JAMB Economics questions: Money and inflation

17 questions with answers and explanations. Tap an option to check yourself.

1. Question 1· Money and inflation· JAMB

   A ₦1,000 note can be changed into smaller notes for small purchases. This quality of money is

   • Adivisibility
   • Bdurability
   • Cportability
   • Dscarcity

   Show answer

   Explanation and discussion

2. Question 2· Money and inflation· JAMB

   Demand-pull inflation occurs when

   • Aimports rise
   • Bcosts rise
   • Cwages fall
   • Daggregate demand exceeds aggregate supply

   Show answer

   Explanation and discussion

3. Question 3· Money and inflation· JAMB

   Near money includes

   • Acoins only
   • Bsavings deposits and treasury bills
   • Cbarter goods
   • Dcowries

   Show answer

   Explanation and discussion

4. Question 4· Money and inflation· JAMB

   Cost-push inflation is caused by

   • Aa rise in unemployment
   • Btoo much money chasing too few goods
   • Ca fall in demand
   • Drising costs of production such as wages and raw materials

   Show answer

   Explanation and discussion

5. Question 5· Money and inflation· JAMB

   Money that has value because government declares it legal tender is

   • Acommodity money
   • Bfiat money
   • Cbarter
   • Dnear money

   Show answer

   Explanation and discussion

6. Question 6· Money and inflation· JAMB

   Keynes's liquidity preference theory states that the rate of interest is determined by

   • Athe stock of gold
   • Bsavings and investment only
   • Cgovernment decree
   • Dthe demand for and supply of money

   Show answer

   Explanation and discussion

7. Question 7· Money and inflation· JAMB

   Inflation hurts which group most?

   • Apeople on fixed incomes, such as pensioners
   • Bdebtors
   • Cowners of property
   • Dproducers of goods

   Show answer

   Explanation and discussion

8. Question 8· Money and inflation· JAMB

   Inflation is

   • Aa fall in the general price level
   • Ba persistent rise in the general price level
   • Ca rise in the price of one good
   • Dan increase in employment

   Show answer

   Explanation and discussion

9. Question 9· Money and inflation· JAMB

   Hyperinflation is

   • Astable prices
   • Ba mild rise in prices
   • Ca fall in prices
   • Dextremely rapid inflation that destroys confidence in money

   Show answer

   Explanation and discussion

10. Question 10· Money and inflation· JAMB

    Demand-pull inflation is caused by

    • Arising costs of raw materials
    • Btoo much money chasing too few goods
    • Ca fall in money supply
    • Dhigh unemployment

    Show answer

    Explanation and discussion

11. Question 11· Money and inflation· JAMB

    Inflation can be controlled by

    • Acutting taxes sharply
    • Bincreasing money supply
    • Creducing money supply and government spending
    • Draising wages

    Show answer

    Explanation and discussion

12. Question 12· Money and inflation· JAMB

    A persistent fall in the general price level is called

    • Adeflation
    • Binflation
    • Cdevaluation
    • Dstagflation

    Show answer

    Explanation and discussion

13. Question 13· Money and inflation· JAMB

    Stagflation is a situation of

    • Arapid growth with no inflation
    • Bfalling prices and growth
    • Cstable prices and full employment
    • Drising prices together with stagnant output and high unemployment

    Show answer

    Explanation and discussion

14. Question 14· Money and inflation· JAMB

    The motives for holding money, according to Keynes, are transactions, precautionary and

    • Atax
    • Binvestment
    • Cexport
    • Dspeculative

    Show answer

    Explanation and discussion

15. Question 15· Money and inflation· JAMB

    According to the quantity theory of money (MV = PT), if the money supply doubles while V and T remain constant, the price level will

    • Aremain constant
    • Bhalve
    • Cdouble
    • Dquadruple

    Show answer

    Explanation and discussion

16. Question 16· Money and inflation· JAMB

    The real value of money falls when

    • Ainterest rates fall
    • Bprices fall
    • Cthe general price level rises
    • Doutput rises

    Show answer

    Explanation and discussion

17. Question 17· Money and inflation· JAMB

    The main motive for holding money to buy everyday goods is the

    • Atransactions motive
    • Bprecautionary motive
    • Cspeculative motive
    • Dprofit motive

    Show answer

    Explanation and discussion