JAMB UTME - Economics - 2023

The "velocity" of money is

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Velocity of money is the total amount of money in circulation in an economy. It is calculated as Velocity of money = GDP/Money Supply

The term 'investment' in macroeconomics means

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Investment is an activity of spending resources on creating assets that can generate income over a long period of time. It is flow of expenditures developed to projects producing goods which are intended for immediate consumption.

The part of income after tax that is not consumed is defined as

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The part of income after tax that is not consumed is defined as saving. Saving refers to the portion of income that is not spent on immediate consumption and is instead put aside for future use.
When we receive our income, we typically have various expenses to cover, such as bills, groceries, and entertainment. After deducting these expenses and taxes, we are left with a certain amount of money. If we choose not to spend this remaining amount and instead keep it for later, we are saving that money.
Saving is important because it allows us to build up financial security and prepare for unexpected expenses or future goals. It can also be used for long-term investments, such as buying a house or planning for retirement.
In summary, saving is the part of our income that we choose to set aside rather than using it immediately for consumption.

If demand function for a product is Qd = 30 - 4P, and the price and quantity of products is 4 and 14 respectively. What is the price elasticity of demand for the product?

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Q = 14, P = 4

Qd = 30 - 4p

∆q/∆p = - 4
 

Ed = ΔqΔp×pq $\frac{<br>}{}$

= - 4 x 4/14

= Ed = -1.14
since price elasticity is positive, then Ed = 1.14

A ............ in the price of the domestic currency in terms of a foreign currency is referred to as .............

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Currency depreciation is a fall in the value of a currency in a floating exchange rate system. Therefore, a decrease in the price of the domestic currency in terms of a foreign currency is referred to as depreciation.

Suppose the public expenditure as a percentage of GDP of four countries is shown in the table below

Which type of economy exists in these countries?

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The type of economy that exists in these countries is Mixed economy.

A mixed economy is an economic system that combines elements of both market and planned economies. It includes both private and public sectors, and the government plays a significant role in regulating and defining the structure of the economy.

In the given scenario, the fact that the countries have different levels of public expenditure as a percentage of GDP indicates that the government plays a role in the economy and is involved in spending a portion of the national income.

While the exact percentage of public expenditure varies between the countries, the presence of any public expenditure suggests government intervention and regulation in the economy. This means that these countries have a mixed economy, where both public and private sectors coexist and contribute to economic activities.

The government's involvement can take various forms, such as funding public goods and services, implementing social programs, and regulating industries. The level of government intervention may vary, but the presence of public expenditure indicates that the government has an active role in shaping the economy.

Therefore, based on the information provided, it can be concluded that the countries mentioned in the table have a mixed economy.

The number of people who are qualified to work and who offered themselves for employment are called

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The correct term for the number of people who are qualified to work and who offer themselves for employment is the working population.
The working population refers to the subset of the total population that is actively engaged or seeking employment. It includes individuals who are qualified, available, and willing to work. This encompasses both employed individuals and those who are actively looking for work, such as job seekers.
The working population is an important measure for understanding the labor market. It helps policymakers, businesses, and economists in assessing the job market's health and determining factors such as employment rates, labor force participation, and unemployment rates.
Options like "mobility of labor" and "migrant labor" focus on the movement of workers between different locations, which is a related concept but not the same as the total number of qualified individuals available for employment. "Labor turnover" refers to the rate at which workers leave and join a particular company or industry, which is also not synonymous with the working population as a whole.
Therefore, the working population is the term that correctly describes the number of qualified individuals who are available for employment.

The diagram above represent

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The dotted line in the graph above represent the upturn and downturn of the econonmy. Therefore, the diagram is cyclical unemployment.

The diagram above represent

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The diagram above represents the production possibility curve.
The production possibility curve shows the different combinations of goods and services that can be produced given the available resources and technology.
On the curve, each point represents a specific combination of goods and services that can be produced. Points on the curve are considered efficient because all available resources are fully utilized. Points inside the curve represent inefficient production because resources are not fully utilized. Points outside the curve represent combinations that are currently unattainable given the available resources and technology.
In summary, the production possibility curve helps us understand the trade-offs and limitations in production based on available resources and technology. It is a visual representation of the production possibilities in an economy.

