2011 - WAEC Economics Past Questions and Answers - page 5
41
Deposit held in a commercial bank are part of
A
money supply
B
transfer payments
C
ordinary shares
D
treasury bills
correct option: a
Users' Answers & Comments42
One profitable form of business undertaken by the commercial banks is
A
the issuing of cheques
B
the payment of standing order
C
lending money to borrowers
D
accepting cheques from customers
correct option: c
Users' Answers & Comments43
When governments wants to discourage consumption, they tax goods whose demand is
A
price inelastic
B
abnormal in nature
C
price elastic
D
normal in nature
correct option: c
Taxation reduces the purchasing power of the people and it reduces their consumption. The decline in consumption leads to decrease in effective demand for the goods and services, which in turn affects the production of these commodities. Government tax goods whose price is elastic. This means that, when there is an increase in price as a result of high taxation, the quantity demanded of the goods will reduce.
44
a rise in government expenditure can lead to
A
higher inflation
B
higher unemployment
C
lower profits for industries
D
lower importation of raw materials by industries
correct option: a
Users' Answers & Comments