Correct Answer: C. consumer sovereignty exists

Explanation

A market economy is characterized by private ownership, freedom of choice, self-interest, buying and selling platforms, competition, and limited government intervention. There is consumer sovereignty in a market economy in a way that consumers decide what should be produced, while the forces of demand determine at what prices goods and services should be exchanged.

Explanation

(a) 21 - (3 x 0) = 21 - 0 = 21

21 - (3 x 1) = 21 - 3 = 18

21 - (3 x 3) = 21 - 9 = 12

21 - (3 x 4) = 21 - 12 = 9

21 - (3 x 5) = 21 - 15 = 6

21 - (3 x 6) = 21 - 18 = 3

(b)

(c) (i) Price of the commodity.

(ii) Income of consumers.

(iii) Price of other commodities

(iv) Taxation

(v) Population

(vi) Tastes and fashion

(vii) Weather

(viii) Expectation of future rise in prices

(ix) Government policy

(x) Advertisement.

Correct Answer: C. creation of long term

Explanation

Money market can be defined as a market for short term loan. The market consists of institution or individuals who either have money to lend or wish to borrow on a short term basis. The central bank is the sole authority in the banking industry and act as banker to the government and the commercial banks

Correct Answer: D. co-operatives

Correct Answer: C. recieve a fixed interest on sums invested

Correct Answer: D) Both the nominal and real income increase

Explanation

This question is about the effect of a change in salary and average price of certain commodities on nominal income and real income. The question states that the salary of a worker has increased from 50,000 Naira to 80,000 Naira and the average price of certain commodities consumed by the worker has increased from 120 Naira to 160 Naira.

The question requires us to determine the effect of this change on the worker's nominal income and real income. Nominal income is the amount of money a person earns in absolute terms, while real income is the amount of goods and services that can be purchased with that money.

Option A suggests that the nominal income increases but leaves the real income constant. This means that the increase in salary is offset by the increase in the price of commodities, so the worker can buy the same amount of goods and services as before.

Option B suggests that the real income increases, but the nominal income has reduced. This means that the worker's purchasing power has increased as the increase in salary is greater than the increase in commodity prices, but the actual amount of money earned has decreased.

Option C suggests that the nominal income increases, but the real income decreases. This means that the increase in salary is outweighed by the increase in commodity prices, so the worker can buy fewer goods and services than before.

Option D is the correct answer. It suggests that both the nominal and real income increase. This means that the increase in salary is greater than the increase in commodity prices, so the worker can buy more goods and services than before.

In summary, when the salary of a worker increases from 50,000 Naira to 80,000 Naira and the average price of certain commodities consumed by the worker increases from 120 Naira to 160 Naira, the worker's nominal income and real income both increase.

Correct Answer: C) a sustained increase in the overall price level

Explanation

This question is asking about the definition of inflation. Inflation is a term used to describe the increase in prices of goods and services over time. It is measured by the rate of change in the overall price level of a country's economy.

The question provides four options, and you are to choose the option that correctly defines inflation. Option A describes a one-time increase in commodity prices, which is not the same as inflation. Option B describes a period when prices increase rapidly, which is similar to inflation but not the complete definition. Option D describes an increase in the overall level of business activity, which is not related to inflation.

Option C is the correct answer. It defines inflation as a sustained increase in the overall price level. This means that over a period of time, the prices of goods and services in a country's economy continue to rise. Inflation can have both positive and negative effects on an economy, depending on several factors such as the rate of inflation, the causes of inflation, and the actions taken to manage it.

To learn more about inflation, you can study the causes, effects, and management of inflation in macroeconomics.

Correct Answer: C. correct the balance of payments problem

Explanation

(a) The following are some of the causes of demand-pull inflation;

(i) Excessive deficit financing resulting in increased government expenditure

(ii) Excessive bank lending for unproductive activities.

(iii) Increase in wages and salaries of workers not matched by increased productivity.

(iv) War time expenditure on arms and ammunition not accompanied by increase in the supply of goods.

(v) Increase in population which results in increase in demand without a corresponding increase in supply.

(vi) Increase in money supply due to special events e.g. election.

(vii) Excessive printing of currency by the central bank will increase money supply.

(viii) Reduction in personal income tax thereby leading to increased disposable income and demand.

(b) Some of the undesirable effects of inflation include;

(i) There is transfer of real earnings from creditors to debtors. Creditors lose as they are repaid with money that has fallen in value.

(ii) Inflation redistributes income. Fixed income earners such as pensioners and civil servants suffer.

(iii) Adverse balance of payments may occur. Rising prices of exports discourage exportation and may lead to an adverse balance of payments.

(iv) Savings is discouraged leading to low capital formation and investment.

(v) Loss of confidence in money as money loses its value.

(vi) Fall in the standard of living due to a fall in the real earnings of workers.

Correct Answer: C. the board of directors

Explanation

A public liability company is owned by two or more shareholders who own the shares of the company, and run by a board of directors appointed by the shareholders.