CAMEROON GENERAL CERTIFICATE OF EDUCATION BOARDGeneral Certificate of Education Examination

0525 ECONOMICS I

JUNE 2018 ORDINARY LEVELCentre Number

Centre Name

Candidate Identification Number

Candidate Name

Mobile phones arc NOT allowed in the examination room

MULTIPLE CHOICE QUESTION PAPER

One and a half hours

INSTRUCTIONS TO CANDIDATESRead thefollowing instructions carefully before you start answering the questions in this paper. Make sureyou have asoft IIB pencil anil an eraserfor this examination.

usr A SOFT MB PENCIL IIIKOUGIIOIJI TUB EXAMINATION.DO NOT OPEN THIS BOOKLET UNTIL YOU ARE TOLD TO DO SO.

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Before the examination begins:Check that this question booklet is headed “Ordinary Le\ cl - 0525 Economics 1”Fill in the informa!ion required in the spaces above.Fill in the information required in the spaces provided on the answer sheet using your MB pencil:Candidate Name, Exam Session, Subject code and Candidate Identification Number,l ake care that you do not crease or fold the answer sheet or make any marks on it other than those askedfor in these instructions.

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How to answer the questions in this examinationAnswer ALL the 50 questions in this Examination. All questions carry equal marks.Calculators are allowed.

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Each question has FOUR suggested answers: A, B, C and D. Decide on which answer is correct. Find the numberof the question on the Answer Sheet and draw a horizontal line across the letter to join the square brackets for theanswer you have chosen.

For example, if C is your correct answer,mark C as shown below:

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[A] [B] ft [D]

Mark only one answer for each question. If you mark more than one answer, you will score a zero for that question.If you change your mind about an answer, erase the first mark carefully, then mark your new answer.Avoid spending too much time on any one question. If you find a question difficult,move on to the next question.You can come back to this question later.

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Do all rough work in this booklet using the blank spaces in the question booklet.At the end of the examination, the invigilator shall collect first the answer sheet and then the questionbooklet. DO NOT ATTEMPT TO LEAVE THE EXAMINATION HALL WITH IT.

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In order to raise more revenue, governmentshould impose high taxes on goods with:

A Fairly elastic demandB Unit elastic demand

-*£ Perfectly elastic demandD Fairly inelastic demand

6.A deliberate reduction in the value of acountry's currency in relation to others is called:

DevaluationB Depreciation of currencyC Appreciation of currencyD Revaluation

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The price paid for labour services is known as:A Time rate

-B Wage rateC Piece rateD Bonus rate

7.One factor that will cause the demand curve toshift to the right is:

A A fall in population

Increase in the price of factors ofproductionA fall in the price of substitutes

^ D Successful advertisement

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B

8. Which of the following factors will increase the sizeof the national income of a country?

A Improvement in living standardsB Increase in national outputC Increase use of natural resourcesD Increase in government revenue

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In a given year, a country had a population of10,000 people in January and during the year 300people came in and 200 people went out. What isthe net migration?

A 9,900 peopleVB 100 people‘ C 500 people

D 10,100 people

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To reduce the amount of money in circulation,governinent should:

A Make use of fundingB Reduce special depositsC Reduce the cash ratioD Sell securities in the open market

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A household allocates the following amounts forits liquidity preference:Transactions motive = 120,000 FCFASpeculative motivePrecautionary motive = 50, 000 FCFA

4.10. A debenture holder is one who has:

A lent money to the companyB a right to dividends from the companyC borrowed money from the companyD bought shares in the company

30,000 FCFA

What is the active balance of this household?A 120,000 FCFAB 150,000FCFAC 170,000 FCFAD 200,000 FCFA

When the government desires to control inflationin an economy, what type of budget would sheadopt?

