All practice questions

A developing nation decides to channel most of its public investment into heavy infrastructure and energy sectors in order to generate strong forward and backward linkages across the economy, rather than attempting simultaneous development in all sectors. Which development planning strategy is best illustrated by this approach?

A customer deposits a fresh primary cash sum of $\text{₦}400,000$ into a commercial bank. If the central bank mandates a legal cash reserve ratio of $12.5\%$, what is the maximum amount of net credit (loans) created by the banking system?

Under a newly revised tax policy, an earner whose gross income rises from $\text{N}800,000$ to $\text{N}1,600,000$ sees their total annual tax liability increase from $\text{N}96,000$ to $\text{N}160,000$. Based on the effective tax rates, which taxation system does this policy represent?

Following the deregulation of Nigeria's telecommunications sub-sector in 2001, the market transitioned from a state-monopolized structure under the Nigerian Telecommunications Limited (NITEL) to a competitive market driven by private Digital Mobile License (DML) operators. Which of the following best analyzes the primary macroeconomic impact of this regulatory reform on the Nigerian economy?

A commercial cassava processing firm operates under a linear supply function $Q_s = a + bP$, where $Q_s$ represents the quantity supplied in bags and $P$ represents the market price per bag in Naira ($\text{N}$). Operational market records show that when the price of cassava flour was $\text{N}400$, the firm supplied $1,200\text{ bags}$. When the market price rose to $\text{N}550$, the quantity supplied increased to $1,800\text{ bags}$ in accordance with the law of supply. What is the reservation price (the minimum threshold price) below which the firm will offer zero bags to the market?

An agro-processing enterprise in Anambra State uses raw cassava tubers as the main factor input to manufacture either garri for household food consumption or industrial ethanol for bio-fuel blending. Following a policy shift that significantly boosts the market price of industrial ethanol, the enterprise reallocates its raw cassava supply and processing capacity toward ethanol production. What is the immediate impact on the supply of garri, and which type of supply relationship does this scenario demonstrate?

An economy initially has a money supply of ₦$2,000$ million and a velocity of money circulation of $4$. Following financial sector reforms, the money supply expands by $25\%$ while the velocity of circulation rises to $5$. If the total volume of real economic transactions remains constant at $500$ million units, what is the new general price level according to Fisher's Quantity Theory of Money?

The national statistics bureau of a developing economy released the following macroeconomic estimates for a given financial year:

If the Net National Product at factor cost ($NNP_{fc}$) for the economy was calculated as $\$960$ million, what was the value of Private Final Consumption Expenditure ($C$)?

A commercial town has a total money supply ($M$) of ₦2,000 with a velocity of circulation ($V$) of $4$. If the physical volume of transactions ($T$) in the town is $400$ units, what is the general price level ($P$) based on Fisher's Quantity Theory of Money equation ($MV = PT$)?

An economy is currently operating at point $A$ on its Production Possibility Curve, producing $120$ units of consumer goods and $50$ units of capital goods. To meet a new production target, the economy shifts resources to point $B$, increasing the production of capital goods to $80$ units, while consumer goods production drops to $90$ units. What is the opportunity cost of producing the additional capital goods, expressed in units of consumer goods?

Match each type of economic planning listed on the left with its defining operational feature or target horizon on the right.

An economy's external trade data for a given fiscal year is presented below:

• Exports of agricultural and manufactured goods: $620 million • Imports of machinery and raw materials:$ 780 million
• Receipts from international shipping and banking services: $110 million • Payments for foreign tourism and insurance:$ 60 million
• Inflow of foreign direct investment: $250 million

Based on the data provided, what is the economy's Balance of Trade?

To achieve maximum total profit in the short run, a monopolist will expand output up to the point where which of the following conditions is satisfied?

Under third-degree price discrimination, a profit-maximizing monopolist allocating output between two separated sub-markets with identical marginal costs will set a higher price in the sub-market exhibiting a higher price elasticity of demand.

An economy recorded the following national income components for a given fiscal year:

Using the income method of measuring national income, what is the Gross Domestic Product at factor cost (in ₦ million)?

In consumer theory, the absolute slope of a budget line representing Good X on the horizontal axis and Good Y on the vertical axis measures which of the following?

The following financial data (in millions of dollars) was extracted from the national income accounting records of a nation for a given fiscal year:

Based on the information provided above, calculate the Net National Product at factor cost ($NNP_{FC}$) in millions of dollars.

Tunde has $₦50,000$ saved and must choose between buying a laptop needed for an online coding course and buying a smartphone for personal entertainment. If Tunde decides to purchase the laptop, what is the opportunity cost of his decision?

Match each basic economic problem or resource allocation concept on the left with the primary mechanism used to resolve it within its corresponding economic system on the right.

Match the following classifications of monopoly origins with their correct underlying economic descriptions.