Explanation

Inflation can be defined as a persistent rise in the general price level of goods and services. This occurs when the volume of purchasing is permanently running ahead of production and too much money is chasing too few goods.

Various governments in Nigeria have attempted to combat inflation through the following ways:

(i) It is argued that inflation is caused by increased money supply and the government have been reducing the supply of money using the instruments of open market operation, cash-deposit ratio, moral persuasion etc.

(ii) The government has introduced some fiscal measures to reduce inflation. Fiscal measures can be implemented by means of increased taxation and reduction in government expenditure.

(iii) Industrialization will reduce over reliance on imported goods and bring about increase in output which will reduce prices.

(iv) Reduction in aggregate money supply can be achieved through a reduction in government spending.

(v) The activities of hoarders should be checked to prevent increase in prices of goods.

(vi) The use of effective price control system through the establishment of Price Control Board

Correct Answer: B. all factors become variable

Explanation

The long run is a period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all costs

Explanation

The following are the functions of IMF:

(i) To promote international monetary cooperation.

(ii) To promote stability in exchange arrangements among members and to avoid competitive exchange rate or depreciation

(iii)To provide financial aid to member nations experiencing balance of payments difficulties on a temporary basis

(iv) It gives financial aid to members having balance of payments difficulties.

(v) The I.M.F. establishes and maintains stable exchange rates between member countries.

(vii) To help developing nations pay their trading partners in foreign currency.

Correct Answer: D. rising

Explanation

The objectives of price control (minimum and maximum) are:

(i) to prevent exploitation of consumers by producers.

(ii) to avoid or control inflation.

(iii) to help low income earners, e.g. minimum wage.

(iv) to control the profits of companies (especially monopolies).

(v) to prevent fluctuation in income of some producers, e.g. agricultural producers

(vi) to stabilize the income of some producers, e.g. farmers.

Correct Answer: C. expectation of future price increase

Correct Answer: D. 35,250,000

Correct Answer: D. a perfect market

Explanation

(i) Foreign trade involves the exchange of goods and services across international frontiers while internal trade involves the exchange of goods within the borders/boundary of a country.

(ii) In foreign trade, buyers and sellers use different currencies whereas buyers and sellers in home trade use the same type of currency.

(iii). There's possibility of restriction

— tariffs, import duties, export duties, quotas, embargoes

— when goods cross national boundaries while this does not occur in home trade.

(iv) There are differences in systems of weighing and measuring in one country vis-à-vis the other. A country has only one system of such weighing and measuring.

(v) Differences in transport cost due to distance between buyer and seller, documentation requirement, need for insurance all in foreign trade distinguish foreign trade from home trade.

(vi) There are differences in legal systems and culture under international trade but the legal systems are the same in domestic trade.

(vii) Foreign trade requires languages while in domestic trade a common language is used. •

Correct Answer: B. greater supply labour