SS 2 ECONOMICS

14/09/2020

Lesson Eighteen

I WANT TO USE THIS MEDIUM TO APPRECIATE GOD THE GIVER OF ALL GOOD THINGS FOR HE SAW US THROUGH THE PERIOD OF THE PANDEMIC TO THIS PLACE WHERE WE ARE ALREADY COUNTING DAYS TO OUR RESUMPTION. IT CAN ONLY BE GOD AND WE RETURN ALL THE GLORY BACK TO HIM.

TO  ALL THAT DID THEIR WORK CONSISTENTLY, I SAY A BIG THANK YOU. GOD BLESS YOU REAL GOOD. A BIG THANK YOU TOO TO OUR DEAR PARENTS FOR THEIR LOVE, PATIENCE  AND THE MONEY FOR THE DATA.

I PRAY THAT IT SHALL BE A GLORIOUS SESSION BY THE GRACE OF GOD. THE LORD WILL BE OUR SUN AND SHIELD. HE WILL GIVE US GRACE AND GLORY. HE WILL NOT WITHHOLD ANYTHING GOOD FROM US IN JESUS NAME. HE WILL SUPPLY ALL OUR NEEDS  FOR THIS SESSION AND BEYOND ACCORDING TO HIS RICHES IN GLORY THROUGH CHRIST JESUS. WE SHALL NOT LACK ANYTHING GOOD BUT RATHER LAUGH AT FAMINE AND DESTRUCTION IN JESUS NAME.

LOVE YOU ALL, SEE YOU NEXT WEEK BY THE GRACE OF GOD.

( S.S.3 REALLY LOOKS GOOD ON YOU)

ENJOY YOUR DAY AS YOU READ ON ECONOMIC INTEGRATION AND SUMMARISE IN A PAGE.   

07/09/2020

Lesson Seventeen

Good day to you all. My prayer this new month is that the Lord will preserve our souls, preserve us from all evil and preserve our going out and coming in from this time forth and ever more in Jesus name. We will surely laugh at famine and destruction for they will not come near us in Jesus name. I pray that the Lord will equip you spirit, soul and body for the challenges of the new session. Remain blessed and connected to your maker.

METHODS OF CORRECTING BALANCE OF PAYMENT DEFICIT.

1. Import restriction: The government of  may restrict the importation of goods and services through the use of tariffs, quotas, embargo, outright ban e.t.c.

2. Export promotion: Deficit balance of payment can also be corrected by efforts of the government geared towards promotion of export by giving incentives to firms. Incentives may be in form of subsidy, tax holiday, tax concession e.t.c.

3. Borrowing: A country can also borrow to correct balance of payment deficit provided she is able to generate and accelerate economic development of the country and this provides a means of paying back the loans.

4. Selling investment abroad: This will enable the country to acquire the foreign exchange it needs to pay for its imports.

5. Transfer of gold: Countries maintain reserves of gold to enable them recover deficits which are likely to occur from time to time in their BOP.

6. Exchange control: This could come as a reduction of the amount of foreign currencies available in the country for foreign trade transactions. The inability to get foreign currencies will reduce the volume of importation of goods and services and leave citizens to depend on locally made goods.

7. Devaluation: This is a deliberate act of the government of a country to reduce the value/ purchasing power of her currency in relation/compared to the value of other countries currencies. Devaluation lowers the prices of export, thus, making export cheaper and raises the prices of imports to discourage importation. Hence, it encourages export promotion and import substitution.

Illustration: A country devaluing its currency by 20% announces to the world that its currency is only 80% of its former value. The exchange rate then automatically changes by the same percentage.

The following are conditions under which devaluation will help to improve a country’s balance of payment position;

a. The countries import must have elastic demand: Devaluation results in increase in the prices of import, there would be a significant decrease in the demand for imported goods.

b. The countries export must have elastic demand in other countries: Since export will now become cheaper as a result of devaluation, other countries will now increase their demand.

c. Supply for export products should be elastic: The devaluing country should try and increase her exports to meet the high demand by other countries.

d. There should be no increase in wages and other incomes: An increase in wages and other incomes will discourage the consumption of locally made goods and encourage the demand for foreign goods.

e. Other countries should not devalue their own currency.

f. The devaluing country should effectively check inflation in order to achieve the desired goal of devaluation.

TRADE RESTRICTION

This is a situation whereby trading activities are hindered among willing countries. This is done to increase export and decrease import to protect and safeguard the economy from the problems associated with free trade.

Instruments used for trade restriction.

1. Tariffs: These are taxes paid on imported goods. When high, it discourages importers because the landing cost of their goods would be high, hence, increasing the prices of goods and vice versa.

2. Embargo/Ban: This is used to out rightly stop the importation of certain goods.

3. Quotas: This is used to regulate the specific amount of goods that people can bring into or take out of a country at a point in time.

4. Exchange control: This is a situation when the country reduces the amount of foreign currencies in the country. It makes it difficult for importers to buy from other countries since they do not have the means of paying.

5. Import license: This is a permit that allows an importer to bring a certain quantity of foreign goods into a country and allows him to purchase the foreign currency required to pay for them.

6. Import monopoly: This is a situation in which the government of a country takes over importation of certain goods which are only essential to the country.

ASSIGNMENT(kindly do this in your assignment notebook)

State any 6 reasons why countries restrict trade.

27/08/2020

Lesson Sixteen

Good day to you all. We thank God for another beautiful day. Please continue to take advantage of this period and groom yourself to become a better person. I pray that the next phase of your life is blessed and will be full of testimonies in Jesus name. Please, continue to make effort. It shall end in praise in Jesus name. Lots of love.  

Balance of Payment

This is a  statement or record that shows the relationship between a country’s total receipts from export ( visible and invisible) and total payment for imports ( visible and invisible) in a given year. It is a yearly statement that shows a country’s inome and expenditure on international account.

Balance of payment is an important indicator used by the government to see the international position of a country.

COMPOSITION / STRUCTURE OF BALANCE OF PAYMENT

There are 3 main accounts of balance of payment into which all economic transactions between a nation and the rest of the world are classified. they are;

a. Current account: It comprises of transactions that has to do with payments and receipts for currently produced goods. This shows the total payment for visible and invisible import, total receipts for visible and invisible export and unilateral transfer.

NOTE 1: UNILATERAL TRANSFERS otherwise known as UNREQUITED TRANSFERS arevoluntary transfer of money  by a government in which little or nothing is expected in return. Examples are foreign aid, debt forgiveness, membership dues to an international organisation e.t.c. It is one sided and have no returns. It is treated in the current account along with other visible and invisible items of trade.

NOTE 2: Visible items of trade are items that can be seen, touched and felt such as  foodstuff, raw materials, petroleum e.t.c. while invisible items are those that cannot be seen, touched or felt such as services rendered by doctors , accountants,  expenses, payments made for carriers such as ships, motor vehicles e.t.c.

b. Capital account: This account shows the capital movement in form of investment funds which can be a capital in-flow or out-flow and loans. it may be in form of long term or short term loans. 

c. Monetary movement account: This account shows how the balance of both current and capital account is settled. If a deficit occurs, this account would show how it is covered and if a surplus, the account shows how it is spent.

BALANCE OF PAYMENT DISEQUILIBRIUM

A state of disequilibrium in the balance of payment means an imbalance between a country’s total receipts from exports and total payments for imports in a given year. It has two aspects:

a. SURPLUS: A country is said to have a surplus balance of payment when the total receipt from exportation of visible and invisible goods/items and capital investment in the domestic economy are greater than the total payment of importation on visible and invisible goods and items i.e. Exports>Imports. It implies a favourable balance of payment situation.

b. DEFICIT: A country is said to have a deficit balance of payment when a country’s total receipt from exportation is less than payment for importation i.e.  Exports<Imports. It implies an unfavourable balance of payment situation.

CAUSES OF UNFAVOURABLE BALANCE OF PAYMENT

1. Excessive importation of goods and services.

2. Deficiency in domestic output/low local production.

3. Inadequate patronage of home-made goods which are sometimes regarded as inferior goods.

4. High level of importation of technical know-how.

5. Low level of technological development.

6. Poor social and economic infrastructure.

7. Inadequate export promotion strategy.

8. Policy and political instability.

9. Wrong set of industries and import substitution strategies.

ASSIGNMENT(kindly do this in your assignment notebook)

Name any 5 ways of correcting balance of payment deficit.

24/08/2020

Lesson Fifteen

Good morning to you all. We thank God for a beautiful day. It shall be a wonderful week for all of us in Jesus name.

Find below the correction to last week’s assignment

INSTRUCTION: COPY THE FOLLOWING NOTE IN YOUR NOTEBOOK. all notes would be checked and marked on resumption. thank you.

BASIC CONCEPTS OF FOREIGN TRADE

A. PRINCIPLE OF absolute COST ADVANTAGE

This principle was propounded by Adam Smith. It states that a country enjoys absolute advantage over others when it can produce more of a given commodity with equal quantities of factors of production or equal amount with less quantities of factors than the other country. Adam Smith states further that a country should therefore specialize in the production and export of a commodity in which it has an absolute advantage over others. A country should therefore specialize in the production of the commodity in which it has the greatest cost advantage and least disadvantage.

NOTE: KINDLY LEAVE 6 LINES FOR A TABLE

From the illustration above ,Country A produced 400 tons of Cocoa and 900  barrels of petroleum and it used 200 units of efforts (labour) .Country B on the other hand produced 600 tons of Cocoa and 300 barrels of Petroleum by using the same quantity of labour as Country A.

 According to Adam Smith, Country A has Absolute Advantage over Country B in the production  of petroleum while Country B has Absolute Advantage over Country A in the production of Cocoa.

The total world output of Cocoa and Petroleum will be greater if Country A specializes in the production of Petroleum and Country B in the production of Cocoa. Each of them will therefore have to import the commodity which it cannot produce.

B. PRINCIPLE OF COMPARATIVE COST ADVANTAGE

This principle was propounded by David Ricardo in the 19th century. According to him, international trade cannot be based on absolute cost advantage as said by Adam Smith rather on Comparative Cost Advantage.

This principle states that countries of the world should specialize in the production of commodities in which she has the greatest comparative cost advantage over others (or can produce at the lowest comparative cost)

ASSUMPTIONS \CONDITIONS FOR COMPARATIVE COST ADVANTAGE

1.Only two countries are in the world .

2. Only two commodities are n the world.

3. Factors of production are perfectly mobile.

4. Labour is the only productive factor/assets .

5. No transportation costs

6. Equal amount of labour and labour efficiency

NOTE: KINDLY LEAVE 6 LINES FOR A TABLE     

NOTE:  If the two countries decide to enter into a trade agreement that would bring about specialization, still applying the same amount of labour and all others assumptions . We will have the table below.

NOTE: KINDLY LEAVE 6 LINES FOR A TABLE     

ADVANTAGES OF THE PRINCIPLE OF COMPARATIVE COST ADVANTAGE.

