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