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