UNIVERSITY OF LAGOS
1. W hich of the following is NOT a goal of modern budgets?
A. The control of inflation
B. The reduction in income inequality
C. The shift of all resources from the private to the public sector
D. Economic development.
2. W hich of the following is an external economy derived by a firm?
A. Low cost opportunities enjoyed by being in a place where other producers concentrate
B. Technical economies enjoyed by varying the factors of production
C. Economies of management by putting administrators where they are most efficient
D. Marketing advantages attained through preferential treatment in the purchase and distribution of produce
3. T he most important economic characteristic differentiating commercial banks from other financial institutions is their
A. Function as a safe and prontable store place for savings
B. Role in financing balance of payments deficits
C. Status as an intermediary between savers and borrowers
D. Ability to create and destroy money.
4. W hich of the following causes of inflation is related to demand-pull inflation?
A. Poor storage facilities
B. Low productivity on farms and in firms
C. Poor distribution system
D. increase in government expenditure on construction.
5. W hich of the following advantages of localization of industries may also be a disadvantage?
A. Extemal economies
B. Concentration of industries and people
C. Development of organized markets
D. Reduced cost of research
6. G iven that the cash reserve ratio is 10percent, what is the maximum amount of money that the banking system can create from an initial cash deposit of N100.00?
7. W hich of the following is used by the Central Bank to control the rate of interest?
A. Bill of Exchange
B. Bankers Order
C. Fixed Deposit Account
D. Open Market Operation
8. D eflation is a persistent fall in the general price level and is usually caused by
A. A reduction in total demand
B. An increase in government spending
C. An increase in the money supply
D. An increase in aggregate demand.
9. T he best technical description of aiprogiressive tax is a
A. Tax which takes money from the rich than from the poor
B. More equitable tax than a regressive one
C. Tax which takes higher proportion of extra naira received as income rises
D. Tax which falls directly on those in the high income brackets
10. O ne of the advantages of a partnership over a sole proprietorship is that
A. lt is the most popular form of business organization
B. The partner can easily withdraw from the business
C. lt makes an increase in the capital of the business possible
D. There is no limit to the number of people who may bring in capital.
11. l n a public company, shares are
A. Sold to one person only
B. Distributed freely
C. Advertised to members of the public for subscription
D. Disposed of by the Chief Executive.
12. T he Nigerian Bank for Commerce and lndustry is
A. A Commercial Bank
B. A Development Bank
C. An industrial Bank
D. A Merchant Bank.
13. T o control inflation, the monetary authorities of a country can
A. Reduce taxes
B. Advise govemment to increase its expenditure
C. Engage in expansive monetary policy
D. Engage in restrictive monetary policy.
14. W hich of the following is a characteristic of a private limited liability company?
A. its shares can be sold to the public
B. The number of shareholders ranges from fifty to one hundred
C. All shareholders have equal powers and responsibilities
D. The number of shareholders ranges from two to fifty.
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