A Balanced BudgetB Surplus BudgetC Deficit Budget sD Programmed Budget

5. Study the table below and answer this question.

43210Output

(Kg) 1 2 . Production is considered complete only when:A The goods arrive the market.B Factors of production are completely

combined to produce goods and servicesC The finished product is realized in the

factoryGoods reach the final

16001200900500300Total

Cost(FCFA)

The average fixed cost when output is 3 units is:consumers

A 100 FCFAB 200 FCFAC 300 FCFAD 400 FCFA

13. Which of the following is an objective of thegovernment?

A Impose taxes and subsidiesPrice stability and full employmentApply open market operations

D Raise revenue

B

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14. A disequilibrium in the Balance of Paymentsmeans:

A Overall imports exceed expons in theBalance of PaymentsOverall capital outflows exceed capitalinflows in the Balance of Payments

C Overall Exports exceed imports in theBalance of Payments

D Overall deficit or surplus in Balance ofPayments

19. Which of the following is a characteristic of aperfect market?.

A Heterogeneous commoditiesPreferential treatment

& Homogenous commoditiesD Price fluctuation

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20. Which of the following groups of activities fallunder tertiary production?A Banking .teaching and transportationB Mining, fishing and lumberingC Mining.teaching and tourismD Construction, transformation and

transportation

15. As the price of a commodity rises from1001 CI A to 150 FCFA per unit, quantitysupplied will increase by 25%. What will be theelasticity of supply?A 0.13B 1.5C 0.5D 0.05

21 . This question is based on the table showing theoutputs of Cameroon and China in theproductions of Shoes and Tea.Countrv Shoes(packages) Tea(tons)Cameroon 8 1216. Which of the following is an example of a direct

tax?A • Corporation FaxB Sales TaxC Excise dutiesD Value Added Fax

China 30 10Determine the total output of each product afterspecialization

A 38 packages of shoes and 22 tons of teaB 60 packages of shoes and 24 tons of tea

16 packages of shoes and 20 tons of teaD 76 packages of shoes and 44 tons of teaC

17 . In public corporations, the business losses areborne by:

A Shareholders& TaxpayersC Debenture holdersD Managers

22 . Pav ments made to people for which there is nowork done in the current period is known as:

A Income PaymentsB Bonus PaymentsC Transfer EarningsD Transfer Payments

Study the table and answer the question thatfollows:

18.23. Price and quantity demanded are inversely

related. This statement means that:A As price rises, quantity demanded rises'B As price falls, quantity demanded fallsC As price rises, quantity demanded fallsD As price rises, quantity demanded rises

proportionately

Monetary value(FCFA)

4,000,00010,000,0008,000,0003,000,000

AssetsCoins and notes in tillAdvancesInvestmentsBalances with theCentral Bank

24. Fiscal policy is a government measure to controlthe economy by using:

A Revenue and expenditureB The demand and supply of moneyC The tax base and interest rateD The cash ratio and bank rate

What is sum of the two most liquid assets?A 18,000,000 FCFAB 14,000,000 FCFAC 1 1,000,000 FCFAD 7,000,000 FCFA

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425. The following items relate to the Balance ofPayments of country X.I) Visible exportsII) Visible importsIII) TourismIV) Interest and profitsV) Investments abroadWhich of the above items relate to the capitalaccount?

A I and II onlyB III and IV onlyC IV onlyD V only

The factor of production which is most subjectedto the law of diminishing returns is:A Labour

LandC EntrepreneurD Capital

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26. Study this table showing exports and imports of acountry in a given year.Items Amount (Million FCFA )Visible exports 100Visible imports 75Invisible exports 150

Which function of money has solved the problemof double coincidence of wants?

A Store of valueB Measure of valueC Medium of exchangeD One way payment

31.Invisible imports 200

Calculate the Balance of Trade.A 50 Million FCFAB -25 Million FCFA

25 Million FCFAD -50 Million FCFA

Which of the following trade restrictions can beuse to raise government revenue?