1. It leads to increase in the world’s total production of goods.

2. It leads to reduction in the cost of production due to mass production.

3. It leads efficient utilization of resources.

4. It leads to specialization and standardization of production.

5. It increases independence between countries involved

6. It increases revenue of the countries involved.

LIMITATIONS/ DISADVANTAGES OF THE PRINCIPLE OF COMPARATIVE COST ADVANTAGE.

1. The more the countries, the more unworkable the principle becomes.

2. There are more than two commodities produced in the world.

3. There  are other factors of production to be considered apart from labour.

4. Labour cannot have the same efficiency in any two countries.

5. Costs of transportation is always involved in foreign trade

6. Perfect mobility of factors of production is not possible in foreign trade.

7. Strategic reasons: Nations often produce certain goods even at comparative cost disadvantage to protect their country from external forces e.g. production of arms and ammunition.

C. TERMS OF TRADE: This may be defined as the rate at which a country’s export exchanges for her import(visible and invisible export and visible and invisible import) in a given period expressed in price.

MEASUREMENT OF TERMS OF TRADE

Terms of trade is expressed as the ratio of index of export prices to the ratio of import prices.

          price index of export   *  100

          price index of import

D. BALANCE OF TRADE: This is the relationship between a country’s total receipts from visible export and total payment for visible import within a period of time usually one year.

                                                                     = N= ‘000

                    Receipt from visible export            xxxx

                    Payment for visible import              (xx)     

                    Balance of trade                               xxx

ASSIGNMENT

1. DEFINE BALANCE OF PAYMENT

2. NAME THE COMPOSITION OF BALANCE OF PAYMENT

NOTE: kindly do this in YOUR EXERCISE BOOK. THANK YOU.

17/08/2020

Lesson Fourteen

Good morning to you all. May this week be filled with good tidings, love, peace, happiness and prosperity for us in Jesus name. Happy New Week.

INSTRUCTION: COPY THE NOTE BELOW IN YOUR NOTEBOOK.

INTERNATIONAL TRADE

This can be defined as the exchange i.e. buying and selling of goods and services between two or more countries. It is also referred to as foreign of external trade. It can be divided into

a. Bi-lateral trade: This is the buying and selling between two countries only e.g. a trade between Nigeria and United States of America.

b. Multi-lateral trade: This is the buying and selling that occurs between  more than two countries e.g. a trade between Nigeria ,Ghana and the United States of America.

Differences between Domestic/Internal and International Trade

1. Mobility of Factors of Production: Factors of production are very mobile in internal trade while restricted in international trade.

2. Differences in currency:  In internal trade, he same currency is used. No exchange rate is required while in international trade, different currencies are used and exchange rate is involved.

3. Differences in national policies: Different countries have different policies. The policies may be on wages and salaries of workers or prices.                                                     

4. Cost of Transport: International trade covers more distance than internal trade. The more the distance the greater the cost of transportation.

5. Political differences: In internal trade , the buyers and sellers are under the same political authority ,culture, language etc. But in international trade, buyers and sellers are under different authorities.

6.Trade Restrictions: A country may impose trade restrictions such as tariffs, quotas, embargoes etc, on foreign trade, but these  do not operate in domestic trade.

7.  Cross Boarders Dealings: Goods and services moves across the boarders of the countries that are involved in international trade but in domestic trade there is no cross boarder dealing . Goods and services only move within the country.

8.Types of trade: The type of trade involved in international trade is either bilateral ( involving  two countries) or multilateral (involving more than two countries) but internal(domestic) trade is a unilateral trade as it is conducted within a country.

9. Weight and Measurement : In foreign trade , the weighing and measuring systems of the different countries involved are very different but in internal trade such systems are the  same or similar

Reasons for international trade

1.Different  Mineral/Natural Resources Endowment :Countries are differently  endowed with  natural resources .Volume of minerals resources may be greater in one country than the other . Because of this reason ,nations  do exchange the minerals  they have for those they do not have . This is made possible through international trade.

2.Differences in Climate: Many commodities, especially agricultural products are produced under different climatic conditions. Crops like coffee ,rice, cocoa ,thrive well in a tropical region. Countries that cannot produce these crops have to import them. This is done through international trade. But countries producing similar agricultural outputs like West African Countries need not trade among themselves in respect of primary products.

3. Technical Know-How : Advanced countries are able to supply machines and equipments which the developing countries cannot manufacture .Through international trade ,the developing countries are able to purchase or hire and make use of the machines for their benefits as a way to industrialise. Not only that, most of the developing countries do not have the technology to process some of their primary products, hence they rely on the developed(advanced) countries by trading with them.

4. Access to Capital: Some countries are richer than others with adequate capital to employ experts to produce goods in large quantities . So, their excess will be exported to other poor countries.

5. Specialization: This often lead to trade between countries . A country may like to specialize in the production of a commodity in which it has a greater economic advantage over others.

6. Comparative advantage: Countries engage in international trade when they can produce a commodity at a greater comparative advantage over others or can produce at the lowest comparative cost.

Assignment:

Differentiate between The Principle of Comparative Cost Advantage and Principle of Absolute Advantage. (TO BE DONE IN YOUR EXERCISE BOOK) THANK YOU AND STAY BLESSED.

10/08/2020

LESSON THIRTEEN

It’s a beautiful day and I say good morning to you all. Hope you’re keeping yourselves warm from the cold weather and keeping safe by adhering to all precautionary measures given by NCDC. The Lord will continue to keep us and our loved ones safe in Jesus name.

I say a big thank to all of you  who have been consistent in copying their notes and doing the assignments. I also use this medium to encourage others  who have not to stand up to the challenges of this time and start working. The Lord bless you all.

KINDLY NOTE THAT ALL THE NOTES GIVEN WOULD BE CHECKED AND MARKED ON RESUMPTION. Thank you for making effort.

Correction to Lesson Twelve’s Objective test and Assignment

1. c       11.c      21.d      31.c    41.c            

2. b      12.b      22.b      32.b     42.d

3. d      13.b      23.d      33.a     43.b

4.b       14.b      24.d      34.c     44.a

5.a       15.a      25.b      35.b    45.b

6.a       16.b      26.b      36.a     46.c

7. a      17.a      27.b      37.c     47.c

8.b       18.c      28.c     38.d     48.c

9.d       19.c      29.b      39.b    49.d                  

10.a     20.b      30.a      40.b     50.d

Instruction: Copy the following note in your notebooks and do your assignment in your exercise book. Thank you.

Non-banking financial institutions

INSURANCE COMPANIES are non-banking financial institutions involved in the protection of persons and objects against risks. They collect large sums of money from individuals and organisations in order to insure their lives and properties.

FUNCTIONS OF INSURANCE COMPANIES

1. They make it possible for a large number of people who suffer loss to be paid some monetary compensation from the contributions made.

2. They encourage the growth of commerce and industry by ensuring to compensate industrialists when a risk insured against occurs.

3. They form part of the capital market by making long term loan available.

4. They contribute to economic development by making direct investment in business ventures.

5. They mobilise savings through their life assurance policy.

6. They provide employment opportunities by recruiting financial insurance agents to canvas for insurance business.

STOCK EXCHANGE MARKET is an organised non-banking financial institution that provides avenue for buying and selling of securities such as shares, debentures, government  bonds e.t.c.

FUNCTIONS OF STOCK EXCHANGE MARKET

1. It is a market for buying and selling of securities.          

2. It assists companies to raise capital by helping to change securities to cash.

3. It serves as a medium of disseminating information to members of the public on company matters.

4. It helps to provide prospective or would-be investors to know where to invest.

5. It provides professional advice on the selection and management of investment.

ASSIGNMENT:

1. Define international trade.
2. State 5 differences between international trade and home trade.

03/08/2020

LESSON TWELVE

Good morning to you all. May the month of August be filled with wonderful blessings of good health, love, Peace, happiness and prosperity for us in Jesus name. Happy New Month.

Correction to Lesson eleven’s Objective Test  and Assignment

Instruction:  kindly mark and score yourself over 50.

1.B      11. C    21.D     31. D    41.A

2.C      12. C    22.D     32. B    42.B

3.B      13. C    23. C    33.B     43.A      

4. A     14. B    24. A    34.D     44.C

5.A      15. D    25. A    35. D    45.D

6.B       16.B     26.D     36.B     46.D

7.D       17.B     27. C    37.D     47. C

8.A       18.C     28. D    38.C     48.A

9.C       19.A     29. D    39.C     49.B

10.C     20.D     30. B    40.C     50.D

Differentiate between insurance company and the stock exchange.

Insurance companies are non-banking financial institutions involved in the protection of persons and objects against risks. They collect large sums of money from individuals and organisations in order to insure their lives and properties while the stock exchange is a non-banking financial institution for buying and selling of securities. It assists companies to raise capital by helping to change securities to cash.

OBJECTIVE TEST 5

a. Test yourself by answering the questions below. Thank you for taking this very serious. Use 40 minutes for the test.

b. Answer the questions in your exercise book.

