1. The Average Fixed Cost (AFC) curve falls continuously with increasing output but does not touch the X-axis. This means that the AFC curve is _____
A. U- shaped.
B. upward sloping.
C. asymptotic to the origin.
D. fixed or horizontal.
2. Price ceilings lead to _____
A. shortage of commodity.
B. surplus of commodity.
C. market clearing.
D. excess supply
3. What is the mercantilist view on trade?
A. Maximizing welfarism.
B. Positive balance of trade and balance of payment.
C. That agriculture is the main stay of the economy.
D. Encourages crude oil exploitation.
4. Pricing and output decisions of sellers are highly interdependent on market known as _____
A. Oligopoly.
B. Perfect competition.
C. Monopoly.
D. Monopolistic competition.
5. At the point of profit maximization, MR = MC where _____
A. MR is falling.
B. MR is maximum.
C. AR is falling below MR.
D. MC cuts MR from below.
6. A closed economy is a national economy that _____
A. does not interact economically with the rest of the world.
B. has a stock market that it is not open to traders from outside the country.
C. has extensive trading and financial relationships with other national economies.
D. has not established diplomatic relations with other national economies.
7. Which of the following is an automatic stabilizer?
A. Military spending.
B. Spending on public schools.
C. Unemployment benefit.
D. Increased exchange rate.
8. A major factor affecting the value of money is the _____
A. price level.
B. banking habit.
C. transactionary motive.
D. spending habit of consumers.
9. ECOWAS will enable member countries to achieve _____
A. comparative political advantage over other countries not in the region.
B. a large market for their products.
C. military superiority over countries not in the region.
D. lower the transportation cost of goods within the region.
10. A change in demand for a normal good implies that there is a _____
A. change in quantity demanded as price changes.
B. shift in the demand curve.
C. movement along a given demand curve.
D. change in the price elasticity of demand.
11. Which of the following relationships is the concern of Malthusian theory?
A. Population growth rates of the rich and poor nations.
B. Population density and national income.
C. Population growth rate and natural resources.
D. Age distribution of population.
12. An abnormal supply curve is also known as _____
A. downward sloping supply curve.
B. linear supply curve.
C. regressive supply curve.
D. upward sloping curve.
13. Which of the following determines wage rate in a market setting?
A. Aggregate supply.
B. Price of material used.
C. Output of labour.
D. Market demand and supply of labour.
14. Which of the following is concerned mainly on the types, sources and uses of government income?
A. Public expenditure.
B. Public budget.
C. Public finance.
D. Public revenue.
15. The labour force of a country is best described as the number of people _____
A. receiving pension.
B. within the working age.
C. in paid employment.
D. within the retirement age.
16. Liquidity preference is the _____
A. need to borrow money for short periods to meet some temporary crises.
B. wish to hold more funds for precautionary purposes.
C. need to increase the money supply in order to lower the interest rate.
D. demand to hold money as assets rather than as stocks.
17. The distinguishing characteristic between the money market and the capital market lies in whether the _____
A. securities are primary or secondary.
B. debt instruments provided are long-term or short-term.
C. funds mobilized are private or public.
D. securities are in debentures or ordinary shares.
18. When two variables are positively related, the graph of the relationship _____
A. is a downward-sloping curve.
B. has a negative intercept.
C. is a straight line.
D. is an upward-sloping curve.
19. All economies are faced with a major problem of how to _____
A. allocate scarce resources.
B. improve trade among nations.
C. increase consumption of imported goods.
D. transform from a developing to a developed economy.
20. Under normal circumstances, a producer will bear the entire burden of taxation on his output if the _____
A. supply of the good is more elastic than the demand.
B. demand for the product is purely elastic.
C. production of the commodity is subject to diminishing returns.
D. demand for his product is more elastic than the supply.
21. Normative economics deals with _____
A. facts and not figures.
B. facts and figures.
C. value judgements.
D. what is and not what should be.
22. Over the years, the Nigerian naira depreciates relative to the United State dollars. Who would benefit the most from this?
A. Nigerian consumers of USA goods.
B. Nigerians consumers of Nigerian goods.
C. USA consumers of Nigerian goods.
D. USA consumers of British goods.
23. The measure of economic growth that is based on evaluation of the trend behaviour of Aggregate Expenditure is _____
A. nominal measurement of growth
B. real output growth rate.
C. growth measured in per capita income.
D. growth in physical equality.
24. Which of the following occurs when equilibrium in the economy is at a level below the potential output?
A. Inflationary gap.
B. Expenditure gap.
C. Recessionary gap.
D. Output gap.
25. Which of these schools of thought believe that aggregate demand is influenced by some economic decisions and sometimes behave erratically?
A. Monetarists.
B. Keynesians.
C. Classicals.
D. Neo-Classicals.
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