2017 - WAEC Economics Past Questions and Answers - page 4

31

in an industrial area, the location of industries is particularly influenced by ?

A
extent of the division of labour
B
external economies
C
internal economies
D
nearness to financial institution
correct option: b

External economies of scale imply that as the size of an industry grows larger or more clustered, the average costs of doing business within the industry fall. This may occur due to increased specialization or training of workers, faster innovation or shared supplier relationships.

Following are the types of external economies of scale

  1. Transportation and Communication
  2. Skilled Labour
  3. Facility of Workshop
  4. Helping Industry
  5. Research and Experiment
  6. Banking Facility
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32

which of the following is a transfer income

A
dividends
B
rent
C
pensions
D
interest
correct option: c

Examples of transfer payments include welfare, financial aid, social security, and government making subsidies for certain businesses.

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33

the value added method used in measuring national income is to 

A
measure output at factor cost
B
avoid multiple counting of output
C
deduct depreciation of capital assets
D
add net factor income from abroad
correct option: d

By adding to its net factor income from abroad, we get NNPFC which is callednational income.

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34

which of the following is most likely to be of benefit to a debtor

A
inflation
B
deflation
C
revaluation
D
monetization
correct option: a

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.

If wages increase with inflation, and if the borrower already owed money before the inflation occurred, the inflation benefits the borrower. This is because the borrower still owes the same amount of money, but now he or she has more money in his or her paycheck to pay off the debt.

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35

A measure of the value of money in an economy is the

A
size of workers
B
general price
C
total level of savings
D
total amount of loans granted by the banks
correct option: b

The value of any good is determined by its supply and demand and the supply and demand for other goods in the economy. A price for any good is the amount ofmoney it takes to get that good. the value is inherent in its purchasing power which is price

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36

one characteristic of money is that it should  be?

A
a standard of differed payment
B
stable in value
C
store of value
D
acceptance by the central bank
correct option: d

What Are the Main Characteristics of Money?

The main characteristics of money are durability, divisibility, portability, acceptability, limited supply and uniformity. Money serves as a store of value, a unit of account and as a medium of exchange. Durability of money means that it can be replaced when it is worn out.

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37

The function that distinguishes commercial banks from the central bank is that the former 

A
is a lender of last resort
B
accepts deposits from the public
C
services the public debt
D
regulates foreign exchange
correct option: b

Commercial banks serve individuals and businesses, while central banks serve the country'sbanking system. They provide money transfers back and forth between banks and governmental institutions both domestically and in cases of transactions with foreign entities.

the major difference here is that, the central bank is the government bank and serves the country in a whole while commercial banks accepts deposit from the public

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38

Direct taxes include?

A
excise duty
B
ad valorem tax
C
specific tax
D
capital gain tax
correct option: d

A direct tax is a tax, such as income tax, which is levied on the income or profits of the person who pays it, rather than on goods or services. Some of the different direct taxes are income tax, corporate tax, wealth tax, and capital gains tax.

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39

The control of aggregate demand through changes in government spending and tax rates is referred to as?

A
monetary policy
B
government policy
C
income policy
D
fiscal policy
correct option: d

In economics and political science, fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the economy.

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40

which of the following is not a feature of economic underdevelopment 

A
monocultural economy
B
high productivity
C
low life expectancy
D
income inequality
correct option: b

The term underdevelopment refers to that state of an economy where levels of living of masses are extremely low due to very low levels of per capita income resulting from low levels of productivity and high growth rates of population.

 there is a set of common characteristics of underdeveloped economies such as low per capita income, low levels of living, high rate of population growth, illiteracy, technical backwardness, capital deficiency, dependence on backward agriculture, high level of unemployment, unfavourable institutions and so on.

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