1. Entrepreneurship as a  factor of production is scarce because [A] not everyone has the time [B] it is difficult to obtain the qualification [C] a lot of people avoid taking risks [D] labour is also scarce
2. A vertical demand curve means that quantity demanded [A] decreases as price rises [B] remains unchanged even though price changes  [C] increase while price remains unchanged [D] increases as price as price decreases
3. Which of the following would guide a boy in choosing between a book costing $15 and a toy of equivalent value? [A] returns on investment [B] Taste of  toys [C] Scarcity and choice [D] Scale of preference
4. A perfect competitor is a price- taker because [A] the price is fixed by the marketing board [B] he cannot control the price of his product [C] government fixed the price of his product [D]  he can control the price of his product
5. Which of the following is an example of a capital good? A [A] tin to milk [B] hammer [C] loaf of bread [D] radio
6. The market economic system is also referred to as a  [A] capitalist economic system [B] command economic system [C] mixed economic system [D] perfectly competitive system
7.  If Bala scored 30% in English Language, 61 % in Mathematics, 60% in Economics and 75% in Geography, what is his mean score? [A] 56.5% [B] 62% [C] 63.5% [D] 65%
8. A subsidy in economics is [A] a tax on imported goods [B] an incentive in cash or kind [C] a surplus obtained from taxation [D] an ad valorem tax
9. Which of the following is not a commodity money? [A] Cowries [B] Salt [C] Beads [D] Coins
10. Which of the following will lose during inflation? [A] Creditors [B] Debtors [C] Businessmen [D] Trade
11. Functions of commercial banks do not include [A] lending money with interest charges to customers  [B]  carrying out  transactions on behalf of the customers [C] expansion of money supply [D] printing of security documents for customers
12.  Which of the following  is not an example of near money? [A] Fixed deposits [B] Notes and coins [C] Government securities [D] Treasury bills
13. A worker’s pay after the deduction of income tax is known as [A] consumer’s income [B] disposable income [C] net income [D] total emolument
14. A mining industry is usually located near the [A] market [B] source of raw material supply [C] source of finance [D] reservoir where there is much water
15. Which of the following does not affect the mobility of labour? [A] Population size [B] marriage     [C] Social unrest [D] Trade Union activities
16. An increase in the bank rate by the central bank will [A] make borrowing more attractive [B] reduce the amount of borrowing [C] increase the amount of borrowing [D] increase the money supply
17. Which of the following does occur when national income rises? [A] Exports increase [B] imports rise [C] saving fall [D] Tax receipts rise
18. The risk in a joint stock company is borne by the [A]  general managing [B] managing director       [C] shareholders [D] workers of the company
19. Interest is the payment made for the use of [A] labour [B] land [C] capital [D] enterprise
20. The benefits that occur to a firm due to large scale production are called [A] increasing returns to a factor [B] internal economies of scale [C] external diseconomies of scale [D] decreasing returns to a factor
21. Which of the following is not a fixed cost? Cost of [A] land [B] equipment [C] advertisement         [D] labour
22. The details of the internal affairs of a joint stock company are contained in the company [A] code of conduct [B] articles of association [C] certificate of incorporation [D] trade certificate
23. One major set-back in a partnership is [A] access to capital [B] better decision making [C] private business account [D] disagreement among partners
24. The type of unemployment commonly found among school leavers seeking jobs is  [A] cyclical unemployment [B] residual unemployment [C] seasonal unemployment [D] frictional unemployment
25. Tax imposed on goods imported into the country is called [A] income tax [B] tariff [C] poll tax      [D] excise duty
26. Which of the following is responsible for the low level of productivity by farmers? [A] Inadequate farm labour [B] Poor storage facilities [C] Poor transportation [D] Primitive methods
27. If the tax rate is 15% for three individuals on different salary scales, the tax system is said  to be      [A] progressive [B] proportional [C] specific [D] regressive
28. Which of the following is not a direct tax? [A] Company Tax [B] Pay-As-You-Earn [C] Value Added Tax [D] Capital Gains Tax
29. When the government desires a large revenue, it should tax commodities for which demand is        [A] price elastic [B] price inelastic [C] unitary price elastic [D] perfectly elastic
30. The per capita income is the most common  index  for measuring [A] standard of living                    [B] population growth rate [C] level o f illiteracy [D] wage rate
31. The following are problems in  measuring national  income except how to [A] measure subsistence production [B] avoid double counting [C] differentiate between Net National Product and Net Domestic Product [D] differentiate between intermediate and final goods
32. Investment in an economy is the same as [A] increase in the money supply [B] increase in capital formation  [C] purchases of company shares [D] addition to bank deposits
33. When a firm is able to buy  goods more cheaply because of its large size, it is enjoying [A] marketing economies [B] technical economies [C] welfare economies [D] managerial economies
34. Quotas limit the volume of foreign goods as the [A] foreign market [B] transit port [C] exporting country [D] port of entry
35. Which of the following is a debit item in a country’s balance of payments? [A] Exports [B] Imports [C] Tourists’ expenditure [D] Residents’ foreign earnings
36. In contractionary monetary policy,  [A] lending is made more difficult [B] lending is made easy      [C] government spending is restricted [D] taxes are reduced
37. When the price of commodity X increases and the demand for commodity Y also increase, then commodities X and Y are: [A] normal goods [B] inferior  goods [C] substitute goods [D] necessities
38. The market period is when [A] demand and supply are perfectly elastic [B] supply in the market is fixed [C] the market demand exceeds supply [D] the market is equilibrium
39. A decrease in the demand  for a good can be caused by [A] an increase in the price of a substitute     [B] an increase in the price of complement [C] a decrease in the price of a complement [D] a fall in the price of the good
40. A successful advertising campaign  for good X, a closely competing brand of good Y, will move  the demand curve for good Y to the [A] equilibrium [B] left [C] right [D] origin
41. When government expenditure for a year exceeds the expected revenue, there is [A] balance of payments deficit [B] balance of trade surplus [C] budget deficit [D] budget surplus
42. The overall demand for wood for furniture, building and fuel constitute a [A] competitive demand for wood [B] normal demand for wood [C] complementary demand for wood [D] composite demand for wood
43. If the price is set above the equilibrium price, market will exhibit [A] an excess demand [B] an excess supply [C] abnormal demand [D] abnormal supply
44. A consumer purchasing two commodities X and Y will maximize his satisfaction when [A] the last dollar spent on commodity X gives the same satisfaction as the last dollar spent on commodity Y   [B] he spends the same amount on commodities X and Y [C] the ratio of the marginal utility of X its price exceeds the ratio of the marginal utility of Y to its price [D] the marginal utility ratio is greater than their price ratio
45. International specialization and trade would increase world output if opportunity cost ratios are      [A] the same in various countries [B] different in various countries [C] high in various countries     [D] stable in various countries
46. Which of the following conditions will not make devaluation useful in improving a country’s balance of payments position? [A] Demand for imports must be elastic [B] The country’s export must have elastic demand in other countries [C] The value of other nations’ currencies must not change          [D] There must be increase in wages and other incomes
47. Which of the following is not included in measuring national income  by the income approach?       [A] Wages and salaries [B] Profits of companies [C] Grants to pensioners [D] Rents on landed property
48. Which of the following is the main objective of privatization? [A] Creation of additional employment [B] Diversification of the economy [C] Increasing the level of efficiency [D] increasing expenditure
49. Which of the following is the major function of the Organization of Petroleum Exporting Countries (OPEC)? [A] Exploration [B] Oil transportation [C] Oil refining [D] Regulation of oil price
50. The following are functions of the African Development Bank in member countries except [A] aiding economic and social development [B] providing technical assistance for projects [C] promoting both private and public investment project [D] issuing currencies and controlling money supply

27/07/2020

LESSON ELEVEN

Good morning to you once again. We thank God for giving us something to look forward to. September 21st would be a reality and non of us shall be missing in Jesus name. I’m looking forward to having all of you back in school.

Correction to Lesson Ten’s Assignment

Objective Test 3 

Instruction:  kindly mark and score yourself over 48.

1.   D         11. A         21.  C       31.  B       41. B
2.   B         12. A        22.  B       32. D       42. B
3.   C         13. B        23. B         33.  A      43. B
4.   B         14. *        24. D        34. C       44. B
5.   B         15. C        25. C         35. C       45. B
6.   D         16. *       26. B         36. A       46. C
7.   C         17. D       27. B          37. D       47. D
8.   D         18. C       28. C          38. D       48. D
9.   D         19. C       29.  C         39. C       49. A
10.   A         20.  A     30. C           40.  C      50. D

ASSIGNMENT

Differentiate between demand for money and supply of money .

 OBJECTIVE TEST 4

Instructions

a. Test yourself by answering the questions below. Thank you for taking this very serious. Use 40 minutes for the test.

b. Answer the questions and assignment in your exercise book.

