Question on: JAMB Economics - 1995
Ajanka, a medical student entitled to an annual allowance of N6,000, decides to leave the university to take up a job where he earns N7,000 per annum. By this singular act, the national income level will?
A
increase by N1,000
B
decrease by N 7,000
C
increase by N7,000
D
increase by N 13,000
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Correct Option: C
Here's the breakdown:
* **Initial Situation:** Ajanka received an allowance of N6,000 annually. This allowance represents income being channeled into the economy.
* **New Situation:** Ajanka now earns N7,000 annually from a job.
* **Impact on National Income:** The allowance is replaced by earned income. The total amount contributed to the national income increased by N1,000 (N7,000 - N6,000). This is because the new income is a net gain over the allowance he was receiving.
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