As stated earlier in our previous post, we are dedicated to make JAMB examinations easy for our readers and subscribers.
For today, are you preparing for the Commerce part of the Unified Tertiary and Matriculation Examinations then you have to study these Most repeated multiple-choice past questions for Commerce exam along with their answers and explanations:
1. What does GDP stand for?
a) Gross Domestic Product
b) Gross Domestic Profit
c) Global Domestic Product
d) Gross Developmental Product
Answer: a) Gross Domestic Product
Explanation: GDP measures the total value of all goods and services produced within a country’s borders in a specific time period.
2. Which of the following is not a type of economic system?
a) Capitalism
b) Socialism
c) Communism
d) Democracy
Answer: d) Democracy
Explanation: Democracy refers to a political system, whereas the other options refer to economic systems.
3. What is the main function of the Central Bank in a country?
a) To regulate the stock market
b) To control fiscal policy
c) To issue currency and regulate monetary policy
d) To manage foreign trade
Answer: c) To issue currency and regulate monetary policy
Explanation: The Central Bank is responsible for controlling the money supply, interest rates, and monetary policy in a country.
4. Which of the following is not a factor of production?
a) Land
b) Labor
c) Capital
d) Profit
Answer: d) Profit
Explanation: Profit is an outcome of production, not a factor of production itself.
5. What does ROI stand for in business?
a) Return on Investment
b) Return of Income
c) Rate of Interest
d) Revenue of Interest
Answer: a) Return on Investment
Explanation: ROI measures the profitability of an investment relative to its cost.
6. Which of the following is a characteristic of monopolistic competition?
A) Many sellers, differentiated products
b) One seller, unique product
c) Few sellers, identical products
d) Many sellers, identical products
Answer: a) Many sellers, differentiated products
Explanation: Monopolistic competition involves many firms selling similar but not identical products.
7. What is the primary purpose of a balance sheet?
a) To show revenues and expenses over a period
b) To show the financial position of a company at a specific point in time
c) To track cash flow in and out of a business
d) To project future earnings of a company
Answer: b) To show the financial position of a company at a specific point in time
Explanation: A balance sheet lists a company’s assets, liabilities, and shareholders’ equity at a given moment.
8. Which of the following is a characteristic of perfect competition?
a) Many sellers, differentiated products
b) One seller, unique product
c) Few sellers, identical products
d) Many sellers, identical products
Answer: d) Many sellers, identical products
Explanation: Perfect competition involves many firms selling identical products.
9. What does SWOT analysis stand for?
a) Strengths, Weaknesses, Opportunities, Threats
b) Sales, Wages, Operations, Taxes
c) Supply, Workforce, Organization, Technology
d) Strategy, Workload, Objectives, Tactics
Answer: a) Strengths, Weaknesses, Opportunities, Threats
Explanation: SWOT analysis is a strategic planning tool used to identify a company’s internal strengths and weaknesses, as well as external opportunities and threats.
9. What is the formula for calculating net profit?
a) Total Revenue – Total Expenses
b) Total Revenue – Cost of Goods Sold
c) Total Revenue – Taxes
d) Total Revenue – Interest
Answer: a) Total Revenue – Total Expenses
Explanation: Net profit is the total revenue minus total expenses.
10. What does the term “Supply and Demand” refer to in economics?
a) The relationship between the price of a product and the quantity demanded by consumers
b) The relationship between the quantity supplied by producers and the price of a product
c) The relationship between the government and the market
d) The relationship between imports and exports
Answer: b) The relationship between the quantity supplied by producers and the price of a product
Explanation: Supply and demand is an economic model that explains the interaction between the availability of a product and the desire of consumers to buy it.
11. What is the purpose of a profit and loss statement?
a) To show the financial position of a company at a specific point in time
b) To track cash flow in and out of a business
c) To project future earnings of a company
d) To show revenues and expenses over a period
Answer: d) To show revenues and expenses over a period
Explanation: A profit and loss statement (or income statement) shows a company’s revenues, expenses, and profits or losses over a specified period.
12. Which of the following is an example of a regressive tax?
a) Sales tax
b) Property tax
c) Income tax
d) Corporate tax
Answer: a) Sales tax
Explanation: A regressive tax takes a larger percentage of income from low-income earners than from high-income earners, and sales tax is often considered regressive.