1. The opportunity  cost  to the public for providing health care facilities would be the [A] money spent on  building  hospitals [B] amount  paid as interest on loan to build the facilities [C] goods and services that would have been produced [D] goods and services the health  care workers would produce
2. Scarcity is the principle problem  faced by [A] the poor people in developing countries [B] societies who face the problem of unemployment [C] every  individual, firm and government [D] the poor people in the world
3. The marks scored by five students in a test in Economics are 0,5,5,3,1. The median mark is [A] 1 [B] 3 [C] 4 [D]  5
4.  The demand schedule shows how quantity demanded is related to [A] testes of the buyer [B] population of the  buyers [C] population of the buyers [D] prices of other commodities
5. Which of the following is responsible for the upward slop of a supply curve? [A] The price of the commodity [B] The quantity supplied [C] The law  of demand [D] A change in the price  of other goods
6. Means are s care because [A] they are abundant in supply [B] they are unlimited in supply [C] they have alternative uses [D] wants are limited
7. In the long run, the supply of al consumer goods is [A] inelastic [B] constantly elastic [C] perfectly inelastic [D] elastic
8. A successful advertisement of eggs will lead to [A] an increase in the demand and price  [B] a decrease in the quantity demanded and price [C] an increase in the price and a fall  in supply [D] a decrease in the quantity supplied and demanded
9. Which of the following will not have its marginal utility equal to zero as more of it is acquired? [A] Cars [B] Food [C] Money [D] Bag
10. The law of diminishing returns operates in the [A] foreseeable future only [B] market period [C] long run [D] short run
11. The long run average cost  curve of a declines over a certain range of output due to [A] increasing  cost the firm experiences [B] diminishing returns [C] increasing returns to scale [D] constant returns the firm experience
12.  State enterprises are business organizations set up mainly to [A] make profit  for state [B] complete vigorously with private companies [C] enhance the welfare o f members of the public  [D] provide more jobs politicians
13. In the short run, profit in a perfect market is maximized when [A] marginal cost exceeds marginal revenue [B] total revenue equals total cost [C] marginal cost equals marginal revenue [D] marginal revenue exceeds marginal cost
14. The coefficient of cross elasticity of demand between two goods is positive when the goods are [A] luxury [B] substitutes [C] normal goods [D] complements
15. If the percentage change in the pr ice of a commodity is 20% while the percentage change in the quantity demand is 40%, then the coefficient of price elasticity of demand of this commodity will be [A] 0.5 [B] 0.8 [C] 1.0 [D] 2.0
16. A direct relationship between two variable in Economics will be shown as a curve with a [A] negative slope [B] positive slope [C] constant slope [D] multiple slope
17. A decrease in supply will lead to a [A] rise in quantity bought [B] fall in price and a rise in quantity bought and sold [C] rise in price and a fall in quantity bought and sold [D] rise in price and a rise  in quantity and sold  
18. Entrepreneurship as a  factor of production is scarce because [A] not everyone has the time [B] it is difficult to obtain the qualification [C] a lot of people avoid taking risks [D] labour is also scarce
19. The demand  curve in a  perfect  market is [A] perfectly elastic [B] fairly elastic [C] fairly inelastic [D] perfectly inelastic
20. Which of the following functions is performed by the wholesaler? [A]  Breaking of bulk for the consumer [B] Hoarding of goods to hike prices [C] stocks varieties of goods for the consumer [D] Purchasing in bulk from the producer
21. A school boy bought a textbook and went home without a cellphone he would have liked to buy. This is a typical case of [A]  wrong choice [B] inadequate money cost [C] luxurious lifestyle [D] opportunity cost
22. The size of the labour force is likely to be large if the [A] birth rate is low [B] death rate is high  [C] rate of emigration is high [D] rate of immigration is high
23. The birth rate in a town was 20 births per thousand. If the number of births was 500, the population of the town will be [A] 2,500 [B] 20,500 [C] 25,000 [D] 100,000
24. To improve agricultural production, government should [A] be involved in direct production [B] introduce policies to improve agriculture [C] invite foreigners to take over farming [D] import more food 
25. The national income figures of most west African countries are normally under estimated because of the high incidence of [A] subsistence production [B] non co-operation by foreigners [C] low level of earning [D] illiteracy among citizens
26. Any benefit received without contributing to national output  is called [A] public good [B] social good [C] free earnings [D] transfer earnings
27. Inflation has undesirable effects on the society as a whole because it [A] makes lenders to gain and borrowing to lose [B] make pensioners better off. [C] reduces the purchasing  power of money [D] creates a competitive  bidding for fixed assets
28. A product that can be used as money but which is valuable in its own right is called [A] bank money [B] precious money [C] token money [D] commodity money
29. Demand deposits are money because [A] the central bank recognizes them [B] they are medium of exchange [C] cheques are means of payment [D] they represent money
30. Medium and long term lending is carried out by [A] retail banking institution [B] development banks [C]  central banks [D] commercial  banks
31. Which of the following debt instruments has the shortest maturity? [A] Bonds [B] Development loan stocks [C]  preference stocks [D] Treasury bills
32. Proportional taxes are  those  in which the [A] rich and the  poor pay the same amount [B] rich and the poor pay the same percentage [C] poor pays a higher proportion [D] poor pays a lower proportion
33. The balance of payment account shows the relationship between [A] the value of visible goods exported and imported [B] the prices of exports and prices of imports [C] a country’s payments on imports and receipts on export [D] payments made on invisible imports and receipts on invisible exports
34. At the highest level of total utility, marginal utility is [A] negative [B] positive and falling [C] positive and rising [D] zero
35. Which of the following cannot be listed as a natural resource? [A] Factory site [B] Iron ore [C] Gold [D] Cement
36. A famer’s capacity to produce on a large in West Africa is limited by [A] absence of buyers [B] inadequate storage facilities [C] development of substitutes [D] absence of industries to patronize them
37. Peasant  farming is the [A] cultivation of small farm holding [B] use of  labour intensive method of agriculture [C] production of food crops [D] production to meet family food requirement    
38. The type of unemployment associated with a worker who though working, remain  virtually unemployed is known as [A] seasonal unemployment [B] structural unemployment [C] disguised unemployment [D] frictional unemployment
39. Which of the following describes the elasticity of supply for a linear supply curve drawn from the margin? [A] Perfectly  inelastic [B] Perfectly elastic [C] Fairly elastic [D] Unitary
40. Price floor is set [A] at the equilibrium [B] below  the equilibrium [C] above the equilibrium [D] near the equilibrium
41. Which of the following conditions shows that a firm is incurring losses? [A] AR < AC [B] AR=AC [C] AR > AC [D] AR = MC
42. For price discrimination to be profitable [A] the elasticities of demand  in the two market must be the same [B] there must be different elasticities of demand in the two market [C] there must be many buyers and sellers [D] there must be free entry and exit
43. The condition for  equilibrium of the consumer demands that a dollar of expenditure on commodity X [A] yields the same marginal utility as commodity Y [B] is proportional to the marginal utility of commodity Y [C] is equal to the utility of the price  of commodity Y [D] is equal to the price of commodity Y
44. All developing countries exhibit the following features except [A] low standard of living [B] low degree of urbanization [C] high standard of living [D] rapid population growth
45. If governments in developing countries want to raise revenue for development, then the major source to rely on is [A] royalties and rent [B] grants and loans [C] sale of government assets [D] taxation
46. International specialization and trade would increase world output if opportunity cost rations are [A] stable in various countries [B] the same in various countries [C] high in various countries [D] different in various countries
47. The problems of economic development planning include all the following except [A] inadequate statistical data [B] inadequate capital [C] adequate human resource [D] over ambitious plans
48. The setting up of cottage industries in the rural areas is aimed at [A] creating employment in the area [B] promoting rural-urban migration [C] reducing the standard of living [D] reducing crimes in the rural areas
49. The following are functions performed by an insurance company except [A] mobilization of funds through premium collected [B] promoting rural-urban migration [C] collection of deposits from the public [D] making long term loans available for investment
50. Terms of trade is used to describe [A] the volume of exports to other countries [B] the volume of imports vis-à-vis exports [C] expenditure on exports [D] the rate at which  exports exchange for imports 

20/07/2020

LESSON TEN

It’s another beautiful day and I say good morning to you all. We thank God for the gift of life and wonderful family. Continue to encourage yourself in the Lord like David. This too shall end in praise in Jesus name.

Correction to Lesson Nine’s Assignment

Objective Test 2

Instruction:  kindly mark and score yourself over 48.

1. D      11. A    21. C    31. *    41.C

2. C      12. A    22. C    32. A    42.B

3. B      13. A    23. A    33. D    43.B

4. C      14. B    24. C    34. A    44.A

5. A      15. C    25. D    35. C    45.A

6. B      16. D    26. B    36. B    46.B

7. D      17. *    27. B    37.B     47. C

8. B      18. B    28. B    38. D    48.B

9. C      19. B    29. C    39. A    49.C

10. B    20. A    30. A    40. A    50.D

Note:

*Q17. The quantity demanded is greater than the quantity supplied.

*Q31 The options are not related to the question.

ASSIGNMENT

Differentiate between insurance company and the stock exchange.

 OBJECTIVE TEST 3

a. Test yourself by answering the questions below. Thank you for taking this very serious. Use 40 minutes for the test.

b. Answer the questions in your exercise book.

c. Submit your assignment using the form below.

1. The relationship between ends and means is [A] choice [B] scale of preference [C] opportunity [D] scarcity
2. The problem of choice arises in a firm because [A] workers’ desire are limited [B] there are alternative ways of producing  goods [C] supply of resources is adequate [D] firm can always have what they need
3. An economic system is best defined as [A] activities that provide the means of live hood in an economy [B] the system of governance adopted by a nation [C] the mode of production and distribution of commodities [D] a series of choice that is available to an individual
4. The reward for the effort of an entrepreneur in production is [A] salary [B] profit [C] interest [D] commission

Use the data below to answer question 5

The wages received by five labour are $55, $40, $45, $40 and $900 

5. The mean wage in the data is affected by an [A] irregular  value [B] unrealistic value [C] abnormal value [D] extreme value

6. The demand  for economic recourses is considered a derived demand because it depends on [A] the demand for the final product [B] productivity of the resources [C] the supply of resources [D] the supply of the  final product

7. The efficiency of labour depends on the [A] quantity of labour [B] supply of labour [C] quality of labour [D] demand for labour

8. If a rise in the price  of one  commodity leads to an increase in the demand for another, the two commodities are [A] normal goods [B] complements [C] unrelated good [D] substitutes

9. A product that can be used as money but which is valuable in its own right is called

a. bank note b. precious money c. token money d. commodity money

10. A good with a negative income elasticity of demand is [A] an inferior good [B] a normal good [C] a luxury good [D] a necessity

11. When market demand increases and market supply is unchanged, there is [A] an increase in equilibrium price and quantity [B] a decrease in equilibrium price and quantity [C] an increase in equilibrium price but a fall in quantity [D] a decrease in equilibrium price only

12. If MU is marginal utility and P is price , a consumer of  commodities X and Y isin equilibrium, when [A]  MUx/Px=MUy/Py  [B] MUx/Py=MUy/MUx [C]MUx/Px-MUy     [D]   MUy-MUx 

13. An entrepreneur will continue to employ more units of labour up to a point where the [A] average product equals wages [B] marginal product of lab our is increasing [C] total product of labour is zero [D] wages are equal to marginal product of labour

14. In the short run, the supply of agricultural product is [A] average product equals wages [B] marginal product of labour is increasing [C] total product of labour is zero [D] wages are equal to marginal product of labour

15.Production will take place outside the production possibility boundary,when there is [A] economies of scale [B] economic recession [C] economic growth [D] increasing returns

16. When a market is in equilibrium, an increase in market supply will lead  to [A] an increase in price and a decrease in quantity demanded [B] a decrease in price and an increase in quantity demanded [C] an increase in price with quantity demanded unchanged [D] a decrease in price and quantity demanded

17. A farmer spent $700 to produce 5 bags of rice, if the variable cost is $450. The average fixed cost (AFC) is [A] $25 [B] $35 [C] $40 [D] $50

18. In perfect competition, marginal revenue and average revenue are always  [A]  not equal [B] above the price [C] equal to price [D] below the price

19. Which of the following is not true of a co-operative society? [A] it is a highly democratic form of business organization [B] Profit  or dividends are shared according to patronage [C] There is limit to the size of its membership [D] Each member has an equal right in the decision making

20. Transferring ownership of foreign business in a country to the citizen is called [A] indigenization [B] decentralization [C] nationalization [D]  commercialization

21. Distribution is an important part of production because it [A] determines what to produce [B] is an  economic activity [C] makes commodities available to final consumers [D] is a reward for taking part in production

22. Perishable goods such as tomatoes tend to have [A] elastic supply [B] inelastic supply [C] unitary elastic supply [D] fairly elastic supply

23. A population in which the people above 60 years represent 20% and those below 18 years represent 45% can be described as [A] ageing population [B] population with high dependency ratio [C] population with higher level of manpower [D] optimum population

24. Which of the following will cause a decrease in the quantity supplied of a commodity? [A] Increase in the cost of production [B] Unfavourable weather condition [C] Decrease in the number of producers [D] Decrease in the price of the commodity

25. Infant industries are those industries which [A] product goods used by infants [B] are located in less developed areas [C] are in their early stages of production [D] are located in developed countries

26. The type of unemployment which results from the changes in the pattern of aggregate demand and the techniques of production is [A] seasonal unemployment  [B] structural unemployment [C] frictional unemployment [D] residual unemployment

27. Agricultural production  in West Africa could be increased through the following ways except [A] improvement of extension service [B] reduction of import duties on agricultural produce [C] effective control of pests and disease of plants an d animals [D] reduction of  taxes on farm machinery

28. The charging of different prices to different groups of consumers for the same commodity is [A] price control [B] price system [C] price discrimination [D] price war

29. An industry whose final product is fragile or perishable must be located close to the [A] labour [B] power supply [C] market  for the product [D] raw material for the product

30. Which of the following does not form part of money supply? [A] Cash [B] Demand deposit [C] Time deposit [D] Gold

31. Gross National Product (GNP) includes the value of the commodities produced  by the [A] residents and citizens abroad [B] citizens plus net income from abroad [C] citizens including contributions of foreigners [D] residents plus net income from abroad

32. The total stock of money available for use in an economy is [A] a function of money [B] a characteristic of money [C] the demand for money [D] the supply of money 

33. Using the income approach in the calculation of national income, which of the following items should not be included? [A]students’ grant and scholarship [B] Interests received on  capital  [C] Income earned by self employed persons [D] Profit of entrepreneurs

34. During inflation, government can effectively control prices by [A] increasing indirect taxes [B] increasing the number of distributors [C] using subsidies to increase supply [D] increasing workers’ income

