2020 - JAMB Economics Past Questions and Answers - page 1

Scarcity refers to the basic economic problem, the gap between limited – that is, scarce resources and theoretically limitless wants.

Any resource that has a non-zero cost to consume is scarce to some degree, but what matters in practice is relative scarcity.

Via: Investopedia

Economics is regarded as a social science because it uses scientific methods to build theories that can help explain the behaviour of individuals, groups and organisations.

Economics attempts to explain economic behaviour, which arises when scarce resources are exchanged.

economicsonline

Invisible balance of payments refers to services or products that do not result in the transfer of physical objects. 

Examples of invisible balance are tourism, consulting services, and shipping services

Price level is a major factor because a rise or decline in the prices of goods and services has a direct effect on the value of money.

A development finance institution, also known as a development bank or development finance company, is a financial institution that provides risk capital for economic development projects on a noncommercial basis. Wikipedia

Development banks provide medium and long-term finance to the industrial and agricultural sectors. The Nigerian bank for commerce and industry is a good example of a development bank.

Restrictive monetary policy is also known as contractionary monetary policy.

A contractionary monetary policy is a type of monetary policy that is intended to reduce the rate of monetary expansion to fight inflation.

The policy reduces the money supply in the economy to prevent excessive speculation and unsustainable capital investment.

Open market operations refer to central bank purchases or sales of government securities in order to expand or contract money in the banking system and influence interest rates.

An oligopsony is a situation when there are only a small number of buyers in a market. As a result of the small number of buyers, limited number of people have market power and are able to lower the price they pay for a good or service due to the lack of competition.

A surplus budget is a budget whose revenues exceed the estimated expenditure in a particular financial year.

The reason the government can impose more taxes in inelastic is because  the buyer's demand does not change as much as the price changes.

This means that an increase in price of such goods as a result of high taxes or other factors does not cause a significant change in the demand.