- 1. The market where long-term securities are traded is called the ________.
A) Capital market
B) Money market
C) Commodity market
D) Labour market
- 2. Inflation caused by excess demand over supply is known as ________.
A) Demand-pull inflation
B) Creeping inflation
C) Deflation
D) Cost-push inflation
- 3. Tax avoidance refers to ________.
A) Non-payment of customs duty
B) Legal reduction of tax liability
C) Illegal refusal to pay tax
D) Smuggling goods
- 4. Gross National Product (GNP) is GDP plus ________.
A) Net income from abroad
B) Depreciation
C) Tax revenue
D) Government expenditure
- 5. A budget in which revenue equals expenditure is called ________.
A) Supplementary budget
B) Surplus budget
C) Deficit budget
D) Balanced budget
- 6. The desire to hold money in liquid form is known as ________.
A) Liquidity preference
B) Inflation
C) Investment
D) Capital formation
- 7. Which of the following is a source of government revenue?
A) Budget
B) Deflation
C) Inflation
D) Taxation
- 8. Net Domestic Product (NDP) is obtained by subtracting ________ from GDP.
- 9. One advantage of direct taxes is that they are ________.
A) Optional
B) Inflationary
C) Regressive
D) Progressive
- 10. Which institution issues Treasury Bills?
A) Commercial Bank
B) Stock Exchange
C) Central Bank
D) Insurance Company
- 11. Hyperinflation is also called ________.
A) Deflation
B) Reflation
C) Disinflation
D) Runaway inflation
- 12. Per capita income is calculated by dividing national income by the ________.
A) Number of firms
B) Labour force
C) Government revenue
D) Total population
- 13. A tax levied directly on personal income is known as ________.
A) Purchase tax
B) Direct tax
C) Excise duty
D) Import duty
- 14. A deficit budget occurs when ________.
A) Expenditure exceeds revenue
B) Revenue equals expenditure
C) Revenue is zero
D) Revenue exceeds expenditure
- 15. The quantity theory of money was propounded by ________.
A) Irving Fisher
B) Adam Smith
C) David Ricardo
D) J.M. Keynes
- 16. Which method of measuring national income adds wages, rent, interest and profits?
A) Income method
B) Product method
C) Expenditure method
D) Output method
- 17. One reason for imposing taxes is to ________.
A) Encourage smuggling
B) Raise government revenue
C) Reduce exports
D) Increase inflation
- 18. The market where short-term securities are traded is called the ________.
- 19. Deflation refers to a persistent ________.
A) Rise in prices
B) Fall in output
C) Fall in prices
D) Rise in wages
- 20. Which of the following is an example of recurrent expenditure?
A) Payment of salaries
B) Purchase of machinery
C) Building roads
D) Construction of bridges
- 21. In the equation MV = PT, V stands for ________.
- 22. Disposable income equals personal income minus ________.
A) Imports
B) Savings
C) Personal tax
D) Consumption
- 23. The principle of taxation which requires fairness is called ________.
- 24. One major reason government borrows money is to finance a ________.
A) Tax holiday
B) Deficit budget
C) Budget surplus
D) Trade surplus
- 25. Inflation reduces the ________ of money.
A) Circulation
B) Purchasing power
C) Quantity
D) Supply
- 26. Which of the following is a security traded in the capital market?
A) Treasury Bill
B) Bill of Exchange
C) Call Money Fund
D) Share
- 27. National income is usually measured over a period of ________.
A) One year
B) One week
C) One month
D) Ten years
- 28. Tax evasion is ________.
A) Voluntary
B) Illegal
C) Legal
D) Constitutional
- 29. Which type of inflation is characterized by a slow but steady rise in prices?
- 30. Government expenditure on roads and bridges is known as ________.
A) Revenue expenditure
B) Transfer payment
C) Capital expenditure
D) Recurrent expenditure
- 31. Which of the following is an instrument of the money market?
A) Bond
B) Share
C) Treasury Bill
D) Debenture
- 32. A budget surplus is desirable during periods of ________.
A) Deflation
B) Unemployment
C) Inflation
D) Recession
- 33. GDP stands for ________.
- 34. The item upon which tax is calculated is called the ________.
A) Tax burden
B) Tax incidence
C) Tax rate
D) Tax base
- 35. Which of the following is a cause of inflation?
A) Reduced demand
B) Excessive bank lending
C) High savings
D) Budget surplus
- 36. National debt refers to debts owed by the government ________.
A) By companies only
B) Externally only
C) Internally only
D) Internally and externally
- 37. The principle that tax should be easy to understand is called ________.
A) Neutrality
B) Flexibility
C) Convenience
D) Simplicity
- 38. Holding money for unforeseen emergencies is known as the ________ motive.
- 39. One reason for measuring national income is to determine the ________.
A) Religious composition
B) Climate condition
C) Growth rate of the economy
D) Political party strength
- 40. Given that price of a Radio set in 2010 was N338, but rose to N362 in 2011. Calculate the price index of the radio in percentage.
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