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NECO SSCE Economics 2008 past questions and answers

This 2008 NECO SSCE Economics set has 40 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2008 set with instant marking.

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Sample NECO SSCE Economics 2008 questions

1. An economy records consumption of 120 billion naira, investment of 50 billion naira, government spending of 30 billion naira, exports of 40 billion naira and imports of 10 billion naira; what is its GDP by the expenditure approach?
  1. 230 billion naira
  2. 250 billion naira
  3. 210 billion naira
  4. 190 billion naira

Answer: A. 230 billion naira

GDP is C + I + G + (X - M), so 120 + 50 + 30 + (40 - 10) = 230 billion naira.

2. If nominal GDP is 600 billion naira and real GDP is 500 billion naira, what is the GDP deflator?
  1. 83.3
  2. 120
  3. 100
  4. 110

Answer: B. 120

The GDP deflator is (nominal GDP / real GDP) x 100, which equals 120.

3. A household keeps part of its income as cash to meet future unexpected expenses; which function of money is illustrated?
  1. Unit of account
  2. Medium of exchange
  3. Store of value
  4. Standard of deferred payment

Answer: C. Store of value

Holding money for future use illustrates its function as a store of value.

4. If a central bank lowers the cash reserve ratio required of commercial banks, what is the most likely immediate effect?
  1. Banks must hold more deposits as reserves
  2. The money supply must fall
  3. Commercial banks stop accepting deposits
  4. Banks have more funds available for lending

Answer: D. Banks have more funds available for lending

A lower reserve ratio leaves commercial banks with a larger share of deposits available to lend.

5. To reduce excess liquidity in the banking system, which open-market operation should a central bank undertake?
  1. Sell government securities to the public
  2. Buy government securities from the public
  3. Lower the bank rate
  4. Reduce the cash reserve ratio

Answer: A. Sell government securities to the public

Selling securities withdraws payment funds from buyers and reduces liquidity in the banking system.

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