Overpopulation is caused by

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The causes of overpopulation are: falling mortality rate, underutilized contraception, lack of female education etc.

The maximum price is

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The maximum price is **P4**. To explain why, we need to understand that the prices are listed in ascending order. This means that **P1** is the lowest price and **P4** is the highest price. When we say "maximum price," we are referring to the highest possible price among the given options. In this case, **P4** is the highest price listed. Therefore, the maximum price is **P4**.

Indicator of underdevelopment is

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An indicator of underdevelopment is low per capita income. Per capita income refers to the average income earned by individuals in a country. In underdeveloped countries, the per capita income is generally low, meaning that people have lower incomes on average compared to developed countries.
Low per capita income is a significant indicator of underdevelopment because it directly affects the standard of living of people within a country. With low income, individuals have limited purchasing power, making it difficult for them to afford basic necessities such as food, clothing, and shelter. This can lead to overall poor living conditions and a lack of access to essential services like healthcare and education.
Additionally, low per capita income also implies limited economic opportunities and a weak economy. It suggests that the country's productivity and industrial development are low, leading to low wages and limited job opportunities. This can result in high levels of poverty and unemployment, further hindering the country's development.
In summary, low per capita income is a crucial indicator of underdevelopment because it reflects the overall economic situation of a country and directly impacts the living conditions and opportunities available to its citizens.

Among all the determinants of economic growth, the most important one is

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The Gross Domestic Product is the total monetary or market value of all the goods and services produced within a country. It is used to measure the rate of growth in an economy.

Public corporation is financed with

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Public corporations are run by the government through the tax paid by the people. They are established by an act of parliament or decree and it is controlled by the board of directors, appointed by the government.

Government uses all of the following ways to redistribute income, except

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The government uses various methods to redistribute income in society. Three of these ways are market intervention, transfer earnings, and taxation. Market intervention involves the government stepping in and regulating certain aspects of the economy to ensure fairness and reduce income inequality. For example, the government may set a minimum wage so that workers are guaranteed a certain level of income. Transfer earnings refer to government programs that provide financial assistance to individuals or families who are in need. These programs include welfare, unemployment benefits, and social security. The goal is to provide support to those who may have lower incomes or are facing financial difficulties. Taxation is another method used by the government to redistribute income. Through taxes, the government collects money from individuals and businesses based on their income or profits. This revenue is then used to fund public services such as healthcare, education, infrastructure, and social programs. However, the answer to the question is that the government does not use limited liability as a way to redistribute income. Limited liability is a legal concept that protects individuals from being personally liable for the debts and liabilities of a company. It is not directly related to income redistribution. In summary, the government redistributes income through market intervention, transfer earnings, and taxation. These methods aim to promote fairness and provide support to those in need. However, limited liability is not a method used for income redistribution.

The development of an economic hypothesis through intuition, insight, or logic is associated with

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Normative economics is a perspective on economics that reflects normative, or ideologically prescriptive judgments toward economic development, investment projects, statements, and scenarios. It expresses ideological judgments about what may results in economic activity if public policy changes are made.

Which of the following shows why individual demand curve for a good usually slopes downward from left to right?

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A normal demand curve slopes downward from left to right indicating at higher price, less quantity will be demanded and vice versa.

Multiplier can be described as

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A multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable such as investment, consumption, government expediture etc.

The fundamental problem of economics is

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The fundamental problem of Economics is Scarcity. Scarcity explains the basic economic problem that the world has limited or scarce resources to meet seemingly unlimited wants, and this reality forces people to make decisions about how to allocate resources in the most efficient way.

When a kilogram of carrot is #8.00, 20 kilograms are demanded and when the price decreased to #6.000 per kilogram, 30 kilograms are demanded. The elasticity of demand equals to

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To calculate the elasticity of demand, we need to compare the changes in price and quantity demanded.
First, let's calculate the percentage change in price:
% change in price = ((new price - old price) / old price) x 100
% change in price = ((6 - 8) / 8) x 100
% change in price = (-2 / 8) x 100
% change in price = -25%
Next, let's calculate the percentage change in quantity demanded:
% change in quantity demanded = ((new quantity demanded - old quantity demanded) / old quantity demanded) x 100
% change in quantity demanded = ((30 - 20) / 20) x 100
% change in quantity demanded = (10 / 20) x 100
% change in quantity demanded = 50%
Now, let's calculate the elasticity of demand:
Elasticity of demand = % change in quantity demanded / % change in price
Elasticity of demand = 50% / -25%
Elasticity of demand = -2
The elasticity of demand is -2.
Explanation:
The negative sign in the elasticity of demand (-2) indicates that the demand for carrots is price elastic. This means that a decrease in price by 1% will lead to a more than proportionate increase in quantity demanded by 2%. In simpler terms, when the price of carrots decreased by 25%, the quantity demanded increased by 50%.
Therefore, the elasticity of demand is -2, which means that the demand for carrots is price elastic.