35. The central bank controls credit activities of bank through [A] the use of bank balance [B] revaluation of currency [C] the use of bank rate [D] the issue of more currencies

36. Mortgage banks specialize in the financing of [A]  building of houses [B] building of industries [C] construction of roads [D] small scale business

37. Net property income from abroad is the difference between [A] income and expenditure of a country [B] net national income and gross  national expenditure [C] gross national expenditure  and income [D] gross national product and gross domestic product

38. Which of the following is a direct tax? [A] Sales tax [B] Custom  duties [C] Commodity tax [D] Income tax

39. When government spends less than it collects in revenue in a particular year, the budget is said to the [A] in equilibrium [B] balanced [C] in surplus [D] in deficit

40. Which group contributes more to the total output of a typical less developed country? [A] Teachers [B] Masons [C] Farmers [D] Traders

41. Economic growth will occur if there is an increase in [A] rural-urban migration [B] substance production [C] the number of entrepreneurs [D] the quantity of underutilized resources

42. International trade exists because of the relative differences in the [A] value of services from country to country [B] cost  of production between countries [C] cost of transportation between countries [D] culture of the people of different countries

43. Devaluation means [A] a reduction in the value of the national currency  due to  rising price [B] a reduction  in the value  of the domestic currency relative to  foreign currencies [C] an increase in the value of the domestic currency relative to foreign currencies [D] a reduction in the purchasing power of a foreign currency

44. Which of the following will help solve balance of payments problem? [A] Massive importation of goods [B] Increased domestic  production [C] Reduction in tariff [D] Trade liberalization

45. Terms of trade is measured by [A]index of export prices/index of domestic prices *100[B] index of export prices/index of import prices *100 [C] index of export prices/index of base prices * 100[D] index of import prices/index of export prices * 100

46. Crude oil is usually priced in the international market in [A] Pound sterling [B] Deutschmark [C] US Dollars [D] Euros

47. The African Development Bank (AFDB) performs the following function except [A] promotion of technical development [B] aiding economic development [C] promoting economic integration among member countries [D] breaking the monopoly of foreign oil companies

48. One of the problems facing the Organization of Petroleum Exporting Countries (OPEC) is [A] the relative inelastic demand for its product [B] that oil prices are stable [C] the new discovery of oil deposits in some countries [D] that substitutes for oil are unavailable

49. Diamond gold and bauxite are examples of [A] mineral resources [B] human resources [C] artificial resources [D] marine resources

 50. Economic problems arise mainly as a result of

a. inaccurate statistical data in West Africa b. excessive wastage of available resources c. lack of foresight on the part of resource users d. limitations in availability in availability of resources.

13/07/2020

LESSON NINE

Good day to you all. We thank God for the gift of life and this opportunity once again. This season too shall pass and we will all have a testimony at the end of the day for non of us shall be missing in Jesus name.

Correction to Lesson Eight’s Test and Assignment

Objective Test

1. A      11. D    21. A    31. B

2. D      12. A    22. B    32. A

3. C      13. C    23. D    33. B

4. B      14. A    24. D    34. C

5. B      15. D    25. D    35. D

6. A      16. B    26. C    36. B

7. D      17. B    27. C    37. A

8. C      18. A    28. A    38. C   

9. B      19. B    29. B    39. C

10. A    20. C    30. D    40. D

Types  of Cheque

1. Order Cheque: This is made payable a person or firm named on it or an order which requires the endorsement of the payee unless he pays it into his own bank account.

2. Bearer Cheque: This is payable to the bearer i.e. whoever presents it. It is payment without any endorsement. It can be cashed over the counter.

3. Open Cheque: This can be presented and cashed over the counter of the bank which it is drawn. It is not crossed which makes it risky because it can be paid to a wrong person. It is used when the payee do not have a current account.

4. Crossed Cheque: This cheque has two parallel lines across it’s face. It cannot be cashed at the counter. It must be paid into a current account. Some words may be written between the parallel lines such as & Co or Non-negotiable. This helps to prevent fraudulent practices.

Parties to a Cheque

1. Drawer: This is a person responsible for drawing a cheque. He is the owner of the account on which the cheque is drawn. 

2. Drawee: This is a bank on which the cheque is drawn i.e. the bank where the cheque will be presented for payment.

3. Payee: This is the person to whom the cheque is made payable i.e. the person to whom payment is directed to be made.

Features of a Cheque

1. It is a order to pay.

2. It is an unconditional order.

3. The amount must be specified.

4. It must be in writing.

5. The account number of the drawer is stated.

6. The name and branch of the bank appear on the cheque.

7. It is addressed by one person to another.

8. The name of the payee must be shown on the cheque.

9. A stamp duty is paid on a cheque.

10. Amount must be clearly written in words and figures.

Objective Test II

a. Test yourself by answering the questions below. Thank you for taking this very serious. Use 40 minutes for the test.

b. Answer the questions in your exercise book.

c. Submit your assignment using the form below.

1. Economics is described as a social science because it deals with [A] an aspect of human behavior [B] the distribution of commodities [C] the production of good [D] limited resources which have alternative uses
   2. Who bears the risk of production? [A] Production managers [B] Factory workers [C] Entrepreneur [D] Retailers
   3. When the means of production are controlled by private individuals, the economic system is called [A] mixed economy [B] capitalism [C] socialism [D] welfarism
   4. Which of the following create utility? I. Farmers II Manufacturers III. Consumers IV. Retailers [A] I and II only [B] II and III only [C] I,II and IV only [D] II,III and IV only
   5. Optimum population is [A] the population which when combined with available resources yields the maximum output [B] birth rate less death rate [C] increase in standard of living as population increase [D] the minimum number of people that can live in a country
   6. The most immobile factor of production is [A] equipment [B] land [C] labour
   [D] entrepreneur
   7.Total utility increase as more of a commodity is [A] purchased [B] sold [C] produced
   [D] consumed
   8. Which of the following is considered as a fixed cost of a firm? [A] Wages [B] Interest on debt [C] expenditure on raw materials [D] Fuel and lubricants
   9. A firm’s unit fixed cost will fall if the [A] demand for the firm’s product increase [B] demand for the firm’s product falls [C] firm’s output increases [D] firm’s output decrease
   10. When marginal product is equal to zero then the [A] average product has reached its highest level [B] total product is at maximum [C] total product is negative [D] average product begins to fall
   11. A sewing machine in a clothing factory is a [A] capital good [B] durable consumer good [C] non-durable consumer good [D] product of the factory
   12. Diamonds are more expensive than water because the price of the product tends to reflect its [A] total value [B] marginal value [C] revealed preference [D] consumer surplus
   13. Steel can be classified as [A] a capital good [B] an intermediate good [C] natural resource [D] an imperishable product
   14. The law of demand states that the [A] higher the price, the higher the quantity demand [B] lower the price, the higher the quantity demanded [C] quantity demand remains the same a t any price [D] quantity demanded increases with income
   15. Goods for which quantity demanded rises as income rises are [A] complementary goods [B] giffen good [C] normal goods [D] substitutes
   16. Which of the following is not constant along a given demand curve for bread? [A] the price of bread [B] The income of consumers [C] The price of substitutes [D] Age distribution
   17. A price ceiling established below the equilibrium price will cause [A] quantity demanded to crease [B] quantity supplied to be greater than the quantity demanded [C] demand to be less than supply [D] quantity supplied to decrease
   18. A commodity that provides a stable tax revenue has a price elasticity of demand which is [A] elastic [B] inelastic [C] higher than the equilibrium price [D] lower than the equilibrium price
   19. Joint ventures are businesses owned by [A] workers and management [B] two or more independent firms [C] professionals [D] traders
   20. The condition for perfect market will be violated if [A] the product sold can be substituted for each other [B] there are two many buyers and sellers [C] the product of the industry can be branded [D] the exit or entry of sellers cannot affect the price
   21. A profit maximizing monopolist must decide on all the following except [A] output level [B] price level [C] the wage level [D] the combination of inputs
   22. Efficient allocation of resources can be attained under [A] a closed shop [B] a monopoly [C] perfect competition [D] subsidized production
   23. A rise in interest rate is likely to lead to [A] a fall in the amount of money people want to hold [B] an increase in the desire to buy goods on credit [C] a demand for increase in wages [D] a decrease in the number of bank
   24.Which of the following is monetary policy? [A] Control of government expenditure to influence aggregate demand [B] Reduction of tax on capital equipment to increase output [C] The use of interest rate to influence the demand of money [D] Increase in wages to reduce income inequality
   25. Inflation can be caused by [A] under population [B] budget surplus [C] excessive price control [D] excessive government expenditure
   26. The total stock of goods is fixed in the [A] market period [B] short run [C] long run [D] planning period
   27. Double coincidence of wants is associated with [A] opportunity cost [B] trade by barter [C] monopoly [D] commercial policy
   28. The value of money is determined by the [A] quantity available in the bank [B] quantity of goods and services it can buy [C] quality of the paper used in making it [D] amount of taxes collected
   29. The stronger factor which influences the taken of loans is [A] availability of loanable funds [B] the number of creditors [C] the rate of interest [D] government loan policy
   30. Saving a substantial part of income will lead to capital [A] accumulation [B] consumption [C] transfer [D] immobility
   31. The following are all functions of commercial banks except [A] accepting deposits [B] portfolio of assets an d liabilities [C] articles of incorporation [D] balance of trade account
   32. To control the activities of commercial banks, the central bank changes the [A] cash reserve ratio [B] portfolio of assets an d liabilities [C] articles of incorporation [D] balance of trade account
   33. Mortgage bank specialize in assisting customers to own [A] business ventures [B] domestic appliance [C] shares [D] house
   34. Open market operation is used under monetary policy to [A] expand or contract the amount of money in circulation [B] reduce the inflow of foreign currency [C] control the activities of the capital market [D] make investment more attractive to foreigners
   35. A long term loan can be obtained from [A] community bank [B] central banks [C] development banks [D] traditional saving institutions
   36. One of the liabilities of a commercial bank is [A] advance [B] deposit [C] cash [D] overdraft
   37. Income tax generally tends to be [A] regressive [B] progressive [C] equitable [D] proportional
   38. A criticism of a high rate of tax on overtime pay would be that it [A] cab e passed on the consumer [B] leads to inflation [C] makes more goods available [D] can be disincentive to work
   39. The allocation of the nation’s wealth to each of the factors of production is the [A] national income [B] government revenue [C] proceed of labour [D] distribution of income
   40. Economic growth is the rate of increase in [A] a country’s full employment and real output [B] a nation’s total population [C] the number of commercial bank in the country [D] the general price level
   41. Which of these defines correctly the term value added? [A] Difference between cost raw materials and units of labour used [B] Total investment minus depreciation [C] Total revenue from sales minus the cost of production [D] The market value of all the resources employed
   42. Gross Domestic Product (GDP) minus Net Domestic (NDP) is equal to [A] foreign factor earnings [B] allowance for depreciation [C] indirect taxes and subsidies [D] value of intermediate products
   43. Which of the following is a measure of the standard of living of a country? [A] GDP/(Annual budget ) [B] GNP/(Total Population ) [C] NNP/(Labour Force ) [D] NI/(Dependant Population )
   44. In domestic trade, the number of currencies involved is [A] one [B] two [C] four [D] indefinite
   45. Invisible trade refers to foreign trade in [A] services [B] commodities [C] capital goods [D] military hardware
   46. If a country imports less than its exports, it has [A] a trade deficit [B] a trade surplus [C] unfavourable terms of trade [D] balance of payment deficit
   47. When a country devalues its currency, the prices of imports in the domestic currency are excepted to [A] fluctuate [B] fall [C] rise [D] stabilize
   48. The decrease in the external value of a country’s currency though market forces is [A] devaluation [B] depreciation [C] deflation [D] decentralization
   49. The International Monetary Fund (IMF) assist member countries to deal with [A] shortage of long term loans [B] private sector liquidity problems [C] temporary balance of payment problem [D] government budget deficits
   50. Which of the following countries is not a member of the Organization of Petroleum Exporting Countries (OPEC)? [A] Nigeria [B] Venezuela [C] Saudi Arabia [D] Egypt 

Theory Question

Differentiate between insurance company and the stock exchange.

