Deflation is a persistent fall in the general price level and is usually caused by?
- A. a reduction in total demand
- B. an increase in government spending
- C. an increase in the money supply
- D. an increase in aggregate demand
The most important economic characteristic differentiating commercial banks from other financial institutions is their?
- A. function as a safe and profitable store place for savings
- B. role in financing balance of payment deficits
- C. status as an intermediary between savers and borrowers
- D. ability to create and destory money
Given that the cash reserve ratio is 10 percent, what is the maximum amount of that the banking system can create from an initial cash deposit of N1,000.00?
- A. N100.00
- B. N1,000.00
- C. N9,000.00
- D. N10,000.00
Gresham’s law in economics shows that
- A. bad money drives good money out of circulation
- B. good money drives bad money out of circulation
- C. gold must be available to maintain the value of paper money
- D. the price level varies directly with the quality of money
Which of the following is used by the Central Bank to control the rate of interest?
- A. Bill of Exchange
- B. Banker's order
- C. Fixed deposit account
- D. Open market operation
To control inflation, the monetary authorities of a country can?
- A. reduce taxes
- B. advise government to increase its expenditure
- C. engage in expansive monetary policy
- D. engage inrestrictive monetary policy
The Nigeria Bank for Commerce and Industry is?
- A. a commercial Bank
- B. a developmment bank
- C. an industrial bank
- D. a merchant bank
Which of the following advantages of localization of industries may also be a disadvantage?
- A. External economies
- B. Concentration of industries and of people
- C. Development of organized markets
- D. Reduced costs of research
Which of the following is an external economy derived by a firm?
- A. Low cost opportunities enjoyed by being in a place where other producers concentrate
- B. Technical economics enjoyed by varying the factors of production
- C. Economics of management by putting administrators where the are most efficient
- D. marketing advantages attained through preferential treatment in the purchase and distribution of produce
One of the advantages of a partnership over a sole proprietorship is that?
- A. it is the most popular form of business organization
- B. the patern can easy withdraw from business
- C. it makes an increase in the capital of the business possible
- D. there is no limit to the number of people who may bring in capital
Which of the following is a characteristic of private limited liability company?
- A. its shares can be sold to the public
- B. the number of shareholders ranges from fifty to one hundred
- C. all shareholders have equal powers and responsibilities
- D. the number of shareholders ranges from two to fifty
In a public company, shares are?
- A. sold to one person only
- B. distributed freely
- C. advertised to members of the public for subscription
- D. disposed by the Chief Executive
The most important advantage of co-operative societies is?
- A. their high degree of democracy
- B. the increase inthe cost of marketing
- C. that member are encouraged to save money
- D. the possibility of raising loans for the members
In the normal channels of distribution the breaking of bulk is performed by the
- A. producer
- B. wholesaler
- C. retailer
- D. consumer
A monopolist will practice price discrimination in two markets if?
- A. the cost of separating the markets is large
- B. the markets have different elasticities of demand
- C. there is free flow of information in the two markets
- D. there is a patent of the commodity
A producer sustains a loss in the short run if
- A. marfinal revenue is less than price
- B. price is less than average cost
- C. average variable cost is less than average cost
- D. marginal cost is less than marginal revenue
One major difference between monopoly and perfect competition is that?
- A. the perfect competitor is a price taker while the monopolist determines his own output
- B. homogeneity of purpose exists for the perfect competitor while non-homogeneity of purpose exist for the monopolist
- C. sellers are located all over the world in the perfect competition but sellers are only in one country in the case of the monopolist
- D. there is free entry and exist in perfect competition but no free exist in monopoly
Which of the following is an important function of prices in a market economy?
- A. Ensuring that resources are used in the most efficient manner
- B. Ensuring an equitable distribution of goods and services
- C. Ensuring that all industries are perfectly competitive in the long run
- D. Equating level of purchases with level of needs
The revenue accruing to the seller of commodity X as a result of a fall in price will
- A. increase `
- B. fall
- C. first fall but will increase later
- D. remain unchanged
Use the table below to answer question 17 and 18.
Market Demand Schedule for Commodity X. \(\begin{array}{c|c}
\text{ Price N} & \text{Quantity(Million units)} \\ 60 & 100 \\
50 & 140 \\
40 & 220 \\
30 & 260 \\
20 & 300 \\
10 & 340 \\
\end{array}\)
If the price of commodity X falls from N40.00 to N30.00 what is the price elasticity of demand?
- A. 0.62
- B. 0.73
- C. 1.00
- D. 1.50
The main function of price mechanism is to?
- A. limit consumer demand
- B. enable producers make profit
- C. allocate scarce resources among competing ends
- D. ensure consumer sovereignty