But since price elasticity is always represented with a positive number, the answer is 2

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An example of a free good is water in the ocean.

A free good is a good that is available in unlimited supply and does not require any payment or exchange to obtain it.

In the case of water in the ocean, it is freely available and accessible to anyone. It is not owned by anyone and does not require any payment to access or use it. Therefore, it can be considered a free good.

On the other hand, free education, dinner you did not pay for, and your rented apartment are not examples of free goods.

Free education typically refers to education that is provided without direct payment by the student. While it may be free for the student, someone is still paying for it, such as the government or private institutions.

A dinner that you did not pay for may seem free to you, but someone, such as a friend or a host, is still paying for it. The cost of that dinner is borne by someone else, even if it is not you.

Similarly, a rented apartment is not a free good because it involves a transaction where you pay for the use of the apartment. You enter into a contractual agreement with the landlord and pay rent in exchange for living in the apartment.

Which of the following will cause an increase in cost of production?

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Cost push inflation occurs when overall prices increase(inflation) due to increases in the cost of wages and raw materials. It can also occur when higher costs of production decrease the aggregate supply in the economy.

One major problem facing West African countries is

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One of the major problem of West African state is the relation of West African states with the colonial masters.

------------- is NOT the cause of balance of payments (BOP) deficits in Nigeria

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The causes of balance of payment deficit are: low level of agriculture, low level of technological development, inadequacies in export promotion strategy, political instability, poor social and economic infrastructure, servicing of huge external debts, existence of import dependent industries etc.

Which of the following is an example of expansionary monetary policy by the Central Bank of Nigeria?

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An example of expansionary monetary policy by the Central Bank of Nigeria is "buying Treasury securities from commercial banks." Expansionary monetary policy is a type of policy implemented by the central bank to stimulate economic growth and increase the supply of money in the economy. This policy is typically used during times of economic downturn or recession to encourage spending and investment. When the Central Bank of Nigeria buys Treasury securities from commercial banks, it injects money into the economy. This increases the amount of money available in the banking system, making it easier for banks to lend to businesses and individuals. By increasing the money supply, the central bank aims to lower interest rates, which in turn encourages borrowing and spending. Lower interest rates mean that businesses and individuals can access credit more easily, leading to increased investment, consumer spending, and economic growth. This expansionary policy can help support economic activity, boost employment, and stimulate overall economic recovery.

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The marginal propensity to consume (MPC) is a measure of how much of an increase in income is typically spent on consumption. It is represented by the symbol c or ΔC/ΔY. To explain it simply, the MPC tells us the proportion of additional income that is used for consumption rather than saving or other purposes. For example, if the MPC is 0.8, it means that for every additional unit of income, 0.8 units are typically spent on consumption. The MPC can also be understood as the slope of the consumption function. The consumption function is a mathematical relationship between income and consumption. The MPC represents how much consumption changes for a given change in income. In the equation C = C + cYd, the coefficient c represents the MPC. This equation shows that consumption (C) is determined by autonomous consumption (C) plus the product of the MPC (c) and disposable income (Yd). In summary, the MPC is a measure of how much additional income is typically used for consumption. It can be represented as ΔC/ΔY, the slope of the consumption function, or the coefficient c in the consumption equation.

