Correct Answer: A. an increase in the rate of productivity

Explanation

Real wage growth is largely due to increased in economic activity creating competition between businesses to attract and retain workers. The higher the rate of economic activities (production, buying and selling) in the economy, the higher the real wage growth.

Correct Answer: A. the price elasticity of demand is less than one

Correct Answer: D. wants

Correct Answer: A. the price of the goods

Explanation

Luxury goods are products that are not essential but are highly desired and associated with wealthy or rich people. Most luxury goods are bought because of the high price associated with it and to support self-worth and status.

Correct Answer: A. large firms

Explanation

(a) What is economies of scale? Economics of scale refer to the benefits a firm derives as a result of expanding its productive capacity or the concentration of firms of an industry in an area which lead to an increase in output and a fall in production cost per unit of output.

(b) Outline three internal economies of scale a firm can enjoy:

(i) Financial: Large businesses are better able to raise funds from other sources by selling shares or borrowing from banks and can negotiate for lower interest rales on loans.

(ii) Technical: A firm that is large can apply mechanized/modern technology to increase its output.

(iii) Marketing: Large firms can buy raw materials in bulk at good discounts. afford to advertise often, can package their goods better and reduce transport costs considerably.

(iv) Risk- bearing: Large firms can deal with the risks of trading by diversifying their products and market base lo international markets as Well.

(v) Research: Large firms can carry out research into new areas to improve production by Employing experts and setting up laboratories.

(vi) Administrative/Managerial: Because of its sound financial base. a large firm can employ competent manage to oversee the affairs of the company.

(vii)Welfare: Large firms can motivate their staff with better accommodation. scholarship for children, opportunities for training. etc.

(c) State three factors that can influence where a firm is sited:

(i) Availability and cost of raw materials/availability of natural Resources e.g gold. diamond. etc.

(ii) Access lo the source of power/regular power supply

(iii) Proximity to the market( due to fragility, perishability or bulkiness of the final product).

(iv) Access to specialized transport e.g rail services, etc

(v) Availability of labour (skilled and unskilled)

(vii) Government policy/political influence affect location of firms in specific places.

(vii) Climatic factors/conditions.

Correct Answer: C. farmers find it difficult getting help from financial institutions

Correct Answer: D. selling securities in the open market

Explanation

One of the ways through which inflation can be controlled is through open market operation. This involves the buying or selling of government securities. When there is excess money in circulation leading to inflation, the federal government, through the central bank, sells securities to the public to mop out the excess money in circulation. That is, the government invites the public to invest in its treasury bills, government bonds.

Correct Answer: D. below the equilibrium price

Explanation

The government can reduce the cost of accommodation by fixing the rent at a maximum price. Maximum prices occur when a government sets a legal limit on the price of a good or service – with the aim of reducing prices below the market equilibrium price. Governments try to control the rate charged for rent by keeping the cost of renting below a certain level. However, setting the price below equilibrium maximum will cause a shortage – demand will be greater than supply.

Correct Answer: D) imports lead to a decrease in spending on locally produced goods and services

Explanation

This Economics question is asking which of the following statements is true. The options are Option A, B, C, and D. Option A states that disposable income is the only variable that determines consumption. However, this statement is not entirely true as there are other factors that can influence consumption such as interest rates, inflation, and consumer confidence.

Option B states that investment spending is positively related to the rate of interest. This statement is true as higher interest rates can make borrowing money more expensive, which can discourage businesses from investing. Conversely, lower interest rates can encourage businesses to invest more by making borrowing cheaper.

Option C states that imports lead to a decrease in the level of exports. This statement is not always true as imports and exports can be influenced by many factors such as currency exchange rates, tariffs, and trade agreements.

Option D, which is the correct answer, states that imports lead to a decrease in spending on locally produced goods and services. This statement is true as when consumers purchase imported goods and services, they are likely to spend less on locally produced goods and services. This can negatively impact the local economy and businesses that rely on local consumers.

In summary, the correct option in this Economics question is Option D, which is that imports lead to a decrease in spending on locally produced goods and services. It is important to understand the different factors that influence consumption, investment spending, imports, and exports in order to make informed economic decisions.