Correct Answer: C. limited source of capital

Explanation

Availability of capital for expansion is one of the major issues faced by sole traders. These traders are left to either borrow capital from friends and family or from personal savings to fund their business, as financial institutions tend not to lend sole traders funds due to the unavailability of collateral materials and inability to repay loans.

Explanation

(a) Some problems encountered in a barter economy are:

(i) double coincidence of wants;

(ii) determining the exchange rate among goods;

(iii) barter economy also faced the problem of indivisibility i.e. where one party to the exchange has an indivisible item such as a sheep;

(iv) Some goods to be ex-changed were not easily portable;

(v) there was the problem of saving commodities for future use;

(vi) the problem of borrowing and buying on credit;

(vii) lack of specialization and division of labour.

(b)The introduction of money has solved these problems in the following ways:

(i) as a medium of exchange it breaks transactions into sale and pur-chase thus there is no need for double coincidence of wants;

(ii) as a unit of account it allows rate of exchange to be easily determined;

(iii) modern money has several units and facilitates exchange in small and large units;

(iv) modern money is easily carried about to facilitates easy transactions;

(v) as a store of value, people with surplus goods convert them into money and save until the money is needed;

(vi) money as a standard of deferred payments allows borrowing and buying on credit;

(vii) Money as a store of value and medium of exchange allows specialization and division of labour.

Correct Answer: B. excise duty

Explanation

A tax percentage levied on manufactured, sale, or use of locally produced goods (such as alcoholic drinks or tobacco products).

Correct Answer: A. share revenue between the different tiers of government

Correct Answer: A. open market operations

Correct Answer: D. inflation

Correct Answer: A. the prevailing exchange rate

Explanation

Interest rates are determined, in large part by central banks who actively commit to maintaining a target interest rate. They do this by using the open market operations. To discourage borrowing, interest rates would be set high and set low to encourage lending. Therefore interest rates are determined mainly by the prevailing exchange rate

Correct Answer: A. downward from left to right

Correct Answer: D. price is an incentive to producers

Explanation

A supply curve is positively sloped because as the price of a commodity increase in the market, the amount supplied increases. Producers will be wiling to supply more of their products as prices increase.

Correct Answer: C. industrial input