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Question 1
A
greater than one but less than  
B
zero  
C
negative  
D
positive  
E
infinity 
Explanation.
The higher the price of commodity ,A the higher the quantity Demanded of commodity B (A’.5 substitute). Hence the cross elasticity is positive.(D)

Correct Option:
D

Question 2
A
rent  
B
profit  
C
interest  
D
gain  
E
moratorium 
Explanation.
Moratorium is an inducement or grace received without actually working for it. (E)

Correct Option:
E

Question 3
A
tax increase  
B
budget surplus  
C
increase in unemployment  
D
wage increase  
E
increase in labour supply 
Explanation.
An increase in wage will increase the purchasing power of consumers and invariably the aggregate demand, it will tend to increasing price level(inflation)if not matched with increase in production. (D)

Correct Option:
D

Question 4
A
its yield is based on profits  
B
its yield is fixed rate of interest  
C
it has no redemption date  
D
there is a voting when interest is paid  
E
its interest is variable 
Explanation.
Debenture is a loan to the company and it a attract a fixed of interest as usual. (B)

Correct Option:
B

Question 5
A
wages and salaries of public servants  
B
students bursaries and scholarship  
C
profit of international  
D
income of self employed person  
E
rents on property 
Explanation.
Student bursaries and scholarships are transfer income which is excluded Natona income computation under income approach .(B)

Correct Option:
B

Question 6
A
increase  
B
fall  
C
first fall but increase later  
D
remain unchanged  
E
change noticeably 
Explanation.
If the price of a particular commodity is reduced quantity demanded will increase gradually and the total revenue will first fall and increase later. Ans C

Correct Option:
C

Question 7
A
a reduction in total demand  
B
an increase in government spending  
C
an increase in money supply to banks  
D
an increase in aggregate demand  
E
an increase in money supply relative to demand 
Explanation.
Generally, fall in total demand will cause the price to fall, and t will fall persistently if not carefully checked . (A)

Correct Option:
A

Question 8
A
stock brokers  
B
sleeping partners  
C
part-time investors  
D
ordinary partners  
E
debenture holders 
Explanation.
Sleeping partners are partners that contributes to the smooth running of the business but does not participate in the day-to-day activities of business. (B)

Correct Option:
B

Question 9
A
government  
B
board of directors  
C
management  
D
shareholders  
E
owners 
Explanation.
A sole proprietorship business is owned, managed, and financed by an individual owner, thus decisions are made by the owners.(E)

Correct Option:
E

Question 10
A
middle income group  
B
higher income group  
C
lower earning group  
D
people falling between the middle and higher income group  
E
top few richest people in an economy 
Explanation.
The lower earning group usually from the group of final consumers and all burden of tax are shifted on them. (C)

Correct Option:
C

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