Year :
2019
Title :
Economics
Exam :
WASSCE/WAEC MAY/JUNE
Paper 1 | Objectives
31 - 40 of 50 Questions
| # | Question | Ans |
|---|---|---|
| 31. |
The total value of goods and services produced within the borders of a country is A. net national product B. net domestic product C. gross domestic product D. gross national product Detailed SolutionGross domestic product (GDP) is the total market value of the goods and services produced by a country's economy during a specified period of time. |
|
| 32. |
Which of the following factors will not underestimate the national income? A. Rapid decrease in prices B. Increased subsistence production C. Practice of specialization of labour D. Increase in value of services not paid for |
D |
| 33. |
Which of the following items is not considered as a transfer payment? A. Pension pay B. Government subsidy C. Students' grant D. Doctor's salary Detailed SolutionTransfer payment is any payment made by a government in which no goods or services are being paid for. They include welfare, financial aid, social security, and government subsidies for certain businesses. From the options above, doctors' salaries are a service paid for. |
|
| 34. |
Which of the following is true of the value of money? It A. is positively related to the price level B. depends on the value people attach to it C. is determined by the government D. is inversely related to the price level Detailed SolutionValue of money is what one unit of money can buy and the price level is the average of prices of all the goods and services within an economy. So when the price level increases the value of money goes down and vise versa. Hence the relationship between price level in an economy and the value of money is inverse. |
|
| 35. |
The motive for holding money to meet unforeseen events is termed A. precautionary demand B. transactions demand C. liquidity demand D. speculative demand Detailed SolutionThe precautionary demand for money is the act of holding money to cater to unforeseen circumstances. |
|
| 36. |
An increase in the prices of factor inputs may result in A. demand-pull inflation B. stagflation C. open inflation D. cost-push inflation Detailed SolutionCost-push inflation occurs when overall prices increase (inflation) as a result of increases in the cost of wages and raw materials. |
|
| 37. |
Citizens are protected from the government's arbitrariness in taxation by the canon of A. elasticity B. flexibility. C. economy D. certainty Detailed SolutionThe canon of economy: implies that the cost of collecting a tax should be as minimum as possible. This is what protects citizens from being overly charged by a government |
|
| 38. |
What happens when the central bank increases the bank rate? A. Amount of borrowing increases B. Amount of borrowing decreases C. Supply of money increases D. Commercial banks are not affected Detailed SolutionThe central bank normally raises the lending rates in order to discourage borrowing. When the interest charged on loans is high, fewer people will be willing to borrow money from financial institutions. |
|
| 39. |
Insurance Companies are similar to commercial banks in that they A. Compensate their customers for losses B. act as lender of last resort C. help in maintaining monetary stability in a nation D. help in mobilizing savings for investment |
D |
| 40. |
In most developing countries, a large percentage of the labour force is engaged in A. trading B. mining C. agriculture D. manufacturing Detailed SolutionDeveloping countries are characterized by a large percentage of the labour force engaged in agricultural activities. These are countries with low per capita income and a high number of poor people. These poor persons are predominantly found in the agricultural sector. |
| 31. |
The total value of goods and services produced within the borders of a country is A. net national product B. net domestic product C. gross domestic product D. gross national product Detailed SolutionGross domestic product (GDP) is the total market value of the goods and services produced by a country's economy during a specified period of time. |
|
| 32. |
Which of the following factors will not underestimate the national income? A. Rapid decrease in prices B. Increased subsistence production C. Practice of specialization of labour D. Increase in value of services not paid for |
D |
| 33. |
Which of the following items is not considered as a transfer payment? A. Pension pay B. Government subsidy C. Students' grant D. Doctor's salary Detailed SolutionTransfer payment is any payment made by a government in which no goods or services are being paid for. They include welfare, financial aid, social security, and government subsidies for certain businesses. From the options above, doctors' salaries are a service paid for. |
|
| 34. |
Which of the following is true of the value of money? It A. is positively related to the price level B. depends on the value people attach to it C. is determined by the government D. is inversely related to the price level Detailed SolutionValue of money is what one unit of money can buy and the price level is the average of prices of all the goods and services within an economy. So when the price level increases the value of money goes down and vise versa. Hence the relationship between price level in an economy and the value of money is inverse. |
|
| 35. |
The motive for holding money to meet unforeseen events is termed A. precautionary demand B. transactions demand C. liquidity demand D. speculative demand Detailed SolutionThe precautionary demand for money is the act of holding money to cater to unforeseen circumstances. |
| 36. |
An increase in the prices of factor inputs may result in A. demand-pull inflation B. stagflation C. open inflation D. cost-push inflation Detailed SolutionCost-push inflation occurs when overall prices increase (inflation) as a result of increases in the cost of wages and raw materials. |
|
| 37. |
Citizens are protected from the government's arbitrariness in taxation by the canon of A. elasticity B. flexibility. C. economy D. certainty Detailed SolutionThe canon of economy: implies that the cost of collecting a tax should be as minimum as possible. This is what protects citizens from being overly charged by a government |
|
| 38. |
What happens when the central bank increases the bank rate? A. Amount of borrowing increases B. Amount of borrowing decreases C. Supply of money increases D. Commercial banks are not affected Detailed SolutionThe central bank normally raises the lending rates in order to discourage borrowing. When the interest charged on loans is high, fewer people will be willing to borrow money from financial institutions. |
|
| 39. |
Insurance Companies are similar to commercial banks in that they A. Compensate their customers for losses B. act as lender of last resort C. help in maintaining monetary stability in a nation D. help in mobilizing savings for investment |
D |
| 40. |
In most developing countries, a large percentage of the labour force is engaged in A. trading B. mining C. agriculture D. manufacturing Detailed SolutionDeveloping countries are characterized by a large percentage of the labour force engaged in agricultural activities. These are countries with low per capita income and a high number of poor people. These poor persons are predominantly found in the agricultural sector. |