Econs SS3 Enter your name 1 / 15 6. The "Terms of Trade" is defined as the: A) Difference between the value of exports and imports B) Ratio of the index of export prices to the index of import prices C) Total value of all goods produced within a country D) Quantity of gold held by the central bank 2 / 15 14. The value of a currency in terms of another is called the: A) Interest rate B) Exchange rate C) Inflation rate D) Discount rate 3 / 15 7. A country is said to have a comparative advantage in the production of a commodity when: A) It can produce more of that commodity than any other country B) It can produce that commodity at a lower opportunity cost than another country C) Its currency is stronger than its trading partner's D) It uses the most advanced technology available 4 / 15 3. Economic development differs from economic growth because development involves: A) A simple increase in the total output of goods B) Qualitative changes and improvement in the standard of living C) Focusing only on the industrial sector D) An increase in the population size 5 / 15 8. The "Law of Comparative Advantage" was propounded by: A) Adam Smith B) David Ricardo C) John Maynard Keynes D) Alfred Marshall 6 / 15 2. In a socialist economy, the "Basic Economic Problems" are solved by the A) Central planning authority B) Price mechanism C) Forces of demand and supply D) Individual consumers and firms 7 / 15 5. One of the reasons for the failure of some economic plans in Nigeria is: A) Consistency in government policies B) Political instability and frequent changes in government C) The small size of the population D) Lack of natural resources 8 / 15 9. Which of these is a "visible" item in the Balance of Payments? D) Shipping fees A) Banking services C) Export of crude oil B) Tourism 9 / 15 12. Devaluation of a currency is most likely to improve a country’s trade balance if: A) The demand for exports is price-inelastic B) The demand for exports is price-elastic C) Imports are essential goods with no substitutes D) Other countries also devalue their currencies simultaneously 10 / 15 10. The "Invisible Balance" in the Balance of Payments account includes: A) Trade in agricultural products B) Trade in services like insurance and tourism C) Export of machinery D) Smuggled goods 11 / 15 15. A country experiencing persistent "Balance of Payments" surplus might face: A) Depletion of its foreign reserves B) Pressure for its currency to appreciate C) A high rate of unemployment D) A decrease in the money supply 12 / 15 13. A "Tariff" can be best described as a: A) Limit on the quantity of goods imported B) Tax imposed on imported goods C) Subsidy given to domestic producers D) Total ban on certain imported goods 13 / 15 4. Economic planning is often difficult in developing countries primarily due to: A) Lack of accurate statistical data B) Excessive supply of foreign exchange C) The absence of a central bank D) High levels of literacy 14 / 15 11. A deficit balance of payments can be corrected by: A) Increasing imports of luxury goods B) Reducing export duties C) Increasing government expenditure on infrastructure D) Appreciating the national currency 15 / 15 1. Which of the following is a primary objective of economic planning in developing nations? A) Increasing the consumption of luxury goods B) Reducing the rate of industrialization C) Correcting structural imbalances in the economy D) Encouraging rural-urban migration Your score isThe average score is 49% 0%