economy.

Use the above data to answer the questions that follows

1. Calculate the disposable incomes of the four individuals. (b) what system of taxation was employed ? (c) Give reasons for your answers in 2(b). 

(d) with the aid of a diagram, explain the system of taxation employed in 2(b).

SECTION B

Answer two questions only from this section.

3     a. what is a tax? 

1. Briefly outline the principles of taxation and give reasons why Nigerians are taxed.    
2. Explain each of the following types of taxes ; (i) Proportional tax (ii) Progressive tax (iii) Regressive tax
3. outline the difficulties encountered by tax collectors in Nigeria. 

4     (a) Explain the functions of Stock Exchange. 

(b) Write short note on the following: (i) The money Market (ii) the capital market

(c)     What is meant by National Income?

What are the problems involved in the measurement of National Income

(d)    Write short note on the following (i) Gross National Product [GNP] (ii) Gross Domestic Product [GDP] (iii) Net National Product [NNP] (iv) Per Capita Income (iv) Disposable Income

1. Open inflation 

5    (a) what is meant by Demand for money?

    (b) What are the motives behind the demand for money?

    (c) What is meant by the value of money?

    (d) What factors bring about the changes in the value of money? 

6     (a) what is inflation? And how does it affect the value of money? 

    (b) What are the positive and negative effects of inflation on an economy? 

    (c) Write notes on the following 

1. Demand-pull inflation 
2. Disinflation

    iii. Cost-pull inflation 

1. Reflation