Correct Answer: C) Cost-push inflation

Explanation

This Economics question is asking about a specific type of inflation. Inflation is the general increase in the prices of goods and services in an economy over a period of time. The question wants to know what inflation is called when it happens because there is an increase in the payment for factors of production. Factors of production are the resources required to produce goods and services in an economy, such as land, labor, capital, and entrepreneurship.

The correct answer to this question is option C, which is called cost-push inflation. Cost-push inflation occurs when the cost of production, such as wages or raw materials, increases, causing firms to increase their prices to maintain their profit margins. This leads to a general increase in the prices of goods and services in the economy.

It is important to note that there is another type of inflation called demand-pull inflation, which is caused by an increase in demand for goods and services that outstrips the supply. This type of inflation is not the answer to this question.

Understanding inflation and its causes is crucial in economics because it affects the purchasing power of individuals and businesses and can have significant implications for economic growth and stability.

Correct Answer: B. B

Explanation

The factors that limit the size of indigenous firms in West Africa are:

(i) Inadequate capital: There is inadequate capital for planned expansion due to low savings.

(ii) Technical know-how: There is inadequate technical know how and this militates against attempts to expand.

(iii) There is limited entrepreneurial or managerial ability

(iv) Lack of co-operative spirit among entrepreneurs: It is usually difficult for entrepreneurs to combine their resources for expansion due to mistrust.

(v)There is the problem of market limitation due to:

(a) low income which leads to low demand.

(b) external competition as a result of the people preferring foreign goods to locally manufactured ones.

(vi) There is inadequate government support e.g. extension services, technology consultancy, etc.

(vii)The firms also face the problem of poor infrastructural facilities like electricity, good roads, communications, etc.

(viii)Government policy on taxation, subsidies etc also affects the size of the firms.

(ix) The firms also face the problem of inadequate raw materials.

(x) Inadequacy of skilled labour also serves as a factor that limits the size of the firms.

Correct Answer: D. imports and exports

Explanation

(a) An industry is a group of related firms classified according to the type of goods and services produced. It is a group of firms producing similar commodities or offering similar services.

(b)(i) Division of labour is the breaking down of a production process into different stages such that each part is handled by a particular individual, unit or department.

(ii) Economies of scale are the internal and external cost-saving benefits that accrue to a firm as it expands in size.

(c)(i) Marketing economies – Larger firms can buy inputs in bulk and enjoy discount and also employ an efficient and well organized marketing strategy and also afford to advertise more.

(ii) Risk - bearing economies – Larger firms can diversify their products so that they will not suffer unduly if one line of production becomes unprofitable.

(iii) Financial economies – Larger firms can easily access loans from banks and other financial institutions at lower interest rates because they have collateral and are more credit worthy.

(iv) Technical economies – As a firm expands in size, it can afford advanced technology and sophisticated plants and machinery, leading to increased output at a lower unit cost.

(v) Managerial economies – Larger firms can employ well-qualified and competent personnel to supervise various departments.

(vi) Welfare economies –Larger firms can provide better packages for employees to boost their morale e.g. subsidized housing, canteen services etc.

(vii) Research and development economies – Larger firms have the resources to set up their own research departments or units which promote innovation and inventions.

Correct Answer: D. consumers

Correct Answer: D. there is specialization of labour

Explanation

Money is able to function more as a medium of exchange when there is specialization of labour. Specialization of labour, on the other hand, increases the need for money. This is because specialization means that people produce different goods and services, which they then trade with each other. Money is needed to facilitate these trades..

Correct Answer: C. Unitary elastic

Correct Answer: D. Inflationary gap

Explanation

Restrictive monetary policy which is also known as contractionary monetary policy is used to increase interest rate and reduce investment so as to control inflation in an economy.

Correct Answer: D. Mobility