.............is presently used in Nigeria to measure inflation

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The measure that is presently used in Nigeria to measure inflation is the Consumer Price Index (CPI). The CPI is a commonly used indicator worldwide to track changes in the cost of living over time.
The Consumer Price Index (CPI) measures the average price changes of a basket of goods and services typically purchased by households in a specific country or region. It reflects the price movements of essential items such as food, housing, transportation, healthcare, education, and many other goods and services that people consume regularly.
The CPI is calculated by collecting price data for various items in the basket and assigning them weights based on their relative importance in household spending. The prices are then compared to a base period, which is usually a specific year. The percentage change in the CPI from the base period indicates the rate of inflation or deflation.
In Nigeria, the CPI is used to monitor and analyze changes in the cost of goods and services, allowing policymakers and economists to assess the impact on consumers' purchasing power and make informed decisions. It helps in determining the effectiveness of government policies, evaluating the performance of the economy, and adjusting wages and prices.
By tracking the CPI, the government can identify if there is an increase in the general level of prices, indicating inflation, or a decrease, indicating deflation. This information helps in formulating monetary and fiscal policies to control inflation rates and maintain price stability.
Overall, the Consumer Price Index (CPI) is the measure currently used in Nigeria to gauge inflation and is crucial in understanding how the cost of living changes over time, impacting the economy and the daily lives of individuals and businesses.

An increase in nominal income without increase in price will result to

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An increase in nominal income without an increase in prices will result in an **increased real income**. Nominal income refers to the amount of money a person earns or receives in a given period, without taking into account changes in prices. On the other hand, real income takes into consideration the effects of inflation by adjusting for changes in prices. When nominal income increases but prices remain constant, it means that the purchasing power of an individual's income has increased. In other words, they can afford to buy more goods and services with the same amount of money. This increase in purchasing power leads to an increase in real income. For example, let's say a person's nominal income is $1,000 per month, and the prices of goods and services they consume also remain constant. If their nominal income increases to $1,200 per month, without any increase in prices, they now have an additional $200 to spend on other things. This additional purchasing power translates to an increase in their real income. It is important to note that an increase in nominal income without an increase in prices does not necessarily lead to an **increased GDP** or a **decreased GNP**. GDP (Gross Domestic Product) measures the total value of goods and services produced within a country's borders, while GNP (Gross National Product) measures the total value of goods and services produced by a country's residents, including those produced abroad. The increase in real income of individuals does not automatically impact the overall production levels captured by GDP or GNP.

A major factor contributing to productivity is

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Labour is by far the most common of the factors used in measuring productivity. One reason for this is, of course, the relatively large share of labour costs in the value of most products.

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To find the value of L when the supply (s) is equal to 20, we can use the given supply curve equation: S = 4L + 8.
The supply curve equation represents how much labor (L) will be supplied at a given wage rate (s). In this case, the equation tells us that the supply of labor is equal to 4 times the quantity of labor (L) plus 8.
To find L when s = 20, let's substitute s = 20 into the equation:
20 = 4L + 8
Next, let's isolate L by subtracting 8 from both sides of the equation:
20 - 8 = 4L
Simplifying further:
12 = 4L
Now, we need to solve for L. We can do this by dividing both sides of the equation by 4:
12/4 = 4L/4
Simplifying again:
3 = L
Therefore, when the supply (s) is equal to 20, the value of L is 3.
So the correct answer is 3.

Economists refer to private goods as

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Private goods are referred to as rivalrous and excludable by economists. Let me explain what this means in a simple and comprehensive way.
When a good is rivalrous, it means that one person's use or consumption of the good diminishes its availability for others. For example, if you eat an orange, there is now one less orange for someone else to consume. The consumption of the orange by one person reduces the availability of the orange for others.
On the other hand, when a good is excludable, it means that it is possible to prevent someone from using or consuming that good if they do not pay for it. For instance, if you go to a movie theater and buy a ticket, you are allowed entry to watch the movie. However, if you do not buy a ticket, you will be excluded from watching the movie.
Private goods possess both of these characteristics. They are rivalrous because one person's use or consumption of the good reduces its availability for others. For example, if you buy a car, only you can use it at any given time, and someone else cannot simultaneously use it. Private goods are also excludable because it is possible to prevent others from using or consuming the good if they do not pay for it. For instance, if you purchase a book, you have exclusive access to read it unless you choose to share it with someone.
In summary, private goods are referred to as rivalrous and excludable because their consumption diminishes their availability for others, and it is possible to exclude others from using or consuming them if they do not pay for them.

