2020 - JAMB Economics Past Questions & Answers - page 1

1

Scarcity in economics means?

A

human wants are limitless

B

the economy has very few resources

C

the economy can scarcely produce anything

D

resources are limited in relation to wants

CORRECT OPTION: d

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

2

Economics is often described as a social science because?

A

laboratory experiments are performed

B

It makes use of controlled experiments

C

It uses scientific methods to explain an observed phenomenon and predict future events

D

It makes use of fieldwork

CORRECT OPTION: c

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

3

Which of the following is an example of an invisible item on the balance of payments account

A

shipping and aviation

B

exports and imports

C

merchandise

D

Bullion

CORRECT OPTION: a

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

4

A major factor affecting the value of money is the?

A

price level

B

banking habits

C

transaction motive

D

divisible nature of money

CORRECT OPTION: a

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.

5

The Nigerian bank for commerce and industry is?

A

a commercial bank

B

a development bank

C

an industrial bank

D

a merchant bank

CORRECT OPTION: b

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.

6

To control inflation, the monetary authorities of a country can

A

reduce taxes

B

advise the government to increase its expenditure

C

engage in expansive monetary policies

D

engage in restrictive monetary policies

CORRECT OPTION: d
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.
7

Which of the following is used by the central bank to control the rate of interest

A

bill of exchange

B

banker's order

C

fixed deposit account

D

open market operation

CORRECT OPTION: d
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.
8

What form of market is found in an imperfect competition where there are few buyers and many sellers

A

monopoly

B

oligopoly

C

duopoly

D

oligopsony

CORRECT OPTION: d
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.
9

A budget with a projected revenue in excess of its expenditure is said to be?

A

balanced

B

surplus

C

deficit

D

inflationary

CORRECT OPTION: b

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

10

In order to raise more revenue for a certain period, the government should impose higher taxes on goods whose demands are___

A

elastic

B

inelastic

C

perfectly elastic

D

unitary elastic

CORRECT OPTION: b

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.

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