A QuotasB TariffsC Exchange ControlsD Subsidies

32.27. Study the table and answer the question that

follows:Quantity demanded(TV sets)

Total revenue(FCFA)

150.0002 300.000I The location of the plywood industry in

Cameroon is mainly influenced by:A Availability of good transport systemB Availability of power supply(' Availability of adequate workforceD Availability of forest

j_>.450,0004 600,000What will be the revenue per unit of a TV set soldin the market?

A 1,6000,000FCFAB 412.500 FCFAC 600.000FCFAD 150, 000FCFA If an increase in income leads to a reduction in

the demand for a good, then it can be referred toas:Describe the policy in which the government uses

customs duties to control imports?A Fiscal policyB Monetary policyC Incomes policyD Physical policy

28.A A normal goodB A substitute goodC An inferior goodD An ostentatious good

I35. One positive check to population growth asproposed by Maithus is:A FamineB Birth controlC Late marriagesD Family planning

Capital as a factor of production will earn:A Rentsfr InterestC WagesD Profit

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36. One reason for privatizing state owned assets is to:A Reduce unemploymentReduce government expenditureC Reduce competition

D Reduce Balance of Payments deficit•j.

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537. fShtU,dJ *** follow'ng table andthat follows:

Output in units

answer the question 41. This question is based on the diagram below.Total costs in FCFAIlMHR)

TToooTSTOCHT24TOOQ~ '

36,000

0Cost*

D4

What is the average cost when 3 units of outputare produced?A 10.000FCFAB 12.000 FCFAC 6.000FCFAD 8.000FCFA

-BA

^Output38. Study the demand and supph diagramanswer the question that follows:

andIdentify curve D on the graph.

Prlrc - k

A Average Total CostsB Total Variable CostsC Total Fixed CostsD Total Costs

r42. \\ hich of the follow ing is a disadvantage of a direct

tax?w

A It is uncertain in natureB It is a disincentive to hard work

It is regressive in naturel) It is equitable

/C

43. A document which shows the relationshipbetween the company and the general public iscalled:

A Memorandum of AssociationB Articles of AssociationC Certificate of TradingD Certificate of incorporation

(JillSim

What does XY signify?

A ShortageB SurplusC Maximum priceD Minimum price \\ hich of the following factors w ill cause the

supply of a good to be inelastic?A Availability of substitutesB Mobility of factors of productionC High cost of productionD Improved weather conditions

44.

In internal economies of scale the use of largemachines in production is an example of:

A Risk bearing economiesB Technical economiesC Financial economiesD Marketing economies

One characteristTc of a dcvcIoped economy is:A Fow per capita incomeB Low life expectancyC Fow dependency ratioD Low living standards

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45. A furniture manufacturing company merges witha cosmetic producing company. This type ofmerger is described as:A Horizontal integrationB Diversified integrationC Forward vertical integrationD Backward vertical integration

48. This table shows the National Income figures andp(>pulation statistics for 4 countries- W,X, Y and Z .

Population( million)400

National Income(inC 'ountrymillion of US Dollars)200W550I 10000000V350140/

i,46. A rise in the price of raw materials causes a rise in

the general price level. This is a description of:A Creeping inflationB Inflationary spiral

Demand pull inflationD Cost push inflation

Which country has the highest per capita income?A Country XB Country YC Country WD Country ZC

One main characteristic of wealth is:A It can be owned by the rich onlyB It can be owned by businesses onlyC It is limited in supplyD It is made up of consumer goods

49.47. Which ot the following is a reason for conductinga population census?

A lo know the cost of conducting a censusB To reduce the level of illiteracyC To help distribute social amenitiesD To increase government revenue I his demand schedule is for the question below .50.

Price in ICl A Quant it) demanded in tonsI 50020003000

| 4000

500 —40000

200

It the price of the commodity falls from4001 Cl \ to 300FCFA, the elasticity of demandwill be:AB 1.4C 0.5D

STOP

GO HACK AM) CHUCK YOLK VNOKK

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