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The short run can be defined as the period of time during which at least one of the firm's inputs is fixed. In other words, it is a time frame in which the firm cannot easily or quickly adjust all of its inputs. This means that some resources, such as the size of a factory or the number of employees, cannot be changed in the short run.
During the short run, firms can only adjust their production levels by varying the amount of variable inputs, such as raw materials or utilities. The fixed input, which remains constant in this period, imposes limitations on the firm's ability to increase or decrease its output. This constraint on adjusting all inputs is what distinguishes the short run from the long run, where all inputs can be varied.
It is important to note that the length of the short run can vary depending on the industry and the specific circumstances of the firm. For some businesses, the short run may be a few months, while for others it could be several years. However, what remains consistent is that during the short run, the firm is restricted in its ability to modify certain inputs, which can impact its production and overall performance.

Economic problem occurs when

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The economic problem occurs when there is scarcity relative to demand. Scarcity means that resources are limited, while demand refers to people's desires and needs for goods and services. In simple terms, the economic problem arises when there are not enough resources to satisfy everyone's wants and needs. This is because resources, such as land, labor, and capital, are finite, while people's desires are infinite. For example, imagine a small community with a limited amount of food available. If everyone in the community wants to eat, but there is not enough food for everyone, it creates an economic problem. This scarcity can lead to competition, as individuals and businesses try to obtain the limited resources. The economic problem is not caused by raw materials being imported or people being out of work. These factors can contribute to a country's economic challenges, but they are not the direct cause of the economic problem. Similarly, the absence of buyers for goods is a symptom of the economic problem, rather than the cause. If people cannot afford or do not want to buy goods, it indicates a mismatch between supply and demand. However, this does not explain why the economic problem exists in the first place. In summary, the economic problem occurs when there is scarcity relative to demand, meaning there are not enough resources to fulfill everyone's wants and needs. This scarcity leads to competition and the need for individuals and businesses to make choices regarding resource allocation.

Part-time workers who desire full-time employment are:

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Part-time workers who desire full-time employment are classified as underemployed and contribute to the unemployment statistic.
Underemployment refers to a situation where individuals are working fewer hours than they would like or in jobs that do not utilize their skills and qualifications fully. In this case, part-time workers who desire full-time employment are considered underemployed because they are not able to secure the desired amount of work hours.
These underemployed workers contribute to the unemployment statistic because they are actively seeking additional work hours to meet their employment needs. They are considered part of the labor force because they are willing and available to work more hours, but they have not been able to find full-time employment.
It is important to note that not all underemployed workers contribute to the unemployment statistic. Some may choose to work part-time for personal reasons, such as family responsibilities or pursuing education. These individuals, although underemployed, are not actively seeking additional work hours and therefore do not contribute to the unemployment statistic.
However, in the case of individuals who are part-time workers and desire full-time employment, their underemployment status reflects the inadequacy of available job opportunities. They increase the count of unemployed individuals because they are willing and actively searching for additional work.
It is worth mentioning that cyclical unemployment is a different type of unemployment. It occurs when there is a downturn in the economy, causing a decrease in overall demand for goods and services, and subsequently, a decrease in the demand for labor. Cyclical unemployment is not directly related to the part-time workers' desire for full-time employment.

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- Monetary policy is implemented by reducing the interest rates in the economy in order to increase the supply of money to enhance growth.

- The fiscal policy is implemented by the reduction of taxes and increasing government spending in order to boost demand.

- Policymakers may choose to implement a stabilization policy to close the recessionary gap and increase real GDP.

In a two by two model of international trade, it is assumed that

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In a two by two model of international trade, it is assumed that **both countries could gain from trade at the same time, but the volume of the gains depends on terms of trade**. This means that both countries can benefit from engaging in trade with each other. Trade allows both countries to specialize in producing and exporting the goods in which they have a comparative advantage, while importing goods that they are less efficient at producing. This leads to increased efficiency and overall economic gains for both countries. However, the volume of the gains from trade depends on the terms of trade between the two countries. The terms of trade refer to the ratio at which the countries exchange their goods. If one country has a higher bargaining power or can produce goods at a lower cost, they may negotiate more favorable terms of trade, leading to a larger volume of gains for that country. On the other hand, if the terms of trade are less favorable, the volume of gains for both countries may be smaller. In summary, while both countries can benefit from trade, the extent of the gains will vary depending on the terms of trade negotiated between them.

