ECONOMICS EXAM QUESTIONS FOR SS2 THIRD TERM
SS2 ECONOMICS EXAM QUESTIONS THIRD TERM – EDUDELIGHT.COM
THIRD TERM EXAMINATION
Examination malpractices may lead to a repeat of the subject or suspensions don’t be involved.
Subject: ECONOMICS
Class: SS 2
DURATION ; 2Hrs
- Economics is regarded as a science because it (a) studies laws that governs human behaviors (b) uses scientific method to explain human behavior (c) makes use of controlled experiments to explain human behavior (d) makes use of machines to study human behavior
- Government revenue will increase if taxes are levied on goods with (a) perfectly elastic demand (b) fairly elastic demand (c) perfectly inelastic demand (d) unitary elastic demand
- All the following are methods of determining prices except (a)maximum pricing (b) rationing (c) minimum pricing (d) auctioning
- When the demand for foreign exchange exceeds its supply, the value of the domestic currency (a) appreciates (b) depreciates (c) remains unchanged (d) expands
- General rise in the price level induced by increased price of inputs is referred to as (a) run-away inflation (b) cost-push inflation (c) demand-pull inflation (d) imported inflation
- A budget is balanced when expected total revenue is (a) greater than expected expenditure (b) less than total expenditure (c) equal to total expenditure (d) greater than total expenditure
- The value of money is affected by the (a) speculative motive (b) price level (c) precautionary motive (d)intervention of development banks
- The difference between the Gross Domestic Product (GDP) and Gross National Product (GNP) is (a) depreciation (b) transfer payment (c) net income from abroad (d) direct taxes
- In National Income accounting ,the term Net is used to indicate that a value (a) includes incomes of foreigners (b) excludes incomer of citizens (c) includes depreciation (d) excludes depreciation
- The main item traded on a Stock Exchange Market is (a) treasury bills (b) travellers’ cheques (c) foreign currencies (d) new shares
- Precautionary motive for holding money is to (a) meet daily and regular transactions (b) take advantage of changes in the prices of goods and services (c) cover unforeseen events (d) cover expenses on house rent
- The proportion of commercial banks’ total assets kept in the form of highly liquid Assets is known as (a) demand deposit (b) fixed deposit (c) cash ratio (d) moral suasion
- In order to control inflation ,the government should (a) reduce the cost of borrowing (b) buy securities in the open market (c) adopt restrictive monetary policy (d) discourage savings.
- Disposable income is the income earned (a) by the nationals of a country resident within the country (b) from productive activities of nationals of a country both at home and abroad (c) when personal income tax is deducted from personal income (d) when the gross income of an individual is added to person income tax
- Which of the following is not a recurrent expenditure? (a) building of schools and colleges (b) maintenance of school buildings (c) payment of teachers’ salaries (d) purchase of stationary for examinations
- A situation in which the estimated government revenue is less than the proposed expenditure for a given year can be described as (a) surplus budgeting (b) supplementary budgeting (c) balance budgeting (d) deficit budgeting
- Which of the following best defines inflation? (a) cyclical increase in prices (b) periodic increase in prices (c) persistent increase in prices (d) occasional increase in prices
- Which of the following functions of money is mostly affected during inflation? (a) medium of exchange (b) unit of account (c) store of value (d) standard of deferred payment
- Which of the following cannot be described as Land? (a) Forest (b) diamond (c) roads (d) crude oil.
- Why would an individual increase his level of consumption during inflationary period? (a) the real value of any amount saved falls overtime (b) interest rate are generally low (c) there are varieties of goods to buy (d) wages and salaries stagnates during inflation
- National Income is used to measure (a) a country’s population size (b) a country’s economic growth (c) the human level of development (d) the flow of imports to a country.
- Scarcity implies that (a) goods cannot be produced efficiently (b) human wants are unlimited (c) goods and services are limited (d) commodities are evenly distributed within the economy.
