Economics Past Questions and Answers

Gresham's law in economics shows that

A Bad money drives good money out of circulation
B Good money drives bad money out of circulation
C Gold must be available to maintain the value of paper money
D The price level varies directly with the quality of money

Question 822:

Given that the cash reserve ratio is 10 percent, what is the maximum amount of that the banking system can create from an initial cash deposit of N1,000.00?

A N100.00
B N1,000.00
C N9,000.00
D N10,000.00

Question 823:

The most important economic characteristic differentiating commercial banks from other financial institutions is their?

A Function as a safe and profitable store place for savings
B Role in financing balance of payment deficits
C Status as an intermediary between savers and borrowers
D Ability to create and destory money

Question 824:

Deflation 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

Question 825:

Which of the following causes of inflation is related to demand-pull inflation?

A Low productivity on farms and in firms
B Poor storage facilities
C Poor distribution system
D Increase in expenditure on construction