JAMB and WAEC Economics questions: Money and inflation

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

1. Question 1· Money and inflation· WAEC

   When prices of most goods keep rising over a long period, people on fixed incomes

   • Alose purchasing power
   • Bgain purchasing power
   • Cpay no tax
   • Dare unaffected

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   Explanation and discussion

2. Question 2· Money and inflation· WAEC

   Which function of money allows the worth of a goat and a bag of rice to be compared?

   • Astore of value
   • Bmedium of exchange
   • Cmeasure of value
   • Dstandard of deferred payment

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3. Question 3· Money and inflation· WAEC

   The value of money is

   • Athe paper it is printed on
   • Bwhat it can buy
   • Cits serial number
   • Dits colour

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   Explanation and discussion

4. Question 4· 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

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5. Question 5· Money and inflation· WAEC

   During inflation, the people who usually gain are

   • Adebtors
   • Bcreditors
   • Cfixed-income earners
   • Dpensioners

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   Explanation and discussion

6. Question 6· Money and inflation· JAMB

   Demand-pull inflation occurs when

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

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7. Question 7· Money and inflation· JAMB

   Near money includes

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

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   Explanation and discussion

8. Question 8· 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

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9. Question 9· Money and inflation· WAEC

   Inflation caused by rising costs of production is

   • Ademand-pull inflation
   • Bcost-push inflation
   • Cdeflation
   • Ddisinflation

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10. Question 10· Money and inflation· JAMB

    Money that has value because government declares it legal tender is

    • Acommodity money
    • Bfiat money
    • Cbarter
    • Dnear money

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    Explanation and discussion

11. Question 11· 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

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    Explanation and discussion

12. Question 12· Money and inflation· JAMB

    Inflation hurts which group most?

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

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13. Question 13· Money and inflation· WAEC

    Deflation is

    • Aprinting more money
    • Ba rise in prices
    • Ca persistent fall in the general price level
    • Da rise in exports

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14. Question 14· Money and inflation· WAEC

    Which function of money allows goods to be valued in a common unit?

    • Amedium of exchange
    • Bstore of value
    • Cstandard of deferred payment
    • Dunit of account

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    Explanation and discussion

15. Question 15· Money and inflation· WAEC

    A sharp rise in the price of diesel raises the cost of running factories and pushes up prices. This is

    • Adeflation
    • Bdemand-pull inflation
    • Ccost-push inflation
    • Dstagflation only

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16. Question 16· Money and inflation· WAEC

    People who are likely to lose during inflation are

    • Adebtors
    • Btraders with stock
    • Cfixed-income earners
    • Dborrowers

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    Explanation and discussion

17. Question 17· 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

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18. Question 18· 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

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19. Question 19· 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

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20. Question 20· Money and inflation· JAMB

    Inflation can be controlled by

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

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    Explanation and discussion