- Mono-product economics are those that produce (a) only international products (b) petroleum products (c) agricultural products (d) one main commodity
- The profit of a producer is the difference between (a) total cost and margin cost (b) total revenue and total cost (c) average cost and total cost (d) price and total cost
- Money will serve as a standard of deferred payment if it is (a) homogeneous (b) durable (c) easily recognized (d) stable in value
- The National income is the (a) Gross Domestic Product at market prices (b) Gross National Product at factor cost (c) Net National product at factor cost (d) Net National Product at market prices
- When depreciation is deducted from Gross National Product, the result is (a) total national income (b) gross domestic product (c) net national product (d) net domestic product
- Human wants are unlimited because (A) Production is inadequate (B) resources have alternative uses (C) new wants always arise (D) resources are limited
- The demand for money is described as a (a) competitive demand (b) joint demand (c) derived demand (d) composite demand
- Which of the following is involved in the money market? (a) building society (b) development banks (c) commercial banks (d) stock exchange
- Demand pull inflation can aptly be described as a (a) inflation induced by rising costs of production of production (b) reduction in government expenditure (c) persistent rise in prices due to increase in expenditure (d) massive importation of goods from a country with hyperinflation
- A basic economic problem of any society is (A) High level of illiteracy (B) irregular power supply (C) population growth (D) resource allocation
- State owned enterprises are more common in (A) centrally planned economies (B) mixed economies (C) capitalist economies (D) developed economies
- A normal supply curve has a positive slope which indicates that (A) sellers are willing to sell more at a lower price (B) sellers are indifferent to price (C) sellers are willing to sell more at a higher price (D) there is always a fixed supply
- In a centrally planned economy, what to produce is (A) determined by the forces of demand and supply. (B) Driven by profit motive. (C) Determined by consumers. (D) the responsibility of state’s bureaucrats
- Which of the following is related to resource allocation in an economy? (A) How to produce (B) What to produce (C) For whom to produce (D) Efficient use of inputs
- Which of the following is not a feature of socialism? (A) Collective ownership of productive resources (B) Freedom of enterprise (C) Production is not based on the profit motive (D) Maximization of public welfare
- Households make economic decisions because they want to (A) make more profit (B) increase their salaries and wages (C) increase their purchases (D) maximize their satisfaction
- Which of the following functions of money is mostly affected during inflation? (A) Medium of exchange (B) Unit of Account (C) Store of value (D) Standard of deferred payment
- A shift in the demand curve indicates (A) exceptional demand (B) change in demand (C) change in quantity demanded (D) elasticity of demand
- Precautionary motive for holding money is to (A) meet daily and regular transactions (B) take advantage of changes in the prices of goods and services (C) cover unforeseen events (D) cover expenses on house rent
- Which of the following measures will not encourage industrialization in West Africa? (A) Taking over of all forms of industries by the government (B) Provision of social infrastructure (C) Giving tax incentives, especially to infant industries (D) Using tariffs to discourage the use of imported items.
- Goods which have to be paid for are known as (A) physical goods (B) economic goods (C) free goods (D) intangible goods.
- If a 6% decrease in price results in more than 6% decrease in quantity supplied, supply can be regarded as (A) elastic (B) unitary elastic (C) Perfectly inelastic (D) perfectly elastic
- A condition for consumer utility maximization is (A) equality of the ratio of marginal utilities and ration of prices. (B) equality of the ratio of average utilities and the ratio of prices (C) equality of the marginal utility to total utility ratio for both commodities (D) total utility and marginal utility must be Zero
- Which of the following best describes the mode? The (A) observation with the highest frequency (B) average of two middle numbers (C) item that occupies the middle position (D) difference of two extreme values
- Given the demand function; Qd = 20 – 1/2 p. What is Qd, when p is $12?. (A) 6 units (B) 10 units (C) 12 units (D) 14 units
- Households make economic decisions because they want to (A) make more profit (B) Increase their salaries and wages (C) increase their purchases (D) maximize their satisfaction
- A normal supply curve has a positive slope which indicates that (A) sellers are willing to sell more at a lower price (B) sellers are indifferent to prices (C) sellers are willing to sell more at a higher price (D) there is always a fixed supply.
- The components of a three-sector economy are (A) banks, Schools and hospitals (B) workers, producers and marketers (C) households, firms and the government (D) producers, retailers and wholesalers
SS2 ECONOMICS EXAM QUESTIONS THIRD TERM – EDUDELIGHT.COM
ECONOMICS 2 THEORY QUESTIONS
ESSAY-SECTION A
Answer one question only from this section
- The following data shows the budget of a hypothetical country in 2006. Study the data and answer the questions that follow.
| Revenue | {$ Millions} |
| Company tax | 240 |
| Workers’ income tax | 160 |
| Excise duties | 80 |
| Taxes on exports | 100 |
| Value added tax | 150 |
| Import duties | 90 |
| Non – tax revenue | 40 |
| Expenditure | {$ Millions} |
| Construction of road | 100 |
| Building of schools | 120 |
| Payment of workers’ salaries | 150 |
| Government administration | 200 |
| Maintenance of health facilities | 220 |
| Extension of electricity to rural areas | 180 |
| Maintenance of official vehicles | 70 |
- How many revenue was realized from?
