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