13. What is the formula for calculating price elasticity of demand?
a) Percentage change in quantity demanded / Percentage change in price
b) Percentage change in price / Percentage change in quantity demanded
c) Change in quantity demanded / Change in price
d) Change in price / Change in quantity demanded
Answer: a) Percentage change in quantity demanded / Percentage change in price
Explanation: Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.
14. Which of the following is a characteristic of a command economy?
a) Private ownership of businesses
b) Government control of production and distribution
c) Competition among producers
d) Market-driven prices
Answer: b) Government control of production and distribution
Explanation: In a command economy, the government makes all decisions regarding production, distribution, and resource allocation.
16. What is the purpose of a budget?
a) To show the financial position of a company at a specific point in time
b) To track cash flow in and out of a business
c) To project future earnings of a company
d) To plan and control spending
Answer: d) To plan and control spending
Explanation: A budget is a financial plan that outlines expected income and expenses over a specific period, helping to guide spending decisions.
17. Which of the following is an example of an intangible asset?
a) Machinery
b) Land
c) Patents
d) Inventory
Answer: c) Patents
Explanation: Intangible assets are non-physical assets with value, such as patents, trademarks, and copyrights.
18. What is the role of an entrepreneur in the economy?
a) To consume goods and services
b) To provide labor for production
c) To innovate and take risks by starting new businesses
d) To regulate markets and ensure fairness
Answer: c) To innovate and take risks by starting new businesses
Explanation: Entrepreneurs play a vital role in the economy by identifying opportunities, creating new products or services, and bearing the risks associated with starting and managing businesses.
19. What does the term “liquidity” refer to in finance?
a) The ability to convert assets into cash quickly without significant loss of value
b) The amount of debt a company has relative to its equity
c) The difference between a company’s assets and liabilities
d) The measure of a company’s profitability
Answer: a) The ability to convert assets into cash quickly without significant loss of value
Explanation: Liquidity refers to the ease with which an asset can be converted into cash without affecting its market price.
20. What is the purpose of a cash flow statement?
a) To show the financial position of a company at a specific point in time
b) To track cash flow in and out of a business
c) To project future earnings of a company
d) To show revenues and expenses over a period
Answer: b) To track cash flow in and out of a business
Explanation: A cash flow statement provides information about the cash generated and used by a company during a specific period, including operating, investing, and financing activities.
21. What is the purpose of a SWOT analysis in business?
a) To identify a company’s internal strengths and weaknesses
b) To analyze market trends and consumer behavior
c) To determine the optimal pricing strategy for a product
d) To forecast future demand for a company’s products
Answer: a) To identify a company’s internal strengths and weaknesses
Explanation: SWOT analysis is a strategic planning tool used to assess a company’s internal strengths and weaknesses, as well as external opportunities and threats.
22. What does the term “asset turnover ratio” measure?
a) The efficiency of a company in generating sales from its assets
b) The profitability of a company’s investments
c) The level of debt a company has relative to its equity
d) The ability of a company to cover its short-term liabilities with its current assets
Answer: a) The efficiency of a company in generating sales from its assets
Explanation: The asset turnover ratio measures how efficiently a company is using its assets to generate revenue.
23. Which of the following is a characteristic of oligopoly?
a) Many sellers, differentiated products
b) One seller, unique product
c) Few sellers, identical products
d) Many sellers, identical products
Answer: c) Few sellers, identical products
Explanation: Oligopoly is a market structure characterized by a small number of large firms selling similar or identical products.
24. What does the term “opportunity cost” refer to?
a) The cost of an economic transaction
b) The cost of production
c) The value of the next best alternative that must be forgone
d) The cost of raw materials
Answer: c) The value of the next best alternative that must be forgone
Explanation: Opportunity cost is the value of the next best alternative that is sacrificed when a decision is made.
25. Which of the following is a function of commercial banks?
a) Setting monetary policy
b) Regulating financial markets
c) Providing loans and accepting deposits
d) Issuing currency
Answer: c) Providing loans and accepting deposits
Explanation: Commercial banks offer various financial services, including lending money to individuals and businesses and accepting deposits.
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