06/07/2020

Lesson Eight: Financial Institutions

Happy New Month. May July cooperate with each and everyone of us for lifting and testimonies in Jesus name. May it please the Lord to continue to uphold us with His right hand of righteousness in Jesus name Amen. We shall not suffer any form of loss in Jesus name.

Correction to Lesson Seven’s assignment (29/06/2020)

1. Credit Creation: This refers to the process by which commercial banks make it possible to make more money from deposits through the issuance of loans or overdrafts. This is made possible by the interest they charge on loans or overdrafts and interest they pay to customers.

b. Factors that affect credit creation abilities of commercial banks;

i. Collateral security available: If collateral security is not available, banks will be scared of lending, hence the lower the volume of money created.

ii. Central Bank restriction: Central bank may sometimes restrict them from lending e.g. Open Market Operation, Special Directive e.t.c.

iii. Cash Reserve Ratio (CRR) : The higher the CRR, the lower the ability of commercial banks to create money.

iv. Interest Rate Charged: The higher the rate of interest charged, the lower the interest of customers to obtain loans as they are discouraged, hence the lower the ability of commercial banks to create money and vice versa.

v. Willingness of the public to take bank loans: Commercial banks are able to create money when the public are willing to take bank loans and overdraft. Without these, there won’t be interest to be charged.

vi. Desire of people to save: When people save, deposits are created and it is from these deposits that banks give out loans. So, the more people save, the more the banks are able to create credit or money and vice versa.

2. Differentiate between capital and money market.

2. Capital market can be defined as the financial institution set up for lending and borrowing of long-term loans. The money lent and borrowed in this type of market is used to finance capital projects whereas money market is for lending and borrowing of short-term loans. This type of market aids all forms of business transactions.

3. Examples of institutions in the capital market

i. The Central Bank

ii. Development Banks

iii. Building Societies/ Mortgage Bank

iv. Issuing Houses

v. Stock Exchange Market

Examples of institutions in the capital market

i. The Central Bank

ii. Commercial Banks

iii. Discount Houses

iv. Accetance Houses

v. Finance Houses

Insurance Companies e.t.c.

Instructions:

a. Test yourself by answering the questions below. I want you to take this seriously. Use 30 minutes for the test.

b. Answer the questions in your exercise book.

c. Submit your assignment using the form below.

Objective Test

1. The money payment made to owners of land and labour are
a. rent and wages b. interest and profit c. wages and profit d. dividend and salary
2. The price elasticity co efficient indicates
a. how far business can reduce cost b. the degree of competition c. the extent to which demand curve shifts d. consumers responsiveness to price changes
3. Every society strives to pursue all the following economic objectives except
a. increased production b. price stability c. an inequitable distribution of income d. sustainable growth and development
4. Which of the following best describes capital as a factor of production?
a. a natural resource found everywhere b. a stock of physical asset used for production c. the organization of human and material resources for production d. resources used in training labour
5. The system whereby goods are exchanged for goods is known as
a. stock exchange b. barter exchange c. banking d. co operative system
6. The graph of the function x = a + by is
a. linear b. quadratic c. cubical d.. exponential
7. Productivity per worker is best measured by
a. total output less number of workers b. total output multiplied by number of workers c. number of workers less total output d. total output divided by number of workers
8. In determining cost, economists consist of
a. implicit cost b. explicit cost c. implicit and explicit cost d. explicit cost less implicit cost
9. The precautionary motive of holding money is to enable the holder to
a. buy stocks when interests are high b. overcome unforeseen circumstances c. buy goods and services on a daily basis d. buy fixed assets
10. In the long run, all factor inputs are
a. variable b. diminishing c. constant d. fixed
11. The benefits that results from concentrating similar firms in an area is referred to as
a. external diseconomies of scale b. internal diseconomies of scale c. internal economies of scale d. external economies of scale
12. Per Capital Income in any West African country is measured by
a. dividing the GNP by total population b. adding the total savings to the GNP c. multiplying the GNP by the total population d. subtracting the GNP from the GDP
13. A priority rating of aggregate individual wants is called
a. scarcity b. choice c. scale of preference d. opportunity cost
14. Profit can be calculated by
a. subtracting total cost from total revenue b. subtracting average revenue from total cost dividing total revenue by total output d. dividing marginal revenue by marginal cost
15. The marginal revenue curve of a of a monopolist is
a. upward sloping from right to left b. downward sloping from right to left c. parallel to the quantity axis
d. downward sloping from left to right
16. When all factor input are doubled, the production possibility curve will
a. left to right and return to its original position b. shift from left to right c. shift from right to left d. remain in its former position
17. Income elasticity of demand is the measurement of the responsiveness of
a. price to changes in income b. quantity demanded to changes in income c. changes in expenditure to changes in income d. changes in expenditure to changes in price of the commodity
18. The establishment of industries in rural areas will help to reduce
a. rural-urban migration b. urban-urban migration c. urban-rural migration d. rural-rural migration
19. Government impose taxes mainly to
a. punish the citizens b. provide social amenities c. donate to poorer countries d. execute white elephant projects
20. In a perfect market, price and quantity to be bought are determined by the
a. consumers and retailers b. producers and wholesalers c. forces of demand and supply d. interest of government and producers
21. When the price elasticity of supply is equal to 0.4, supply is said to be
a. inelastic b. elastic c. unitary elastic d. perfectly elastic
22. In the money market, money can only be borrowed for
a. long term b. short term c. capital projects d. public utilities
23. Deflation can be controlled by increase in
a. the bank rate b. income tax c. the price level d. the budget deficit
24. Mortgage banks give loans to investors on long term basis to
a. finance agriculture b. establish banks c. acquire machinery d. build houses
25. The situation whereby a government spends more than its budget for a fiscal year is known as
a. extra budget b. surplus budget c. mid-year budget d. deficit budget
26. In a socialist economy, factors of production are owned and controlled by the
a. citizens b. businessmen c. government d. foreigners
27. One quality of money which makes it possible to be easily carried is its
a. scarcity b. durability c. portability d. acceptability
28. A form of tax in which the poor pays a higher rate than the rich is known as
a. regressive tax b. proportional tax c. oppressive tax d. progressive tax
29. The reduction in the value of a country’s currency in relation to the value of currencies of other nations is known as
a. deflation b. devaluation c. inflation d. revaluation
30. The creation of utility can be referred to as
a. value added b. profit maximization c. entrepreneurship d. production
31. Government revenue will increase if tax is imposed on a good whose demand is
a. elastic b. inelastic c. unitary elastic d. perfectly elastic
32. Occupational distribution of population is mainly influenced by
a. economic factors b. religious factors c. geographical factors d. social factors
33. Proportional tax refers to
a. taxation of the rich only b. equal tax for all people c. unequal tax for all people d. taxation of civil servants only
34. Which of the following is not an item of capital expenditure?
a. construction of highways b. building of dams c. payment of salaries and wages d. building of new universities
35. The population which yields the highest income per head is known as
a. over population b. under population c. extreme population d. optimum population
36. Price discrimination can only occur when there is
a. perfect competition b. imperfect competition c. merger d. partnership
37. Commodity market can best be described as a market in which
a. goods are sold b. labour is sold and bought c. short term loans are obtained d. quoted stocks are bought
38. Provision of services is classified under
a. primary production b. secondary production c. tertiary production d. production possibilities
39. In ordinary partnership, the risks are
a. borne by the workers b. borne by the creditors c. shared among the partners d. undertaken by the active partners
40. Balance of trade is defined as the relationship between
a. invisible imports and export b. visible and invisible exports c. imports and exports services
d. visible exports and visible imports

Theory Questions

1. Differentiate between special deposit and special directive.
2. Explain any 4 measures used by the central bank to control other banks.

Assignment

1. State 4 types of cheque.
2. Name the parties to a cheque.
3. State the features of a cheque

29/06/2020

Lesson Seven: Financial Institutions

Good day to you all. We bless God for the gift of life and for this opportunity once again. Stay blessed and connected to your maker.

kindly copy the note below in your notebooks.

Correction to Lesson Six’s Assignment (Financial Institutions 22/06/2020)

a. Overdraft: This is a credit/ loan a bank grants it’s customer. It allows account holders to withdraw more money than they have in their account.

b. Standing Order: This is an instruction an account holder gives his bank to pay a certain amount of money at specific intervals on their behalf.

c.Bills of Exchange: This is an unconditional written order from one person to another to make the payment of a specified sum of money to a designated person.

d.Passbook: This is a document used in operating account with low transaction volume such as savings account. It shows the entire balance in the account and provided for easy record keeping.

e. Cheque: This is a written document instructing a bank to pay a specific amount of money from a person’s account to someone.

Development Banks: These are banks established with the major function of providing long term loans meant for the developmental projects such as building of dams, roads, hospitals, colleges e.t.c. to aid economic development. Examples of development banks in Nigeria are Nigeria Development Bank (NIDB), Nigeria Bank for Commerce and Industry (NBCI), Nigerian Agricultural and Co-operative Bank (NACB) e.t.c.

Functions of Development Banks

1. They provide medium and long term loans for capital and developmental projects.
2. They render technical and financial advice to potential investors in various sectors of the economy.
3. They conduct feasibility studies of important projects and make investors aware of their profitability level.
4. They promote investment awareness to those interested in taking huge risks.
5. They help the government to implement their economic policies especially in the areas of industrial development.
6. They make direct investments in various sectors of the economy.

Merchant Banks: These are specialized banks which facilitate commerce and industries by making short, medium and long term funds available.

