- 1. The market where long-term securities are traded is called the ________.
A) Money market
B) Commodity market
C) Labour market
D) Capital market
- 2. Inflation caused by excess demand over supply is known as ________.
A) Creeping inflation
B) Cost-push inflation
C) Deflation
D) Demand-pull inflation
- 3. Tax avoidance refers to ________.
A) Smuggling goods
B) Illegal refusal to pay tax
C) Legal reduction of tax liability
D) Non-payment of customs duty
- 4. Gross National Product (GNP) is GDP plus ________.
A) Tax revenue
B) Government expenditure
C) Depreciation
D) Net income from abroad
- 5. A budget in which revenue equals expenditure is called ________.
A) Deficit budget
B) Balanced budget
C) Surplus budget
D) Supplementary budget
- 6. The desire to hold money in liquid form is known as ________.
A) Liquidity preference
B) Inflation
C) Capital formation
D) Investment
- 7. Which of the following is a source of government revenue?
A) Taxation
B) Budget
C) Deflation
D) Inflation
- 8. Net Domestic Product (NDP) is obtained by subtracting ________ from GDP.
- 9. One advantage of direct taxes is that they are ________.
A) Inflationary
B) Progressive
C) Optional
D) Regressive
- 10. Which institution issues Treasury Bills?
A) Stock Exchange
B) Central Bank
C) Insurance Company
D) Commercial Bank
- 11. Hyperinflation is also called ________.
A) Reflation
B) Runaway inflation
C) Disinflation
D) Deflation
- 12. Per capita income is calculated by dividing national income by the ________.
A) Number of firms
B) Labour force
C) Total population
D) Government revenue
- 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) 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) J.M. Keynes
B) David Ricardo
C) Irving Fisher
D) Adam Smith
- 16. Which method of measuring national income adds wages, rent, interest and profits?
A) Output method
B) Income method
C) Product method
D) Expenditure method
- 17. One reason for imposing taxes is to ________.
A) Raise government revenue
B) Reduce exports
C) Increase inflation
D) Encourage smuggling
- 18. The market where short-term securities are traded is called the ________.
- 19. Deflation refers to a persistent ________.
A) Fall in output
B) Fall in prices
C) Rise 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) Personal tax
B) Consumption
C) Savings
D) Imports
- 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) Trade surplus
C) Tax holiday
D) Deficit budget
- 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) Share
C) Bill of Exchange
D) Call Money Fund
- 27. National income is usually measured over a period of ________.
A) One month
B) One week
C) Ten years
D) One year
- 28. Tax evasion is ________.
A) Voluntary
B) Illegal
C) Constitutional
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) Transfer payment
D) Capital 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) Inflation
B) Recession
C) Unemployment
D) Deflation
- 33. GDP stands for ________.
- 34. The item upon which tax is calculated is called the ________.
A) Tax base
B) Tax rate
C) Tax incidence
D) Tax burden
- 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) Internally and externally
C) Internally only
D) Externally only
- 37. The principle that tax should be easy to understand is called ________.
A) Flexibility
B) Neutrality
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) Climate condition
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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