Hello and Welcome to UTME CBT FREE Practice Test - Economics

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An increase in the circulation of money without a corresponding increase in output will lead to _____

A. a rise in income levels   B. stagflation   C. deflation   D. inflation.

The lowering of the exchange rate between a country’s currency and other currencies is known as _____

A. the foreign exchange rate
B. deflation
C. exchange control
D. none of the above.

As a country gets more developed, the percentage of labour engaged in agriculture tends to ____

An advantage of large-scale farming over peasant farming is in the area of ______

A. providing research and massive employment of labour
B. redistributing national income to various regions of the country
C. encouraging the use of traditional implements
D. encouraging urban-rural migration.

One of the reasons why the conditions of supply of a commodity may change is _______

A. a change in real income
B. changes in the technique of production
C. a change of fashion or taste
D. changes in the price of the commodity itself

From the graph above, the consumer will attain equilibrium at point _____

A. J   B. K   C. L   D. M

The commercial banks differ from non-bank financial institutions because they ______

A. contribute to economic development
B. accept deposits withdrawable by cheque
C. mobilize savings
D. invest surplus funds

As a firm increases its output, the average fixed cost _______

(A) tends to rise continuously
(B) remains constant
(C) rises and then falls
(D) tends to decrease continuously.

Suppose that the equilibrium price of an article is N 5.00 but the government fixes the price by law at N 4.00, the supply will be _____

A. the same as the equilibrium supply
B. greater than the equilibrium supply
C. less than the equilibrium supply
D. determined later by government

Upstream oil activities involve the ______

A. management of pollution
B. marketing of refined products
C. exploration of crude oil
D. refining of crude oil.

A typical corporate form of business organization is owned by _________

A. presidents of the country
B. shareholders
C. the general manager and the executives of the business concern
D. a local government

An increase in liquid reserve requirements by the Central Rank of Nigeria will result in _______

A. a reduction in commercial banks’ excess reserves
B. more commercial bank loans to members of the public
C. an increase in commercial banks’ excess reserves
D. no change in commercial banks’ excess reserves E. a reduction in Central Bank's gold reserves.

One of the characteristics of a monopolist is that, he can influence ______

A. quantity produced by other producers
B. prices charged by other producers
C. both price and quantity
D. price or quantity

Which of the following items In the Balance of Payments Account is an invisible transaction?

A. Import of cars    B. Export of cocoa    C. Export of crude petroleum    D. Tourism

In economic analysis, a statement is said to be normative if it _______

A. relates to value judgment   B. is incorrect   C. can be tested scientifically   D. is contradictory

Trade takes place because of ______

A. marginal utility    B. inefficiency in production    C. opportunity cost    D. comparative advantage

The labour force of a country is determined by the ______

A. age structure of the population
B. geographical distribution of the population
C. sex distribution of the population
D. number of people available for work.

Ranking is the method used in measuring _____

A. marginal utility   B. ordinal utility   C. cardinal utility   D. total utility.

The major purpose of African Development Bank is to ______

A. provide loans for trade development
B. provide loans for infrastructural development
C. provide loans for development banks in distress
D. educate peasant farmers in new techniques.

Import substitution aims at ______

(A) substituting agricultural products with industrial ones
(B) substituting imports with agricultural exports
(C) the diversification of industries
(D) improving the balance of payments.

The deflationary gap is defined by _____

A. X    B. K    C. X + K   D. X - K

Which is the most liquid of the following financial assets held by an individual?

A Outstanding balance on the current account of a commercial bank
B. A credit balance on a savings account
C. A crossed postal order
D. An insurance policy

One major factor that determines the location of an industry is _______

A. tax exemption grant    B. its proximity to the market    C. the capital base    D. the social responsibility of the firm.

Given a base year and the price index of 175% the following year, which of the following will arise?

A. The cost of living decreases in that year
B. The cost of living remains unchanged
C. The value of money rises by 75%
D. The value of money falls by 75%.

The expression ‘Terms of Trade' is used to describe ______

A. the quality of exports
B. the direction of foreign trade
C. terms of purchase on deferred payment basis
D. the rate at which exports exchange for imports

A combination of factors responsible for a shift from D0D0 to D1D1 are ______

A. consumers income and change in technology
B. price of the commodity and weather conditions
C. consumers income and population size
D. consumers taste and change in price.

Which of the following sectors of the economy is estimated to be the largest employer of labour in the country?

A. Construction     B. Agriculture     C. Distribution     D. Mining and petroleum

The equilibrium wage in an economy is determined by the ______

(A) public service   (B) workers’ union   (C) rate of inflation   (D) supply and demand for labour.

The advantage of the sole proprietorship is as follows:

A. it is always successful
B. continuity is no problem
C. control and supervision is under one man
D. funds are easy to obtain

An accurate population census is important in order to ________

A. produce more food for the growing population
B. provide employment opportunities for the people
C. estimate a country's per capita income
D. fast track industrial development.

The major determinant of the total volume of output in an economy is the ______

A. level of total expenditure
B. composition of consumer spending
C. number of farmers
D. size of the labour force.

Two basic features common to an industry are

A. production processes and source of capital
B. source of capital and labour supply
C. similarity of products and source of raw materials
D. similarity of products and production processes.

When marginal cost equals marginal revenue product _______

A. the firm is producing at a loss
B. the firm is at a break-even point
C. the firm is making the least profit
D. the firm has maximum profit.

One of the problems arising from the localization of industries is _______

A. high prices of output
B. the exportation of output
C. the scarcity of foreign exchange
D. structural unemployment.

The numerical measure of elasticity is ______

A. $\frac{%\:&space;Change\:&space;in\:&space;Q}{%\:&space;Change\:&space;in\:&space;P}$      B. $\frac{\:&space;Change\:&space;in\:&space;Q}{\:&space;Change\:&space;in\:&space;P}$      C. $\frac{%\:&space;Change\:&space;in\:&space;P}{%\:&space;Change\:&space;in\:&space;Q}$      D. $\frac{\:&space;Change\:&space;in\:&space;P}{\:&space;Change\:&space;in\:&space;Q}$

What is the percentage contribution of services to the national income?

A. 15%   B. 10%    C. 54%   D. 24%

Rent and administrative expenses are examples of ______

A. average fixed costs    B. average variable costs   C. fixed costs   D. variable costs.

When two variables are positively related, the graph of the relationship

A. is a downward-sloping curve
B. has a negative intercept
C. is a straight line
D. is an upward-sloping curve

The long-run average cost curve is called a planning curve because it shows what happens to cost when _____

A. a bigger size of plant is built
B. different sizes of plant built
C. variable inputs are increased
D. fixed factors are increased

In the short run, a firm’s marginal cost curve above the point of shut-down is its _______

(A) demand curve   (B) revenue curve   (C) cost curve  (D) supply curve.

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