ASCEND ROYAL ACADEMY

2024/2025 ACADEMIC SESSION

THIRD TERM EXAMINATION
NAME: ____________________________________________________
SUBJECT: Economics Objective: ………………………..……………
CLASS: SS Two Theory: …………………………..……………
DURATION: One Hour Total Marks Obtainable: ……..……….
SECTION B: Theory Questions (25 Marks). Total Marks Obtained: …………………
INSTRUCTION: Answer all questions. Academic Officer: ………………………….

1. What does fiscal policy refer to?

a) Government's plans for taxation and expenditure b) The money supply
regulation
c) Government control of inflation d) Government control of
employment

2. Which of the following is an example of recurrent expenditure?

a) Construction of a hospital b) Government employee
salaries
c) Purchase of machinery d) Capital projects

3. Which of the following taxes is a form of indirect tax?

a) Personal income tax b) Excise duties c) Property tax d) Capital
gains tax

4. What is a budget?
a) A list of government employees
b) A financial statement of estimated revenue and proposed expenditure
c) A report on government loans
d) A summary of a country’s trade balance

5. Which of the following is a reason for having a surplus budget?

a) To control inflation b) To increase government debt
c) To reduce government expenditure d) To make reserve for future
spending

6. What is the formula for Gross National Product (GNP)?

a) GNP = GDP - Net income from abroad b) GNP = GDP + Net income
from abroad
c) GNP = GDP × Net income from abroad d) GNP = GDP ÷ Net income
from abroad

7. Which of the following is NOT considered when calculating national income?

a) Illegal transactions b) Government services
c) Sales of second-hand goods d) Expenditure on new investment
projects

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8. Which of the following is NOT an objective of fiscal policy?
a) Economic development b) Industrial development
c) Creation of monopolies d) Income redistribution

9. What is recurrent revenue in public finance?

a) Revenue used for long-term capital projects
b) Revenue received on a regular basis, such as taxes
c) Revenue from foreign aid
d) Revenue raised through loans

10. Which of the following is a source of government revenue?

a) Public debt b) Bank savings c) Taxes d) Charitable
donations

11. Which of the following is a typical name for traditional financial institutions in
the Yoruba culture?
a) ESUSU b) Stock Exchange c) Bank of England d)
Insurance Fund

12. What does a Bill of Exchange (BOE) represent in the money market?
a) A document for transferring ownership of stocks b) A government-issued
bond
c) A promissory note acknowledging a debt d) A currency exchange
agreement

13. What is the demand for money?

a) The total amount of goods in circulation
b) The total amount of money people want to hold
c) The total supply of money in the economy
d) The total amount of money spent on goods and services

14. Which of the following is a motive for holding money according to Lord Keynes?
a) Speculative motives b) Trade motives
c) Production motives d) Saving motives

15. Which of the following factors determines the value of money?

a) The supply of gold b) The price level, inflation, and
deflation
c) The exchange rate d) The level of taxes

16. How is the value of money measured in an economy?

a) By inflation rates b) By a price index
c) By the interest rate d) By the amount of currency in
circulation

17. What happens in a deficit budget?

a) Government spends more than its revenue b) Government spends less than
its revenue
c) Revenue equals expenditure d) There is no government
expenditure

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18. What is the main aim of debt relief?
a) To extend loan repayment periods b) To increase the debt burden
c) To forgive or reduce the debt owed by a country d) To sell government
bonds

19. Which method of measuring national income adds the incomes of all factors of
production?
a) Output method b) Income method
c) Expenditure method d) Value-added method

20. What is a common challenge in estimating net valuation for national income?
a) Difficulty in determining the population size b) Difficulty in valuing
government transfers
c) Incomplete or unavailable data d) Difficulty in measuring
savings rates

21. The law of demand states that .

a) As the price of a good increases, the quantity demanded increases
b) As the price of a good increases, the quantity demanded decreases
c) As the price of a good increases, the demand for the good remains constant
d) As the price of a good increases, the demand for the good decreases.

