Post Utme Economics Past Questions and Answers

Question 406:

Reserve requirements are imposed on commercial banks to ____________

A. Control demand deposit expansion
B. Regulate commercial bank’s profit
C. Discourage the use of demand deposits as a medium of exchange

Question 407:

How does monetary policy affect economic activity?

A. An expansion of money raises the rate of interest; increase investment spending
B. Expansion of money supply lowers the rate of interest, increase investment spending and brings about a multiple increase in the level of income
C. An expansion of money supply lowers the rate of interest, increases investment and consumption spending
D. Brings about a multiple increase in the level of income

Question 408:

Economic bottle-necks ____________

A. Cause the cost of specific recourses to increase
B. Cause the cost of specific resources to decrease
C. Prevent the economy from reaching full employment.

Question 409:

In a perfectly competitive market, the long-run profit maximization condition is ____________

A. MR=Mc
B. LMC=MR
C. LMC=P=AR=MR=LAC

Question 410:

Stagflation is a situation where ____________

A. Inflation is stagnated
B. Inflation and unemployment are rising
C. Only inflation is rising.