If government expenditure exceeds revenue, this result in
- A. balanced budget
- B. national debt
- C. budget deficit
- D. budget surplus
The Basic Needs Approach to development is
- A. poverty alleviation
- B. provision of educational infrastructure
- C. provision of health services
- D. improvement in workers income
Cost-push inflation occurs when
- A. production cost is high
- B. factor prices decrease
- C. there is too much money in circulation
- D. government embarks on deficit financing
A manufacturer who wants to build a new plant will source funds from the
- A. commercial banks
- B. money market
- C. capital market
- D. government
The reform in the banking sector in Nigeria is principally motivated by the need to
- A. increase the capital base of banks
- B. provide more money to run the economy
- C. minimize the rate of bank failures
- D. enhance efficiency in bank operations
The ability of commercial banks to create money depends on the
- A. reserve ratio
- B. liquidity ratio
- C. interest rate
- D. capital base
In the circular flow of income, an increase in savings causes
- A. an increase in imports
- B. a decrease in the income stream
- C. an increase in household consumption
- D. a decrease in exports
Double counting is a problem in computing national income when using the
- A. expenditure method
- B. income method
- C. output method
- D. value-added method
In the long run, one of the characteristics of monopolistic competitive firms is that they
- A. make abnormal profits
- B. suffer losses
- C. make normal profits
- D. collude with each other
In developing countries, it is easier to obtain accurate national income estimates through the
- A. GNP
- B. GDP
- C. NDP
- D. NNP
If a monopolist is incurring short-run losses, this means that his
- A. selling price is above the short-run marginal cost
- B. selling price is below the short-run marginal cost
- C. average revenue is greater than marginal revenue
- D. average reveune is less than marginal revenue
The supply curve of a perfectly competitive firm is identical to its
- A. total cost
- B. marginal cost
- C. fixed cost
- D. variable inputs
The shape of the long-run average cost curve is best explained by the
- A. law of diminishing returns
- B. law of returns to scale
- C. cost of fixed inputs
- D. cost of variable inputs
As the level of output increases, the average fixed cost of a firm will
- A. continue to decrease
- B. remain unchanged
- C. continue to increase
- D. be equal to the total cost
Which of the following can be deduced from the law of variable proportions when total output is rising?
- A. MP is greater than AP
- B. MP is less than AP
- C. MP is equal to AP
- D. MP is equal to zero
Production takes place when
- A. output is transformed into input
- B. machines replace human effort
- C. input is transformed into output
- D. there is specialization and division of labour
In a regulated market, price is determined by
- A. consumers
- B. producers
- C. auction
- D. government
A decrease in supply without a corresponding change in demand will lead to
- A. an increase in equilibrium price and a decrease in equilibrium quantity
- B. a decrease in equilibrium price and an increase in equilibrium qantity
- C. a decrease in equilibrium price and equilibrium quantity
- D. an increase in equilibrium price and quantity
If the price of an item changes by 8% and quantity supplied changes from 600 units to 660 units, the price elasticity of supply is
- A. 0.80
- B. 1.25
- C. 2.00
- D. 10.00
The short-run supply curve for medical doctors is more likely to be
- A. perfectly elastic
- B. perfectly inelastic
- C. fairly inelastic
- D. fairly elastic
A supply curve is positively sloped because
- A. supply always exceeds demand
- B. demand always exceeds supply
- C. price is an incentive to consumers
- D. price is an incentive to producers