Economics 2022 Jamb Examination

This type of unemployment arises when workers voluntarily leave their jobs to seek better opportunities or when they are temporarily between jobs.
It is a normal occurrence in a dynamic economy and often results from job search time, relocation or transitioning between roles.
Such short-term unemployment is described as frictional unemployment.

Marketing boards are established to protect farmers from price fluctuations in agricultural markets.
They regulate buying and selling conditions to ensure farmers receive stable and fair income levels.
This stabilisation role is their primary purpose, even though they may also offer other support services.

A point inside a Production Possibility Curve (PPC) shows that the economy is operating below its productive capacity.
This means resources such as labour or capital are not fully engaged in production.
Such underutilisation results in idle or inefficiently used resources, which is why the point lies within the curve rather than on it.

Transfer payments are government payments made without receiving any goods or services in return.
They are meant to support individuals, such as pensions, social benefits or unemployment allowances.
Unemployment allowances fit this description as they are unearned income given for welfare purposes.

When GNP is reduced by depreciation (the provision for wear and tear of capital assets), the resulting value reflects the net output available to the economy.
This adjusted figure is known as Net National Product (NNP).
It represents the actual value of goods and services produced after accounting for asset depreciation.

Value addition occurs when raw materials are transformed into finished or semi-finished goods.
The processing industry performs this role by converting primary products into forms with greater utility.
This makes it more effective in adding value compared to activities like mining or services.

If national income rises but population grows faster, the income per person may decline.
This mismatch increases the burden on available resources, leading to overpopulation effects such as poverty and resource strain.
Thus, population pressure may worsen living standards even when national income rises.

Commodity money refers to items that have intrinsic value and can be used directly as money.
Precious metals such as gold and silver fit this definition because they have inherent worth and were historically used as medium of exchange.
Modern financial instruments like cheques or mobile money do not possess intrinsic value.

When people expect prices to rise in the future, they tend to make purchases earlier to avoid higher costs later.
This behaviour increases current spending, reducing the value lost from holding money as its purchasing power falls.
Thus, anticipation of inflation encourages higher immediate spending.

The bank rate is the rate at which the Central Bank lends to commercial banks.
An increase in this rate makes borrowing more costly for banks, leading them to raise their own lending rates.
Higher interest rates discourage borrowing by customers, thereby reducing the overall supply of money in the economy.