Institutions serving as links between surplus and deficit units can be identified as

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Financial intermediaries serve as links between surplus and deficit units in an economy. These intermediaries include banks, credit unions, and other financial institutions. When there is surplus money in the economy, individuals and businesses deposit the excess funds with financial intermediaries. These intermediaries then pool these funds together and make them available to deficit units, such as individuals or businesses in need of loans or financing. Financial intermediaries play a crucial role in the economy by efficiently allocating funds from surplus units to deficit units. They match the needs of borrowers with the resources of savers, helping to facilitate economic growth and development. Tax officers and pension offices, on the other hand, do not serve as direct links between surplus and deficit units. Tax officers collect taxes for the government, while pension offices manage pension funds for retired individuals. Although these entities may indirectly impact the allocation of funds in the economy, their primary roles are different from that of financial intermediaries. Acceptance houses are also not direct links between surplus and deficit units. Acceptance houses provide short-term financing through the purchase of bills of exchange. While they play a role in facilitating trade between businesses, their function is more specific and limited compared to the broader role of financial intermediaries. In summary, financial intermediaries such as banks and credit unions serve as the primary links between surplus and deficit units in an economy. They gather surplus funds from savers and make them available to borrowers, thereby promoting the efficient allocation of resources.

Which of the following Age group belongs to active Labour force?

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The age group that belongs to the active labor force is the **18 - 64 years** category. This age range is generally considered to be the working-age population, as it encompasses individuals who are old enough to work and have not yet reached the age of retirement. People in this age group are typically in their prime working years, where they have the physical ability and the necessary skills and knowledge to actively participate in the labor market. They are often seeking employment, working in various industries or sectors, and contributing to the economic growth and development of their country. It is important to note that the specific age range considered as the working-age population may vary slightly across different countries or regions. However, in most cases, it generally falls within the **18 - 64 years** age bracket. On the other hand, the other age groups mentioned in the options are not typically considered as part of the active labor force: - The **0 - 17 years** age group consists of individuals who are below the legal working age and are typically attending school or dependent on others for their livelihood. - The **15 - 25 years** age group partially overlaps with the working-age population, but it includes individuals who may still be in school or pursuing higher education. While some individuals within this age range may be actively seeking employment or working part-time, they are generally not considered as the core active labor force. - The **65 years and above** age group represents individuals who have reached the retirement age or are eligible for retirement benefits. While some individuals in this age range may continue to work, either out of choice or due to financial circumstances, they are not considered as the primary active labor force. In summary, the **18 - 64 years** age group is the one that belongs to the active labor force, consisting of individuals who are in their prime working years and actively participating in the labor market.

When a generalization is made based on observed facts, it is

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When a generalization is made based on observed facts, it is called inductive reasoning. Inductive reasoning involves drawing conclusions from specific instances or examples to come up with a general statement or theory. This means that we observe a pattern or trend from the evidence we have and then make a generalization or inference based on that pattern. Inductive reasoning is different from deductive reasoning, which involves starting with a general statement or theory and then using it to predict or explain specific instances. In inductive reasoning, we start with specific observations and use them to make a broader generalization. It is important to note that while inductive reasoning can often lead to accurate conclusions, it is not always guaranteed to be correct. However, it is a common and useful method used in many fields such as science, sociology, and psychology.

The principle that specified that the amount, when and how to pay tax should be made known to tax payer is known as

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The principle that specifies that the amount, when, and how to pay tax should be made known to the taxpayer is known as the Principle of Certainty. This principle ensures that taxpayers have a clear understanding of their tax obligations, which includes knowing the amount of tax they owe, the deadline for payment, and the method of payment.
The Principle of Certainty is important because it promotes transparency and accountability in the tax system. By providing clear and specific information to taxpayers, it enables them to accurately calculate and plan for their tax obligations. This helps to avoid confusion or misunderstandings between the taxpayer and the tax authorities.
Furthermore, the Principle of Certainty also ensures fairness and consistency in the tax system. By clearly stating the rules and requirements, it ensures that all taxpayers are treated equally and that there is no ambiguity or room for arbitrary decisions in the tax assessment process.
Overall, the Principle of Certainty provides a solid foundation for the relationship between taxpayers and tax authorities. It establishes clear expectations, promotes compliance, and adds credibility to the tax system.