Functions of Merchant Banks

1. They grant short, medium and long term loans to industrialists.
2. They accept large deposits from the public and give high interest rates.
3. They serve as issuing houses by acquiring the shares of new joint stock companies and offer them for sale.
4. They give expect and technical advice to their customers/clients.
5. They lease for long period of time by making costly equipments available to their customers.
6. They are foreign exchange dealers. They buy and sell currencies to commercial banks and individuals.
7. They accept and discount bills of exchange in domestic and international trade.

Mortgage Bank: This is a financial institution saddled with the responsibility of providing medium and long term loans to the public for the purchase or building of dwelling houses. E.g. Federal Mortgage of Nigeria (FMBN). They are referred to as building societies in some countries.

Functions of Mortgage Bank

1. Provision of medium and long term hosing loans.
2. They accept fixed deposits from members of the public.
3. They encourage the growth of industries which produce housing materials.
4. They help the government in the execution of its housing policies.

Traditional Financial Institutions

        A good example of this in Nigeria is Esusu/Asusu/Nsusu. It is a kind of co-operative that consists of people who agree to contribute a certain sum of money each and hand it over to a member of the group. The action is repeated until every member has had a turn of receiving the money. Lots are usually drawn to determine a member’s turn of receiving his/her share.

        Membership is by agreement and it may or may not be in written form. The amount contributed is determined by the members’ capacity. The institution does not specify what a recipient should do with the money received.

Merits of Traditional Financial Institutions

1 .It encourages its members to form the habit of saving money.

2. It encourages investment of the big sum of money saved.

3. They lend money to their members.

4. They save their members the pain of going to banks to borrow money with their embarrassing collateral issues.

5. They discourage their members from being extravagant or wasteful.

Demerits of Traditional Financial Institutions

1.They experience high embezzlement rates.

2. They lack management because they are managed by those who lack administrative and managerial  acumen

3. They lack effective means of recovering loans.

4. The financial resources available to them are low.

5. They use arbitrary means in fixing interest on loans.

Assignment

1. Mention 4 factors that determine credit creation.
2. Differentiate between capital and money market.
3. Give three examples each of instructions in both capital and money market.

22/06/2020

LESSON SIX : FINANCIAL INSTITUTIONS

SUB-TOPIC: COMMERCIAL BANKS

Good day to you all. We thank God for the gift of life and that we are well. Please continue to take advantage of this period and opportunity to groom yourself to become a better person. You will not be a victim of circumstance in Jesus name. You will fulfill your purpose and destiny in Jesus name.  Stay connected to your maker.

Instruction: Kindly look through the correction carefully and correct where necessary. COPY TODAY’S NOTE IN YOUR NOTEBOOKS. THIS IS WITH THE BELIEVE THAT YOU COPIED THE LAST NOTE GIVEN IN YOUR NOTEBOOKS. IF NOT, KINDLY DO SO. THANK YOU.

Correction To Lesson Five’s Assignment (16/6/2020)

1. Treasury bill is a short term government financial security that matures within three months whereas Treasury Certificate is also a government financial security which matures after a year. They are both issued through the Central Bank and made available to individuals and corporate organisations through the Commercial Banks to either borrow or lend money in the Capital Market.

2 a,b and c.i.e. the various account operated by commercial banks (See the note below).

d. Government Bond:This is a long term financial security issued to source for funds. They are generally regarded as very safe.

3. Credit Creation: This refers to the process by which commercial banks make it possible to make more money from deposits through the issuance of loans or overdrafts. This is made possible by the interest they charge on loans or overdrafts and interest they pay to customers.

Commercial Banks

These are banks that specialise in the keeping of money, valuable goods, granting of loans, advances and overdraft to individuals and corporate bodies for the purpose of making profit. 

Functions of Commercial banks.

1. Acceptance of Deposits: This is the primary function of a commercial bank. They accept deposit from individuals and corporate organisations for safe keeping. The amount received is kept/ credited to the customers account. They operate the following types of account;

a. Savings Account: This is a popular type of account operated by low income earners. It is operated with the use of passbook. It attracts interest. Withdrawals can only be made by the owner of the account and frequent withdrawals are discouraged. Withdrawals are limited to twice in a month.

b. Current/Demand Account: This is operated by high income earners/ businesses. It is operated with the use of cheques. It does not attract interest. Owners enjoy privileges like overdrafts and loans. There is no limit to the amount of withdrawals.

c. Time/ Fixed Deposit Account: Here, money is deposited for a specific period of time and before a withdrawal is made a 7-14 days notice is given. It yields a high rate of interest.

2. Lending Agent: The commercial bank lends money to the customers in the following ways;

a. By Overdraft: This is a privilege enjoyed by current account holders. It is withdrawing more than the balance standing as credit in ones account.

b. By Granting Loans: They give loans to borrowers with necessary collaterals and interest are charged on money borrowed. Customers are allowed to pay back the loan on installments within a specific period of time.

c. By Discounting Bill of Exchange: They discount bill of exchange by holding bills till maturity on behalf of their customers. They pay their customers at once while they allow debtor a period of credit. They hold the bill until maturity date  i.e . date the bill is due for repayment to claim the face value from the debtor. This is done when their customer/ creditor needs money urgently and cannot wait till due date.

3. Agent of Payment: Commercial banks take responsibility in making payment on behalf of their customers who have given a standing order. Such payments include school fees, house rents, insurance premium  e.t.c.

4. Provide Brokerage Service: This is done by buying and selling of shares and stocks on behalf of their customers and also act as issuing houses.

5. Provision of Financial Advice: they provide advice to customers on matters relating to investment and on the type of projects to invest their money.

6. Implementation of Government Monetary Policies: When The Central Bank create monetary policies to manage the economy, they carry them out through the commercial banks who will help to implement the policies since they are the ones that deal directly with the public.

7. Development of the Economy: They help in the development of the economy by investing directly in important sectors as directed by The Central Bank using Special directives.

8. Foreign Exchange Transactions: They facilitate international trade by making foreign exchange/ currencies available and also make payments on behalf of their customers.

9. Act as Executor for their Customers: Commercial Banks can act in the capacity to execute the last will and testament of their customers.

Assets of  Commercial Banks

Assets are productive resources or properties of a firm.  They are resources that are permanent in nature and lasts for a long period of time. The assets of commercial banks are as follows;

a. Cash in tills of the bank and deposits with the Central Bank.

b. Cheques drawn on other banks.

c. Treasury bills and discounted bills of exchange.

d. Loans and advances.

e. Investments.

f. Fixed assets such as buildings.

Liabilities of Commercial Banks

These are claims on a business. The liabilities of commercial banks are;

a. Capital provided by shareholders.

b. Deposit kept in the bank by customers.          

c. Reserves such as undistributed profit (ploughed back profit).

ASSIGNMENT                                                                                         

Instruction: Answer the questions using the form given below.

 Define the following terms;

            a. Overdraft

            b. Standing Order

            c. Bill of Exchange

            d. Passbook

            e. Cheque

15/06/2020

LESSON FIVE: FINANCIAL INSTITUTIONS

Good day to you all. Today’s work is a continuation of the topic we started last week. Continue to put in the beautiful effort, you will see that it would pay off at the end of the day. God bless you.

Private Chat me on 08030725755 WhatsApp if you have any question. Stay Blessed.

Correction to Lesson Four’s Assignment (Financial Institutions) 08/06/2020

Our lesson this week is on monetary policy i.e. the measures used by the central bank to control the activities of other banks. These measures are the same measures used to control and regulate the economy i.e. the money supply( the amount of money in the economy)

1. Monetary Policy: This may be defined as the measures developed by the Central Bank in a country to control the volume/ amount of money in the economy. It involves the management of money supply in the economy to ensure the control of inflation, promote sustainable economic growth which would eventually lead to a developed economy.

It could be expansionary or contractionary.

Expansionary when it is used to increase the volume of money in the economy and contractionary when it is used to reduce the amount of money in the economy.

Note: The Federal Reserve in the diagram above is the Central Bank.

2. The monetary policies are also the measures used by the central banks to control the activities of other banks/ the economy. They are as follows;

a. Open Market Operations: This is the buying and selling of government securities such as treasury bills, treasury certificates, government bonds e.t.c. If the Central Bank wishes to reduce the amount of money supply/ amount of money in circulation, it sells government securities which are paid for through cheques drawn from commercial banks. Thus reducing the amount of money available to banks and individuals. To increase the amount of money in circulation, they just buy the securities back thereby putting the money collected back into the economy.

The above diagram illustrates what happens in OMO. To increase money supply, the CBN buys back securities sold. This is shown on the left side of the diagram(KICK START) and to reduce money supply, they sell government securities.

b. Bank/Interest Rate: This is the rate at which the Central Bank lends money to financial institutions. The importance of this is that other rates of interest in the country follow the rise and fall of the bank rate. When it is decreased, loans are encouraged, hence an increase in money supply and vice versa.

c. Cash Reserve Ratio(CRR): This refers to a compulsory cash reserve required by all commercial banks to have as deposit in their Central Bank account. CRR is set according to the guidelines set by the CBN. The CBN can raise it if it wishes to reduce the lending ability of commercial banks and the amount of money in circulation/money supply and vice versa.

d. Special Deposit: This is an additional cash reserve (over and above the Cash Reserve that commercial banks are ordered to lodge with the Central Bank. This forced deposit is meant to reduce the liquid/ cash available to banks, their ability to create money and quantity of money in circulation.

e. Liquidity Ratio: This is the amount of assets that banks are allowed to hold in cash form as a proportion of their total deposits. When the CBN wishes to reduce the money supply, liquidity ratio is decreased and vice versa.

f. Use of Special Directives: The CBN can instruct the commercial banks to direct their lending to a particular sector of the economy. This is usually done to develop or enhance the development of a particular sector of the economy that is lagging behind.

g. Moral Suasion: This involves a gentle appeal made by the CBN to commercial banks to follow some monetary policies.

h. Funding: This is a process of converting a short-term government security e.g. treasury bill to a long-term security e.g. treasury certificate. The CBN can use this medium to hold the cash balance of commercial banks until there is an improvement in the economy.

Assignment:

1. Differentiate between treasury bill and treasury certificate.
2. Write short notes on each of the following:

a. savings account

b. current account

c. fixed deposit account

d. government bond

3. What is credit creation?

08/06/2020

LESSON FOUR: FINANCIAL INSTITUTIONS

Good day students, hope you had a great night. I want to appreciate all of you and especially those who have been doing and submitting their assignment promptly. Please be encouraged if you haven’t been doing so. It would do you a lot of good on the long-run. The Lord will continue to increase you in knowledge,wisdom and understanding in Jesus name. However, your last assignment were all muddled up because there were no names on them. Kindly ensure you include your name when using the upload file for easy identification. Thank you.

Correction to Lesson Three 01/06/ 2020 (MARKET STRUCTURES)

Study this carefully and do your corrections.