22. A movement along the demand curve is caused by a change in .

a) Price of the good b) Income of consumers
c) Price of related goods d) Tastes and preferences

23. A shift of the demand curve is caused by a change in .

a) Price of the good b) Income of consumers
c) Price of related goods d) All of the above

24. If the elasticity of demand for a good is less than 1, we say that the demand is
.
a) Elastic b) Inelastic c) Unit elastic d) Perfectly inelastic
25. The standard deviation is a measure of .
a) Central tendency b) Dispersion c) Skewness d)

Kurtosis

26. If the price of a good increase by 10% and the quantity demanded decreases by
20%, the elasticity of demand is .
a) 2 b) -2 c) 0.5 d) -0.5

27. Which of these is a challenge in implementing agricultural policies in Nigeria?

a) Adequate funding for agricultural projects
b) Corruption and lack of continuity in policies
c) Effective monitoring and evaluation mechanisms
d) Strong political will to support agriculture

28. Frictional unemployment is caused by ___________.

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 a) A decline in aggregate demand b) Workers transitioning
between jobs
c) Technological advancements d) Seasonal changes

29. The primary sector of the economy includes _________.

a) Manufacturing b) Agriculture, fishing, and mining c) Services d) Retail trade

30. Barriers to entry in a monopoly market can include __________.

a) Low startup costs b) Legal restrictions and control of essential
resources
c) Free competition d) Easy access to technology

31. Seasonal unemployment is caused by __________.

a) Lack of skills b) Changes in demand based on the
time of year
c) Economic recession d) Automation

32. Technological unemployment is caused by _________.

a) Workers being unwilling to learn new skills b) Automation and advancements in
technology
c) Fluctuations in the economy d) Seasonal changes in demand

33. The tertiary sector of the economy includes __________.

a) Farming b) Services such as transportation c) Mining d)
Construction

34. Which of these best describes the relationship between plant, firm, and
industry?
a) A plant is part of a firm, and a firm is part of an industry
b) A plant is part of a firm, and a group of firms makes up an industry
c) A firm is part of a plant, and a plant is part of an industry
d) An industry is part of a firm, and a firm is part of a plant

35. Which of these is NOT a function of traditional financial institutions?

a) Encourages savings b) Assists members to
borrow
c) Provides long-term loans for capital projects d) Promotes investment

36. What is the main characteristic of a money market?

a) It focuses on short-term loans b) It focuses on long-term
investments
c) It deals with government securities only d) It only involves real estate
transactions

37. Which of the following institutions is NOT involved in the money market?
a) Commercial banks b) Discount houses c) Development banksd)
Insurance companies

38. Which instrument is commonly used in the money market for short-term
borrowing by the central bank?
a) Treasury bills b) Stocks c) Bonds d) Debentures

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39. What is the advantage of Call Money Funds in the money market?
a) It provides long-term funding
b) It allows for early returns and is withdrawable on demand
c) It ensures the government earns revenue
d) It is a non-refundable investment

40. Which of the following is a key advantage of the money market?

a) It mobilizes long-term savings b) It provides finance for large capital
projects
c) It enhances savings and liquidity d) It reduces government debts

41. Which of the following is a cause of demand-pull inflation?

a) Increase in production costs b) High demand for goods without an increase in
supply
c) A decrease in wages d) Increase in imports

42. What is cost-push inflation?

a) Inflation caused by high demand b) Inflation caused by increases in
production costs
c) Inflation caused by higher wages d) Inflation caused by excessive
imports

43. What is hyperinflation?

a) A mild and steady rise in prices b) Inflation caused by decreased
consumer demand
c) Inflation that results from increased taxation d) A rapid and uncontrollable
rise in prices

44. Which of the following is a positive effect of inflation?

a) Discourages savings b) Encourages producers to increase
production
c) Reduces the burden of debt for creditors d) Decreases government revenue
from taxes

45. A point inside the PPC indicates .

a) Full employment of resources b) Unemployment of resources
c) Efficient use of resources d) Inefficient use of resources.

46. Average product is calculated as .

a) Total product / total cost b) Total product / total revenue
c) Total product / number of inputs d) Total cost / number of inputs

47. The law of diminishing marginal returns states that .

a) As more inputs are added, total product increases at an increasing rate
b) As more inputs are added, total product increases at a decreasing rate
c) As more inputs are added, total product remains constant
d) As more inputs are added, total product decreases

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48. Which factor of production represents the physical and mental effort put into the
production of goods and services?
a) Land b) Capital c) Labour d) Entrepreneurship

49. What does the law of supply state?

a) Quantity supplied decreases as price increases
b) Quantity supplied increases as price increases
c) Quantity demanded decreases as price increases
d) Quantity demanded increases as price decreases