- Direct tax
- Indirect tax
- Calculate the total:
- Recurrent expenditure
- Capital expenditure
- What percentage of total revenue was collected as indirect tax?
- State two examples of non-tax revenue
- What was the budget surplus of deficit? Explain your answer.
- The table below shows the incomes and rates of income tax levied on four professionals in an economy.
| Profession | Income Per Month($) | Tax rate (%) | Disposable income ($) |
| Doctor | 8,000 | 10 | |
| Engineer | 7,000 | 12 | |
| Civil Servant | 5,000 | 18 | |
| Nurse | 6,000 | 15 |
Use the above data to answer the questions that follows
- Calculate the disposable incomes of the four individuals. (b) what system of taxation was employed ? (c) Give reasons for your answers in 2(b).
(d) with the aid of a diagram, explain the system of taxation employed in 2(b).
SECTION B
Answer two questions only from this section.
3 a. what is a tax?
b. Briefly outline the principles of taxation and give reasons why Nigerians are taxed.
c. Explain each of the following types of taxes ; (i) Proportional tax (ii) Progressive tax (iii) Regressive tax
d. outline the difficulties encountered by tax collectors in Nigeria.
4 (a) Explain the functions of Stock Exchange.
(b) Write short note on the following: (i) The money Market (ii) the capital market
(c) What is meant by National Income?
What are the problems involved in the measurement of National Income
(d) Write short note on the following (i) Gross National Product [GNP] (ii) Gross Domestic Product [GDP] (iii) Net National Product [NNP] (iv) Per Capita Income (iv) Disposable Income
v. Open inflation
5 (a) what is meant by Demand for money?
(b) What are the motives behind the demand for money?
(c) What is meant by the value of money?
(d) What factors bring about the changes in the value of money?
6 (a) what is inflation? And how does it affect the value of money?
(b) What are the positive and negative effects of inflation on an economy?
(c) Write notes on the following
i. Demand-pull inflation
ii. Disinflation
iii. Cost-pull inflation
iv. Reflation
SS2 ECONOMICS EXAM QUESTIONS THIRD TERM – EDUDELIGHT.COM
ECONOMICS
SECTION B
Answer one question only from this section
1a. The demand function for a commondity is given as Qd = 21 – 3p. Use the demand function to complete the table below –
| Price =N= | 0 | 1 | 3 | 4 | 5 | 6 |
| Quantity demanded (kg) |
b. Draw the demand curve for the completed schedule in 1(a)
c. Outline any three factors affecting demand
2. The table below shows the budgetary allocation of a country to selected sectors of the economy in a particular year. Study the table carefully and answer the questions that follow.
Sectors Amount ($million)
___________________________________________
Education 6,250
Mining 2.150
Agriculture 4,300
Communications 2,400
Health 2,900
a. Present the above information contained in the table in the form of a pie chart
b. Distinguish between a budget surplus and a budget deficit
SECTION C
Answer three questions only from this section
3a. What is supply?
3b. Describe only five determinants of supply
4a. Define the term Limited Liability
b. Explain four problems of statutory public corporations in your country
5a. What is market?
b. Explain the main features of a perfectly competitive market
6a. Explain the following systems of agriculture as practised in your country.
ECONOMICS
1. Suppose that the equilibrium price of an article is N5.00 but the government fixes the price by law at N4.00, the supply will be
A. The same as equilibrium supply
B. Greater than equilibrium supply
C. Less than the equilibrium supply
D. Determined later by government
E. None of these
2. A budget deficit means
A. That a country is buying more than is selling
B. That a country is selling more than is buying
C. That a government is spending more than in takes in taxation
D. That a government is spending less than it takes in taxation
E. That a government is spending as much as it takes in taxation
3. When elasticity is zero, the demand curve is
A. Perfectly elastic
B. Perfectly inelastic
C. Concave
D. Downward slopping
E. Circular
4.The following is NOT a reason for the existence of small firms
A. Scale of production is limited by size of the market
B. Expansion brings diminishing returns
C. Large firms can carter for wide markets
D. Small firms can provide personal services
E. All of the above
5. Inferior goods are referred to in Economics as goods
A. Whose quality is low
B. Consumed by very poor people
C. Whose consumption falls when cunsumers’ income rises
D. Which satisfy only the basic needs
E. None of the above
6. To discourage the consumption of harmful commodities, government should tax such commodities if they have
A. elastic demand
B. inelastic demand
C. negative demand
D. positive demand
E. unitary demand
7. The formular used by the Expenditure approach to calculate National income is
A. Y=C + I + X – M –G
B. Y= C + X – M – I + G
C. Y = C + I + G + X – M
D. Y = C – I + X – M + G
E. Y = C + G – X + M – I
8. A producer who can only influence the price of his product but canNOT determine the quantity to be sold is referred to as
