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3RD TERM ECONOMICS SS2
Contributed by: Onosue
  • 1. The market where long-term securities are traded is called the ________.
A) Money market
B) Capital market
C) Commodity market
D) Labour market
  • 2. Inflation caused by excess demand over supply is known as ________.
A) Creeping inflation
B) Deflation
C) Demand-pull inflation
D) Cost-push inflation
  • 3. Tax avoidance refers to ________.
A) Illegal refusal to pay tax
B) Legal reduction of tax liability
C) Non-payment of customs duty
D) Smuggling goods
  • 4. Gross National Product (GNP) is GDP plus ________.
A) Government expenditure
B) Net income from abroad
C) Tax revenue
D) Depreciation
  • 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) Investment
B) Inflation
C) Liquidity preference
D) Capital formation
  • 7. Which of the following is a source of government revenue?
A) Deflation
B) Taxation
C) Budget
D) Inflation
  • 8. Net Domestic Product (NDP) is obtained by subtracting ________ from GDP.
  • 9. One advantage of direct taxes is that they are ________.
A) Progressive
B) Optional
C) Regressive
D) Inflationary
  • 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) Runaway inflation
C) Disinflation
D) Reflation
  • 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) Excise duty
B) Import duty
C) Direct tax
D) Purchase tax
  • 14. A deficit budget occurs when ________.
A) Expenditure exceeds revenue
B) Revenue equals expenditure
C) Revenue exceeds expenditure
D) Revenue is zero
  • 15. The quantity theory of money was propounded by ________.
A) J.M. Keynes
B) David Ricardo
C) Adam Smith
D) Irving Fisher
  • 16. Which method of measuring national income adds wages, rent, interest and profits?
A) Income method
B) Product method
C) Output method
D) Expenditure 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 prices
B) Fall in output
C) Rise in prices
D) Rise in wages
  • 20. Which of the following is an example of recurrent expenditure?
A) Building roads
B) Purchase of machinery
C) Construction of bridges
D) Payment of salaries
  • 21. In the equation MV = PT, V stands for ________.
  • 22. Disposable income equals personal income minus ________.
A) Savings
B) Consumption
C) Personal tax
D) Imports
  • 23. The principle of taxation which requires fairness is called ________.
  • 24. One major reason government borrows money is to finance a ________.
A) Deficit budget
B) Budget surplus
C) Trade surplus
D) Tax holiday
  • 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) Treasury Bill
D) Call Money Fund
  • 27. National income is usually measured over a period of ________.
A) One year
B) One week
C) Ten years
D) One month
  • 28. Tax evasion is ________.
A) Voluntary
B) Constitutional
C) Illegal
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) Revenue expenditure
B) Recurrent expenditure
C) Capital expenditure
D) Transfer payment
  • 31. Which of the following is an instrument of the money market?
A) Treasury Bill
B) Bond
C) Share
D) Debenture
  • 32. A budget surplus is desirable during periods of ________.
A) Unemployment
B) Inflation
C) Recession
D) Deflation
  • 33. GDP stands for ________.
  • 34. The item upon which tax is calculated is called the ________.
A) Tax burden
B) Tax rate
C) Tax incidence
D) Tax base
  • 35. Which of the following is a cause of inflation?
A) Excessive bank lending
B) High savings
C) Budget surplus
D) Reduced demand
  • 36. National debt refers to debts owed by the government ________.
A) By companies only
B) Internally only
C) Internally and externally
D) Externally only
  • 37. The principle that tax should be easy to understand is called ________.
A) Convenience
B) Neutrality
C) Flexibility
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) Growth rate of the economy
B) Religious composition
C) Climate condition
D) Political party strength
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