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UI Post-UTME Economics 2024 (Model questions) past questions and answers

12 questions. Try each one, then open the answer to check yourself and read the explanation.

Question 1

Money and Inflation

Currency notes and coins are called as:

  1. A.flat money
  2. B.legal tenders
  3. C.Fiat money
  4. D.None of the above
Show the answer and explanation

Answer: B (legal tenders)

Explanation

Notes and coins are legal tender: the law says they must be accepted in payment of debts.

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Question 2

Money and Inflation

Legal money is called so because..........

  1. A.The buyer must pay in that money
  2. B.Can be converted into gold
  3. C.Sellers do not accept any other money
  4. D.It is the official medium of exchange
Show the answer and explanation

Answer: D (It is the official medium of exchange)

Explanation

Legal money is backed by law as the official medium of exchange in the country.

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Question 3

Money and Inflation

The most important feature of money is........

  1. A.General acceptability
  2. B.Convertibility into gold
  3. C.Store of value
  4. D.Medium of exchange
Show the answer and explanation

Answer: A (General acceptability)

Explanation

Anything can serve as money only if people generally accept it in exchange; that is its key quality.

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Question 4

Money and Inflation

Which property the paper money does not possess:

  1. A.acceptability
  2. B.Divisibility
  3. C.Durability
  4. D.Portability
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Answer: C (Durability)

Explanation

Paper money tears, wears and burns easily, so it is not very durable, though it is accepted, divisible and portable.

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Question 5

Money and Inflation

In the equation MV = PY, V represents

  1. A.Value of money
  2. B.Velocity of circulation of money
  3. C.Variation of national income
  4. D.All of the above
Show the answer and explanation

Answer: B (Velocity of circulation of money)

Explanation

In the quantity theory MV = PY, V is the velocity of circulation: how many times each unit of money is spent in a period.

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Question 6

Money and Inflation

In the equation MV = PY, M represents

  1. A.Money supply
  2. B.Money demand
  3. C.Maximum output
  4. D.Minimum output
Show the answer and explanation

Answer: A (Money supply)

Explanation

M is the quantity of money in circulation, the money supply.

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Question 7

Money and Inflation

According to Keynes, motives for holding money are

  1. A.Two
  2. B.Three
  3. C.Four
  4. D.Five
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Answer: B (Three)

Explanation

Keynes gave three motives: transactions, precautionary and speculative.

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Question 8

Money and Inflation

The number of times a unit of money exchanges hands during a unit period of time is known as

  1. A.Velocity of the circulation of money
  2. B.Speed of circulation of money
  3. C.Momentum of circulation of money
  4. D.Count of circulation of money
Show the answer and explanation

Answer: A (Velocity of the circulation of money)

Explanation

This is called the velocity of circulation of money.

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Question 9

Money and Inflation

Equation of exchange is associated with

  1. A.Pigou
  2. B.J.B. Say
  3. C.Marshall
  4. D.Irving Fisher
Show the answer and explanation

Answer: D (Irving Fisher)

Explanation

Irving Fisher stated the equation of exchange, MV = PT.

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Question 10

Money and Inflation

Who stated, "Bad money drives good money out of circulation, when both of them are full legal tender"?

  1. A.Irving Fisher
  2. B.Milton Friedman
  3. C.J.M. Keynes
  4. D.Thomas Gresham
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Answer: D (Thomas Gresham)

Explanation

This is Gresham's Law, named after Sir Thomas Gresham.

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Question 14

Tools of Economic Analysis

Half of the difference between upper and lower quartiles is called:

  1. A.Interquartile range
  2. B.Quartile deviation
  3. C.Mean deviation
  4. D.Standard deviation
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Answer: B (Quartile deviation)

Explanation

Quartile deviation (semi-interquartile range) = (Q3 − Q1)/2.

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Question 15

Tools of Economic Analysis

If there are ten values each equal to 10, then standard deviation of these values is:

  1. A.100
  2. B.20
  3. C.10
  4. D.0
Show the answer and explanation

Answer: D (0)

Explanation

All the values equal the mean, so there is no spread and the standard deviation is 0.

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