Economics 2022 Jamb Examination

Development banks are specialised financial institutions that focus on long-term financing for economic development projects such as infrastructure, agriculture and industry.
Because their primary role is developmental, they may not engage in regular commercial banking operations, including frequent dealings in foreign currencies.
Commercial banks, on the other hand, typically participate in a wide range of foreign exchange transactions as part of daily banking operations.

The central economic problem results from the universal condition of scarcity.
Resources such as land, labour and capital are limited, while human wants are unlimited.
Because resources are not available in adequate quantities to satisfy all wants, every society must make choices on allocation, leading to economic problems.

Bank rate adjustments, cash reserve ratio requirements and open market operations are tools used by the monetary authority to regulate the money supply.
These instruments influence interest rates, liquidity and credit availability in the economy.
They therefore fall under monetary policy, not fiscal policy.

Fiscal policy involves decisions about government income and spending.
This includes adjusting tax levels, altering public expenditure and managing budget deficits or surpluses.
Both revenue and expenditure are used together to stabilise or stimulate economic activity.

A production possibility curve (PPC) illustrates scarcity, choice and opportunity cost by showing the maximum output combinations attainable with available resources.
Points inside the curve show inefficiency and unemployment, while points on the curve show full efficiency.
However, the PPC does not emphasise long-term economic development; it focuses on resource allocation at a given time.

A free market economy relies heavily on competition to drive efficiency.
Producers must improve quality, minimise cost and innovate in order to survive against rivals.
This competitive pressure encourages efficient use of resources and better consumer satisfaction.

A pie chart represents proportions using angles out of 360 degrees.
The city covers 45°, so its population ratio is \( \dfrac{45}{360} \).\[ \dfrac{45}{360} = \dfrac{1}{8} \]Multiplying this fraction by the total population gives:\[ \dfrac{1}{8} \times 10 \text{ million} = 1.25 \text{ million} \]Therefore, the city’s population is 1.25 million.

A normal demand curve slopes downward from left to right due to the inverse relationship between price and quantity demanded.
Consumers buy more when prices fall and reduce purchases when prices rise.
This means sellers need to lower prices if they want to increase sales.

Substitute goods are products that can replace one another in consumption.
When the price of one good rises, consumers switch to the cheaper alternative, increasing the demand for the substitute.
This behaviour indicates X and Y are substitutes.

An exceptional demand curve, such as a Giffen or Veblen demand curve, slopes upward instead of downward.
This may occur when consumers expect future prices to rise, causing them to purchase more now even as the current price increases.
Such expectation-driven behaviour leads to an abnormal positive relationship between price and quantity demanded.