Economics Past Questions and Answers

What happens when the central bank increases the bank rate in an economy

A Borrowing is discouraged
B Customers increase their borrowing
C Banks can increase their lending
D Money supply increases

Question 32:

In order to increase revenue, government should tax commodities for which demand is

A Perfectly price inelastic
B Price inelastic
C Price elastic
D Unitary elastic

Question 33:

The figure above shows change in demand for commodity x which is a normal good. Use it to answer the questions that follows

Which of the following caused the change in demand from D0 D0 to D2 D2?

A Fall in income of consumer
B Rise in the price of a substitute
C Rise in the price of a complement
D Fall in the supply of commodity x

Question 34:

Which of the following activities will not lead to economic growth?

A Massive importation of capital goods
B Intensive capital formation
C Use of modern technology
D Massive importation of consumer goods

Question 35:

Nation engage in external trade because of difference in

A Comparative cost
B Absolute cost
C Fixed cost
D Variable cost