ECONOMICS THIRD TERM EXAMINATION SENIOR SECONDARY SCHOOLS (SS 2) EXAM QUESTIONS

SECTION A – OBJECTIVES

INSTRUCTION – CHOOSE THE CORRECT ANSWER FROM THE OPTIONS A – D.

1. ________ refers to the total amount of money the people in an economy desire to hold

(A) demand for money (B) supply of money

(C) elementary quantity of money

(D) The value of money

 

2. ________ refers to the quantity of goods and services money can buy in an economy.

(A) motive of holding money

(B) demand for money

(C) value of money

(D) Supply of money

 

3. If the marginal propensity to consume is 0.75. What is the value of the multiplier?

(A) 2

(B) 5

(C) 4

(D) 2

 

4. The total quantity of money in circulation in an economy is called ________.

(A) demand for money

(B) supply of money quantity

(C) theory of money

(D ) the motive for holding money

 

Use the equation below to answer question 5 to 9 MV = PT. 

5. The equation above is use to express?

(A) The value of money

(B) The quantity theory of money

(C) The motive of holding money

(D) The demand for money

 

6. In the equation, the letter M represents ________.

(A) the volume of transaction

(B) the total quantity of money

(C) the general price level

(D) the velocity of money circulation

 

7. The letter V stands for ________.

(A) the velocity of circulation

(B) the general price level

(C) the volume of transaction

(D) The quantity of money

 

8. The letter P in the equation represents ________.

(A) the quantity of money

(B) the general price level

(C) the velocity of circulation

(D) The profit of transaction

 

9. The letter T stands for ________.

(A) the volume of transaction

(B) the general price level

(C) the quantity of money

(D) The velocity of circulation

 

10. If the MPC is ₦0.80, what is the multiplier?

(A) 2

(B) 6

(C) 5

(D) 4

 

11. Inflation is likely to benefit ________.

(A) person with bank savings

(B) debtors

(C) creditors

(D) Person employed in financial house

 

12. To control inflation the monetary authorities of a country can ________.

(A) reduce tax

(B) advice government to increase its expenditure

(C) increases tax

(D) apply deficit budget system

 

13. Deflation is the persistent fall in the general price level and it’s generally caused by

(A) a reduction in total demand

(B) an increase in government spending

(C) an increase in aggregate demand

(D) war

 

14. Inflation can be curb by ________.

(A) increasing aggregate demand

(B) paying higher wages

(C) increasing government expenditure

(D) Use of deficit budgetary system

 

15. Inflation caused by increase in price of raw material is known ________.

(A) creeping inflation

(B) demand-pull inflation

(C) hyper inflation

(D) Cost push inflation

 

16. Which of the following is not among the causes of inflation in Nigeria?

(A) Excessive demand for goods and services.

(B) Fall in the supply of essential goods.

(C) Hoarding of goods

(D) Unusual taste for imported goods.

 

17. Which of the following best expresses the national income ?

(A) Y = C + I+ G + X – M

(B) Y = C + I + G + X + M

(C) Y = C + I – G+ X – M

(D) Y =  C I + G + X – M

 

18. The measure of the total value of goods and services produced in a country over a given period is referred to as ________.

(A) gross national product

(B) gross domestic product

(C) net national product

(D) Per capita income

 

19. Net national income is ________.

(A) gross national product minus depreciation

(B) gross domestic product plus net product from abroad

(C) nominal national income deflected by the price level

(D) Net national product minus net business tax

 

20. Which of the following is a reason for government borrowing?

(A) To finance multinational companies

(B) To finance development plans

(C) To reduce population

(D) To protect infant industries

 

21. The system of taxation whereby people pay the same percentage of their income as tax is called ________.

(A) progressive

(B) ad-valorem tax

(C) regressive tax

(D) Proportional tax

 

22. The government of a country gets its income through all the following ways except ________.

(A) direct and indirect tax

(B) borrowing

(C) proceeds from exports

(D) Annual budget

 

23. Incidence of taxation refers to the ________.

(A) amount collected as tax

(B) burden of taxation

(C) category of tax

(D) proportion of a person’s income that is paid as tax

 

24. Which of the following is an attribute of a good tax system?

(A) Regressive

(B) Economical

(C) Oppressive

(D) Uncertainty

 

25. The major items of government budget are ________.

(A) revenue and expenditure

(B) deficit and surplus

(C) domestic and foreign debts

(D) Imports and exports

 

26. Mr. Olsen earns N1000 and pays N100 in tax. Mr. Olu earns N4000 and pays N200 in tax. This tax system can be said to be ________.

(A) competitive

(B) progressive

(C) proportional tax

(D) Regressive tax

 

27. If the marginal propensity to consume is 0.5, what is the multiplier?

(A) 2

(B) 3

(C) 4

(D) 6

 

28. The type of budget in which the estimated revenue of a government is less than her proposed expenditure is called ________.

(A) deficit

(B) additional budget system

(C) surplus

(D) Income and expenditure tax

 

29. If the estimated revenue of the government is more than her proposed expenditure, it is called _______.

(A) deficit budgeting

(B) surplus budgeting

(C) estimated budgeting

(D) Borrowing budget system

 

30. If the MPC is 0.9, the multiplier would be ________.

(A) 4

(B) 5

(C) 2

(D) 10

 

SECTION B – THEORY

INSTRUCTION – ATTEMPT ANY THREE (3) QUESTIONS. QUESTION ONE IS COMPULSORY. 

QUESTION 1

1. Below are rate of tax payment by five professionals for columns X and Y. Use the information contained in the table to answer the questions that follow –

 

a. Calculate the disposable income of 4he professionals in column X and Y respectively.

b. What systems of tax are employed in column X and Y

c. With the aid of diagrams, identify the systems of tax in [ b] above.

 

QUESTION 2

The following data were reported by Banana Republic in ₦ billion –

Gross domestic product – 128

Consumption of fixed capital – 36

Net indirect business taxes – 6

Social insurance contribution – 4

Transfer payment – 8

Net factor income from abroad – 7

Company taxes – 10

Personal taxes – 14

Undistributed profit – 16

Population figure – 5

 

Calculate the following for the economy –

A. Gross national product

B. Net national product

C. National income

D. Personal income

E. Personal disposable income

F. Per capital income

 

QUESTION 3

A. Given that Y = C + I, where C = 50 + 0.75y and I = 45 m, what is the equilibrium level of income?

 

QUESTION 4

A. Define tax.

B. State the two types of tax with explanations.

 

QUESTION 5

A. Define government budget.

b. State the types of government budget with explanations.

 

QUESTION 6

If the marginal propensity to consume is 0.75, by how much will national income increase if government expenditure is increased by ₦8 million?