ECONOMICS EXAM

QUESTIONS FOR SS2

THIRD TERM
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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
 1. 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

2. 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

3. All the following are methods of determining prices except

(a)maximum pricing (b) rationing (c) minimum pricing (d) auctioning

4. When the demand for foreign exchange exceeds its supply, the value
of the domestic currency (a) appreciates (b) depreciates (c) remains
unchanged (d) expands

5. 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

6. 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

7. The value of money is affected by the (a) speculative motive (b) price
level (c) precautionary motive (d)intervention of development banks

8. 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

9. 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

10. The main item traded on a Stock Exchange Market is (a) treasury bills
(b) travellers’ cheques (c) foreign currencies (d) new shares

11. 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

12. 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

13. 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.
14. 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

15. 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

16. 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

17. 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

18. 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

19. Which of the following cannot be described as Land? (a) Forest (b)
diamond (c) roads (d) crude oil.

20. 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

21. 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.

22. 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.

23. Mono-product economics are those that produce (a) only

international products (b) petroleum products (c) agricultural
products (d) one main commodity

24. 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

25. Money will serve as a standard of deferred payment if it is (a)

homogeneous (b) durable (c) easily recognized (d) stable in value
26. 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

27. 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

28. Human wants are unlimited because (A) Production is inadequate

(B) resources have alternative uses (C) new wants always arise (D)
resources are limited

29. The demand for money is described as a (a) competitive demand (b)
joint demand (c) derived demand (d) composite demand

30. Which of the following is involved in the money market? (a) building
society (b) development banks (c) commercial banks (d) stock
exchange

31. 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

32. A basic economic problem of any society is (A) High level of illiteracy
(B) irregular power supply (C) population growth (D) resource
allocation

33. State owned enterprises are more common in (A) centrally planned
economies (B) mixed economies (C) capitalist economies (D)
developed economies

34. 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

35. 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

36. 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
37. 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

38. 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

39. 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

40. A shift in the demand curve indicates (A) exceptional demand (B)
change in demand (C) change in quantity demanded (D) elasticity of
demand

41. 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

42. 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.

43. Goods which have to be paid for are known as (A) physical goods (B)
economic goods (C) free goods (D) intangible goods.

44. 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

45. 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

46. 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

47. 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
 48. 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

49. 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.

50. 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.

Income Per Tax rate Disposable income

Profession
Month($) (%) ($)

Doctor 8,000 10

Engineer 7,000 12

Civil
5,000 18
Servant

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?

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 Third Term CIVIC EDUCATION
Examination EXAM
Questions QUESTIONS FOR
2019/2020 SS2 FIRST TERM
Session for all
Subject – Junior
Secondary School
( JSS 1, JSS 2)

(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