Correct Answer: C. good government planning

Explanation

Good planning by the government helps to reduce unemployment.

Correct Answer: A. localization of industries

Correct Answer: A. expect balance of payments surplus

Correct Answer: C. Persistent increase in prices

Correct Answer: D. land

Explanation

Land is defined in economics as a free gift of nature. Land does not only include the land surface of the earth but all other free gifts of nature or natural resources like forests, mineral resources, rivers, oceans, atmosphere, etc. unlike other factors of production, the supply of land is limited. In other words, land is a fixed factor of production, it is inelastic. An inelastic product is defined as one where a change in price does not significantly impact demand for that product. This is because landowners can't shift land to a different market or reduce production. If the land is not on the market for development, it has no value. This means that in order for a good to be elastic, the production or use must change.

Explanation

(a) Money is anything that is generally acceptable in a given community as a means of payment for goods and services and for the settlement of debts.

(b) The three motives for holding money are:

(i) Transactions motive: a certain amount is kept in hand for daily requirements such as for food, transport, etc.

(ii) Precautionary motive: Consumers sometimes hold cash in reserve in case an unexpected payment has to be made e.g. medical expenses.

(iii)Speculative motive: Holding money to take advantage of investment opportunities in securities e.g. bonds and shares.

(c) Determinants of the motives are:

Transactions motive:

(i) size of income

(ii) interval between wage payments.

(iii) availability of credit.

(iv) family size.

(v) the rate of interest.

(vi) the status/life style.

(vii) the general price level.

Precautionary motive:

(i) size of income

(ii) interval between wage payments.

(iii) availability of credit.

(iv) family size.

(v) the rate of interest.

(vii) perception of risk.

(vii) availability of social insurance.

Speculative motive:

(i) the rate of interest

(ii) the degree of risk aversion

(a) Money is anything that is generally acceptable in a given community as a means of payment for goods and services and for the settlement of debts.

(b) The three motives for holding money are:

(i) Transactions motive: a certain amount is kept in hand for daily requirements such as for food, transport, etc.

(ii) Precautionary motive: Consumers sometimes hold cash in reserve in case an unexpected payment has to be made e.g. medical expenses.

(iii)Speculative motive: Holding money to take advantage of investment opportunities in securities e.g. bonds and shares.

(c) Determinants of the motives are:

Transactions motive:

(i) size of income

(ii) interval between wage payments.

(iii) availability of credit.

(iv) family size.

(v) the rate of interest.

(vi) the status/life style.

(vii) the general price level.

Precautionary motive:

(i) size of income

(ii) interval between wage payments.

(iii) availability of credit.

(iv) family size.

(v) the rate of interest.

(vii) perception of risk.

(vii) availability of social insurance.

Speculative motive:

(i) the rate of interest

(ii) the degree of risk aversion

Correct Answer: B. consumer who maximizes satisfaction

Explanation

(a)(i) Commodity money is an item or commodity that is generally acceptable as medium of exchange. Such items must have both money value and intrinsic value. Commodities such as gold, silver and beads served as commodity money.

(ii) token money is a monetary medium that has higher face value than the value of the materials from which it is minted.

(iii) Fiduciary issue: This is described as that part of note issue that is not backed by gold.

(iv) Quasi money. This is also known as near money and can be described as money assets that serves temporarily as money and are convertible into money in a short time without loss of value, e.g. drafts, bonds, treasury bills, cheques and promissory notes.

(b) Functions of money are:

(i) Money serves as a medium of exchange. It serves as a means of payment for goods and services.

(ii) It serves as a unit in terms of which the value of all of goods and services is measured and expressed

(iii) Money serves as a store of value.

(iv) Money serves as a standard for deferred payment.

Correct Answer: B. N0.40

Explanation

Consumer Surplus is the difference between the price that consumers pay and the price that they are willing to pay. consumer surplus = 120 - 80 = 40

Correct Answer: D. factors of production are moving outward