1a. A market can be described as any form of arrangement where buyers and sellers come in contact for the purpose of buying and selling.

b. Features of a Perfect Market

i. Large number of buyers and sellers: There are a large number of buyers and sellers because there are no restrictions to entry.

ii. Free entry and exit: Here, nobody is deprived of being a buyer or seller because there are no restrictions to entry. There are no legal formalities that restricts an interested member from buying or selling.

iii. Homogenous Goods: Goods sold in this market are identical, so buyers  cannot give preference to one product over another.

iv. No preferential treatment: Equal treatment is given to all categories of buyers in this market. Everybody is treated alike. If anyone is treated poorly, the next seller will be readily available to attend to such a customer.

v. No government intervention: IN a perfect market, the government do not control the prices at which commodities are sold. Prices are determined through price system.

c. Similarities between monopolistic competition and perfect competition.

– They both maximise profit when MC=MR

– Both have large number of buyers and sellers

– There is free entry and exit in both

– Both can make abnormal profit in the short run

Differences between monopolistic competition and perfect competition.

	Monopolistic competition	Perfect competition
1	Differentiated products are sold here	Identical goods are sold here
2	There is high degree of control over price  (price variation exists)	Price is constant and determined by price system
3	When in equilibrium, Price is higher than both MC and MR	At equilibrium, MC=MR=P
4	It is a reality i.e. can exist in real life	It does not exist in real life situation

2.

3ai. To make profit.

ii. When losses are made.

b. Consumers benefit from perfect competition in the following ways;

i. Competition allows consumers to benefit from lower prices.

ii. It promotes production of good quality goods.

iii. Efficient allocation of resources enables producers to produce what the consumers want.

c. Profit is maximised for a perfect competitor when;

i. MC=MR

ii. AC curve falls below the AR curve.

iii. MC curve cuts MR curve from below.

4.

Today, we are going to move a step further by looking at the first topic for THIRD TERM 2019/ 2020 Session (FINANCIAL INSTITUTIONS)

INSTRUCTIONS

I. Write the scheme of work and note given in your school notebook.

2. Answer the questions at the end of the lesson using the form given below.

Scheme of Work for Third Term 2019/2020 Session

1. Financial Institutions

– Meaning

– Types (Banking and Non-banking Financial Institutions)

–  Banking Financial Institutions (Meaning of a bank and Types)

a. Central Bank ( Meaning, Functions & Measures used by them to control other Banks otherwise known as Monetary Policies)

b. Commercial Bank

c. Development Bank

d. Merchant Bank

e. Mortgage Bank

– Non- Banking Financial Institutions

a. Insurance Companies

b. Stock Exchange Market

2.  International Trade

– Meaning, Types and Forms

– Reasons for and Barriers to International Trade

– Differences between Home and Foreign Trade

– Basic Concepts of Foreign Trade

a. Principle of Comparative Cost Advantage

b. Principle of Absolute Advantage

c. Terms of Trade

d. Balance of Trade

e. Balance of Payment

3.National Income

– Meaning and Major National Income Concepts

– Ways of Measuring National Income

– Uses and Limitations of National Income Estimates

FINANCIAL INSTITUTIONS

          These are business organisations that deals with money and near money instruments.  They are very important for the economic development of a nation. They are the channel through which funds flow from lenders to borrowers.

          This may be divided into;

          a. Banking Financial Institutions

          b. Non- banking Financial Institutions

BANKING FINANCIAL INSTITUTIONS

A bank may be defined as a business organisation set up purposely for the safe keeping of money, valuable goods(e.g. jewellery) and documents(e.g.will). Banks are classified according to their specialized functions and operations.

TYPES OF BANKS

1. CENTRAL BANK: This is the apex bank in any country and it is owned by the government. No single individual or group of persons can claim ownership of the central bank. In Nigeria, it is referred to as the Central Bank of Nigeria( CBN). There is only one Central Bank in a nation with branches all over the country. The branches are usually in the capital cities of each state.

NOTE: The aim of the Central Bank is neither to make profit nor compete with other banks. They do not have dealings with individuals.

FUNCTIONS OF THE CENTRAL BANK

1. Issuance and Control of Currency: The Central Bank is the only financial institution saddled with the responsibility to order the printing of money and its supply into the economy. It also controls the amount of money in the economy by ensuring that it is neither too much nor too little.

2. Banker’s Bank: It acts as banker to all other banks. These banks have account with the central bank into which they keep their cash reserves, foreign exchange and also facilitate clearing of cheques.

3. Government’s Bank: It serves as the banker to the government. It keeps, controls government account, the country’s gold reserve and enter financial transactions with monetary institutions such as World Bank on behalf of the government.

4. Lender of Last Resort: The Central Bank acts as lender of last resort for commercial banks when they run short of money to meet their obligations.

5. Regulation of the economy: It regulates the economy by ensuring that the quantity of money in circulation corresponds with the volume of goods and services produced in the country. It does this by using various monetary policies such as Open Market Operation(OMO), Bank Rate e.t.c.

6. Adviser to the Government: It advices the government on matters concerning the financial and economic needs of the economy.

7. Responsible for Monetary policy: The Central Bank is responsible for developing and implementing different monetary policies. It uses this to increase or decrease the amount of money in circulation in response to the economic situation of the country.

8. Management of Foreign Exchange Reserve: The Central Bank is saddled with the responsibility of ensuring that foreign exchange/currency is available in the country to aid international trade/ transactions.

Others are;

9. Management of National Debt.

10. Maintenance of External Reserve. e.t.c.

Assignment

1. Define monetary policy.

2. Explain the meaning of the following:

a. Open Market Operations

b. Bank Rate

c. Cash Reserve

d. Moral Suasion

01-06-2020

LESSON THREE

Good morning to you all and happy new month. I pray that this month will be a month of good tidings for each and everyone of us in Jesus name. The Lord will continue to keep us safe in Jesus name.

kindly find below the CORRECTION TO QUESTIONS ONE & THREE LESSON TWO

PLEASE STUDY IT CAREFULLY AND MAKE NECESSARY CORRECTIONS

MARKET STRUCTURES

A market can be described as any form of arrangement where buyers and sellers come in contact for the purpose of buying and selling. Market has two broad divisions, i.e.

            1. Market according to goods and services sold in them. Examples are Labour Market, Commodity Market, Foreign Exchange Market, Stock Exchange Market, Money Market e.t.c.

            2. Market according to prices. This is divided into

            a. Perfect Market

            b. Imperfect Market

REVISION QUESTIONS

INSTRUCTION: Answer the questions using the form below. To attach your DIAGRAMS USE THE UPLOAD FILES AT THE BEGINNING OF THE PAGE. THANK YOU.

1a. Define a market.

b. Explain 4 features of a perfect market.

c. State any 2 ways by which monopolistic competition and perfect competition are the same and any 3 ways in which they are different.

2. With the aid of a diagram, explain the supernormal profit of a monopolist.

3a. Why would a producer

            i. enter a competitive market?

            ii. leave a competitive market?

b. In what 2 ways do consumers benefit from perfect competition?

c. Give 2 conditions necessary for profit maximization for a perfectly competitive firm.

4. Explain with diagram(s) the “short run” and “long run” equilibrium position of a firm in a perfectly competitive market.

NOTE: kindly submit your homework using the form below. To attach your DIAGRAMS USE THE UPLOAD FILES AT THE BEGINNING OF THE PAGE. THANK YOU.

CORRECTION TO QUESTIONS TWO & THREE, LESSON ONE

PLEASE STUDY CAREFULLY AND MAKE NECESSARY CORRECTIONS

Date: 25-05-2020

Good morning to you all. Believe your weekend was great. This week, we are still going to look at more questions on the topic COST AND REVENUE CONCEPTS. The answer to QUESTIONS 2&3 from our first lesson would be posted later today. This is to enable those who couldn’t submit last week to do so and those who submitted to do it again.

Remain blessed and continue to stay safe.

Note : If you have any difficulty in tackling the questions, kindly private chat me on WhatsApp 08030725755.

Thank you.

LESSON TWO: COST AND REVENUE CONCEPTS

INSTRUCTION: Kindly submit your answers using the form below.

1. The table below represents  the output level of a particular firm producing soft drinks. Use the information in the table to answer the questions that follow;

                                Output(units)

                                                0

                                                24

                                                46

                                                72

                                                96                                                                                                   

                                                116

 Given the cost equation of the firm in Naira as C=40+4q, where C is the total cost and Q is quantity produced. Calculate;

a. The total cost of producing;

                                i. 24 units

                                ii. 72 units of output.

b. The average cost when

                                i. 96 units

                                ii. 116 units were produced.

c. The marginal cost when

                                i.46 units

                                ii. 72 units were produced.

d. If the firm is operating in a perfectly competitive market and the market price is #5 per unit, determine the profit when;

                                i. 46 units are produced.

                                ii. 96 units are produced.

2a. Define profit of a firm.

b. With appropriate formulae, explain the following;

                                i. total revenue (TR)

                                ii. average revenue (AR)

                                iii. marginal revenue (MR)

                                iv. average fixed cost (AFC)

3. The diagram below represents the equilibrium position of a firm in a perfectly competitive industry. study it carefully and answer the questions that follow.

• 

ai. At what level of output and price is the firm in equilibrium?

ii. Calculate the firm’s profit in equilibrium.

iii. What type of profit is it? Explain your answer.

b. Why is the average  revenue (AR) function horizontal?

c. State any two ways in which marginal cost (MC) and average total cost (ATC) are related.

Hello dear students, it’s quite a while and i hope you’re making effort to stay safe. The Lord almighty will continue to keep us and our loved ones safe under His shadows in Jesus name. I thank God for giving us this opportunity and pray that we will benefit optimally from it to the praise of His glory.

Our initial classes will be a revision of what we did during the second term and we will gradually move on from there. I would love you to get a 60 leaves exercise book where you would be required to answer some questions and make some jottings. This would be called for at any time. While the other answers would be submitted here. Kindly make effort to adhere to this instruction to build your confidence. God bless you real good.

LESSON ONE: Cost and Revenue Concepts

Production can only take place when the factors of production are readily available in the right proportion. To get the factors of production money must be spent. The entire money put together to get, buy or spent on the factors of production is referred to as COST.

INSTRUCTION: Kindly answer question ONE in your exercise book. Two and THREE are to be submitted using the form below.

REVISION QUESTIONS

1a. In your own words, differentiate between cost and price.

b. Distinguish between the following;

i. Fixed cost and variable cost

ii. Marginal cost and marginal revenue

iii. Total cost and total revenue

iv. Average cost and average revenue

2. From the table below, answer the following questions;

Output of Beans(kg)	Total Revenue(N)	Marginal Revenue(N)	Total Cost(N)	Marginal Cost(N)
10	150	–	250	–
20	200	5	300	5
30	350	15	450	13
40	450	F	500	7
50	550	5	550	M
60	600	5	580	3
70	630	X	700	12

3a. Under which conditions will a firm continue to operate at a loss in the short-run? (Use figures or a diagram to explain your answer).

b. Distinguish between implicit and explicit cost.