50. Which of the following is a characteristic of a monopolistic competition market

structure?
a) Many sellers, identical products b) One seller, unique
product
c) Few sellers, identical products d) Many sellers, similar but not
identical products

51. Which of the following is a control measure for deflation?

a) Deficit budget b) Increase in taxation
c) Decrease in government expenditure d) Decrease in wages

52. What does debt management refer to?

a) The process of paying off debts
b) The process of reducing the government’s debt
c) Structuring a country’s debts to reduce external debt stock
d) Borrowing money from international bodies

53. Which of the following is an objective of public finance?

a) Providing private loans b) Revenue generation
c) Enhancing monopolies d) Reducing government
expenditure

54. What is capital revenue used for?

a) Meeting recurrent expenses b) Financing long-term projects like
infrastructure
c) Paying salaries and wages d) Funding immediate operational
costs

55. What characterizes a balanced budget?

a) Total estimated revenue is less than the proposed expenditure
b) Total estimated revenue is greater than the proposed expenditure
c) Total estimated revenue equals the proposed expenditure
d) Total estimated revenue is zero

56. Which of the following is an instrument used in the capital market?

a) Treasury bills b) Shares c) Bills of exchange d) Call
money funds

57. Which of these is NOT an advantage of the capital market?

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 a) It provides long-term loans b) It encourages the running of the
economy
c) It enhances short-term liquidity d) It mobilizes savings

58. What is the role of the Central Security Clearing System (CSCS)?
a) To facilitate loans to businesses
b) To clear and settle transactions for the stock exchange
c) To issue government bonds
d) To control inflation rates

59. Marginal product is calculated as .

a) Change in total product / change in total cost
b) Change in total product / change in total revenue
c) Change in total product / change in number of inputs
d) Change in total cost / change in number of inputs

60. Public finance primarily deals with the financial activities of which of the
following?
a) Private firms b) Households
c) Government d) Non-governmental
organizations

ASCEND ROYAL ACADEMY

2024/2025 ACADEMIC SESSION
THIRD TERM EXAMINATION

ALWAYS SOAR!!!
Askhowtoascend@gmail.com +234 8174419999 +234 8032850317
NAME: ____________________________________________________
SUBJECT: Economics Objective: ………………………..……………
CLASS: SS Two Theory: …………………………..……………
DURATION: One Hour 30 Minutes Total Marks Obtainable: ……..……….
SECTION B: Theory Questions (35 Marks). Total Marks Obtained: …………………
INSTRUCTION: Answer any five (5) questionsAcademic Officer: ………………………….

1. a. Explain the term ‘taxation’

b. In what four (4) ways can the government of your country use taxation to
improve the economy
c.Adam Smith in his book ‘Wealth of Nations’ introduced guiding rules of
taxation known as Canons of Taxation. Describe four (4) of the rules
(7 marks)

2. a. Explain the term national debt

b. State any four (4) instruments of government borrowing in Nigeria
c. Highlight four (4) problems of trade by barter (7

marks)

3. a. What is meant by the term “localization of industries

b. Discuss four (4) factors which determine the location of industries and draw
specific examples from Nigeria
c. Differentiate between privatization and commercialization. (7

marks)

4. a. Define National income

b. Explain the following;
i. personal income
ii. Net national income
iii. Gross national product
iv. Gross domestic product
c. Identify the likely problems that can be encountered in the compilation of
national income accounting in Nigeria.
(7 marks)

5. a. The demand and supply equation for a commodity are given as:
Qd=10−2 p and Qs=4 p−8
Given that P is in Naira; Qd and Qs are in kg, determine
i. The equilibrium price
ii. The equilibrium quantity
iii. If the price ( P) were to be N4.00, what will be the excess supply?
iv. If the price were fixed at N1.00, what will be the excess demand?
b. State the law of diminishing marginal utility. (7

marks)

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6. Study the table below:

Commodit Change in Price Commodit Change in Quantity

y Original (N) Old (N) y Original New (kg)
(kg)
Bread 150 200 Yam 1500 2000
Beef 250 400 Fish 1000 3000
Butter 1000 1500 Margarine 2500 4000

Compute the elasticity of demand for:

a) Bread and yam
b) Beef and fish
c) Butter and margarine
d) Show the type of elasticity for a, b, c above (7

marks)

7. a. Why do people prefer to hold money? Explain three (3) reasons

b. Discuss four (4) instruments of government borrowing

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