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