A. duopoly
B. monopolist
C. monopsonist
D. oligopoly
E. perfect competitor
9. Government expenditure on universal basic education and subsidy on agriculture are aimed at
A. encouraging growth of the economy
B. projecting images of government
C. re-allocation of resources
D. redistribution of income and wealth
E. stabilization of the economy
10. Which of the following measure will NOT serves as a control during inflation period?
A. increase in personal income tax
B. increase in bank rate and interest
C. increase in government capital expenditure
D. reduction in money supply
E. reduction in government recurrent expenditure
11. Which of the following is a determinant of elasticity of supply?
A. Consumer’s income
B. Degree of necessities
C. Durability of the product
D. Number of uses of the commodity
E. Proportion of income spent on the product
12. Entrepreneur is associated more with
A. capital management
B. production of beverage
C. profit making
D. profit sharing
E. risk bearing
13. Inflation is a …………….
A. general increase in the price of a single product
B. period of economic recession
C. period of hunger
D. period of excessive money
E. persistent rise in the general price level
14. Which of these factors causes a change in the quantity demanded of a commodity?
A. Income
B. Population
C. Price of other commodities
D. Price of the commodity concerned
E. Taste and fashion
15. One of the positive contributions of the petroleum industry to Nigeria’s economic development is that it
A. creates ecological problems
B. creates political unrest
C. creates uncertainties in government revenues
D. is a major foreign exchange earner
E. suppresses agricultural development
16. The unit for measuring changes in prices and output is called ………………. index
A. capital
B. expenditure
C. income
D. money
E. price
17. A firm is said to be a public joint-stock company when it
A. has unlimited liability
B. is administered by the public
C. is owned by the government
D. operates as a public corporation
E. sells its shares to members of the public
18. The growth of a country’s population is affected by
A. military might of the country
B. number of births per thousand of the population
C. number of people willing to be counted
D. the amount of money in circulation
E. the number of men in the population
19. The price and quantity of crude oil and petrol sold to other countries by Nigeria is fixed by the
A. ECOWAS
B. IMF
C. OPEC
D. NNPC
E. none
20. Taxes levied on locally manufactured goods are called
A. custom duties
B. excise duties
C. purchase tax
D. sales tax
E. VAT
21. Which of the following is a form of business enterprise?
A. Cartel
B. Entrepreneurship
C. Partnership
D. Stock exchange
E. Supermarket
22. The demand curve of a perfect competitive market is infinitely elastic indicating that the firm can
A. refuse to sell any quantity
B. sell any quantity of output at the prevailing price
C. sell fixed quantity of output at the prevailing market price
D. sell less quantity
E. sell more quantity at a higher price
23. Through membership of the Economic Community of West African States (ECOWAS) countries have achieved
A. a large market for their products
B. emancipation of Africa
C. full employment of resources
D. higher transportation cost of goods within the region
E. military superiority over other African countries
24. Economic growth can be defined as
A. a rapid and sustained rise in real output per head
B. A rise in real income per head
C. an increase in technology only
D. insufficiency in food production
E. over population in a country
25. A monopolist is a
A. duopolist
B. group of producers of related goods
C. partnership business that produces a commodity with high demand
D. single producer or seller of a commodity at cheap rate
E. single producer or seller of a commodity that has no close substitute
26. The purchasing power of the Naira will fall when
A. worker are retrenched
B. the colour of the Naira is changed
C. the military take over
D. there is inflation
E. none
27. The process of building up country’s capacity to process raw materials for the production of goods is known as
A. firm
B. industry
C. industrialization
D. location of industry
E. localization
28. Which of the following is a function of the central bank?
A. Accepting deposits from the public
B. Agent of payment for individuals
C. Discounting bills of exchange
D. Issuing of currency
E. Provision of short term housing loans
29. Which of the following is a determinant of elasticity of supply?
A. Consumer’s income
B. Degree of necessities
C. Durability of the product
D. Number of uses of the commodity
E. Proportion of income spent on the product
SS2 ECONOMICS EXAM QUESTIONS THIRD TERM – EDUDELIGHT.COM
